Introduction
In the 21st century, an old leadership paradigm is changing. Various global processes have led to the demolition of the industrial economy in which work was primarily mechanical and the onset of new informational, service, and design industries. Due to these shifts, the substantial transformation in the nature of the work process has occurred − businesses need more creative solutions and intellectual investments.
Additionally, while more and more people become involved in work that requires them to be creative and innovative, the change in employee motivation takes place as well. Nowadays, self-realization and professional growth frequently serve as the primary stimuli at the workplace for individuals. All these factors resulted in the reduced efficiency of the classical management and leadership methods which were designed and widely used in the industrial age. An authoritative and task-oriented leadership style is not so effective as it was before and cannot pay off the enormous resource expenses any longer.
In this paper, we will analyse literature devoted to the 21st-century leadership to identify what major competencies should the present-day leaders have to be successful. We will also indicate the difference between the contemporary business conduct models and the classical ones and note what environmental factors have contributed to these differences. Additionally, based on the findings of the literature review, we will provide practical recommendations and explain how the research evidence can be used to improve organisational performance.
Literature Review
Today, many enterprises are faced with extraordinary managerial problems which require the involvement of talented people who have additional competencies beyond the standard business skills. Based on the character of these issues, researchers distinguish six major areas of the new leadership, and each one of them includes a set of practices which are considered to be contributive to the organisational success and efficiency.
Critical Thinking
An effective leader is a professional whose critical thinking skills are well-developed and who can apply them to deal with the increasing environmental uncertainty. Although critical thinking was one of the basic managerial abilities throughout the time, in the present-day situation, it acquires a totally new quality that differs it from the traditional leadership models. According to Brown et al. (2015), the evaluation and assessment abilities of a contemporary leader require him or her to be intuitive.
The researchers suggest that the growing social and technological complexity provokes problems with deep and frequently indefinable roots which need an immediate response “that works at the specific time, place, and context” (Brown et al. 2015, p. 352). It is almost impossible to manage the modern business issues without a share of improvisation, innovation, and, at the same time, consideration of all possible consequences. However, to be able to act intuitively, a profound competence and understanding of details are needed. Leaders thus should strive to gain sufficient experience and learn to look at things at a wide angle.
To enhance critical thinking skills, the leader should be engaged in self-reflection over his or her thoughts, motives, actions, and ideas (Marques 2014). It means that the leader should know how to identify personal biases. For this reason, he or she must always seek new information and knowledge needed to form a holistic perspective on problems, environments, and self; acknowledge personal responsibility and be respectful towards opinions of others (Marques 2014). Self-reflection also implies the ability to regard failures as opportunities for growth and improvement. This skill allows a professional leader to stay productive and bonded with employees and business partners over trustful and beneficial relationships.
Accountability
The second important competency of the 21st-century leadership is accountability. Every leader must take into consideration such behavioural principles as fairness, respect, and the balance between the individual and collective well-being. Mihelic, Lipicnik, and Tekavcic (2010) state that ethical leadership is primarily concerned with the decision-making and its consequences, and implies the adherence to the major norms of responsible behaviour, as well as its enforcement within the organisation. The leaders are regarded as key players in the incorporation of ethical values into the organisational culture.
Moreover, it is possible to say that the efficiency of ethical leadership defines the extent to which subordinates accept the principles of the ethical behaviour at the workplace and comply with them. Mihelic et al. (2010) state that “ethical leaders’ conduct serves as role-modelling behaviour for followers as their behaviour is accepted as appropriate” (p. 33). The researchers also observe that not only should leaders behave appropriately but also actively communicate with employees about the importance of fair behaviour. It is implied that the establishment of sound and positive leader-employee relationships is the primary way to instil ethical values in subordinates.
Multicultural Competence
Effective leadership of the 21st century embraces diversity in all its forms. With the increase of social diversification and growing number of international interactions due to globalisation and other developmental trends, an unprejudiced attitude becomes a must for leaders because multicultural biases may create significant barriers to high-quality performance. Prejudices based on the demographic and other factors interfere with the establishment of professional relationships and increase misunderstanding. Therefore, individuals who want to improve their leadership skills should strive to develop multicultural competence by raising awareness of their own cultural and social biases.
As stated by Canen and Canen (2012), monocultural leaders tend to “let tensions increase; silence cultural diversity; reinforce hegemonic voices; abuse others who think differently; and tend to condone bullying and monocultural behaviors” (p. 201). Such an approach is associated with interpersonal conflict, unfair recruiting practices (e.g., glass walls and glass elevators, etc.), and the overall unsound workplace environment. On the contrary, by developing multicultural competence, the leader becomes able to create an inclusive workplace that fosters a strong team cohesion. Additionally, he or she becomes capable of working with people who differ from him or her including business partners from distant cultural backgrounds.
Innovation
Innovation is the fourth essential domain of the 21st-century leadership. Not only should the leader come up with innovative thoughts but also must create a favourable climate fostering employees’ creativity and realisation of their practical ideas aimed to achieve greater profitability, productivity, and competitive position through renewal, advancement, and renovation. As stated by Kuratko, Hornsby, and Covin (2014), sufficient level of leaders’ support has a direct positive impact on innovative organisational outcomes because they promote internal corporate values and culture that motivates subordinates to be more competitive and helps them to be creative and risk-taking.
It is implied that in order to achieve desirable productive outcomes, leaders should not be focused just on tasks, but rather all their decisions and actions should mainly be oriented towards people who work in the organisation. Thus, to be an innovative leader means, first of all, to stimulate creative thinking in others as well as in oneself.
Communication and Collaboration
People orientation is essential area of the contemporary leadership. Trustful and meaningful relations with employees are important for the leader because without them he or she will not be able to motivate subordinates and increase their commitment to various work activities. To succeed, leaders should develop their communication skills and learn to assess the needs of their personnel and be sensitive to personal interests of others.
“Communication not only constitutes one of the crucial aspects of leadership performance, but leadership can productively be viewed as a communication process” (Brandt & Uusi-Kakkuri 2016, p. 119). The given statement emphasises the importance of communication styles adopted by leaders, and the researchers observe that charismatic and human-oriented leadership is associated with better productive results (Brandt & Uusi-Kakkuri 2016). Such a manner of communication may serve many purposes such as enabling, rewarding, inspiring, challenging, and so on. It is possible to say that not all people may communicate in this way yet, to be able to conduct fruitful communication, leaders should develop appropriate qualities and rhetorical skills. By doing so, individuals will be able to maintain employee interactions at a professional level and add meaning to them.
Integrated and Flexible Approach to Strategic Management
Lastly, an effective leader is competent in strategic and business management. He or she knows how to assess, plan, and achieve goals; organise employees’ activities, and adapt to ever-changing business environment. Researchers emphasise the significance of flexibility and regard it as a core strategic competency associated with the contemporary leadership. As stated by Bedrule-Grigoruta (2012), the modern environment in the market is dynamic and constantly changing and, for this reason, leadership should provide “adaptability and constructive change within the organization” (p. 1029).
Therefore, an excellent leadership strategy always includes methods aimed at the adjustment to these rapid changes. It is possible to say that every effective strategy for change management includes forecasting, evaluation, coordination, and control. However, internal organisational changes that only appear as reactions to external events often lead to failure, while greater opportunities for the success are influenced by a proactive approach. When the leader anticipates and creates changes, in this way, he or she supports the company’s long-term survival in the market.
According to Bennis (2015), the success of any change management endeavour largely depends on the leader’s vision and his or her ability to communicate it. A clear vision determines the company’s commitment to financial goals and long-term survival in the market, its identity and the overall foundation for building competitive advantages, its value adding capabilities and the target population. A clear vision statement is essential to employee engagement and organisational motivation. The vision statement must be challenging yet encouraging and inspiring the collective to grow. To be effective, it also should add some values for employees and highlight the significance of creative and friendly environment at the workplace.
Comparison of the 21st Century Leadership to Traditional Leadership Models
It is possible to say that classical leadership wisdoms are to some extent similar to the modern ones. Throughout a significant time, researchers defined leadership as a strategic approach towards coping with current and future challenges and regarded it as an essential element of business success (Redman 2006). Classical leadership models comprise business strategies and, at the same time, go beyond them by focusing on the detailed analysis of the conditions and information about the dynamics and changes in the environment.
In the turbulent business environment of the 20th century, efficient and visionary leadership helped many companies to attain the necessary knowledge needed to close the gap between current situations and desirable future goals, innovate, and bring changes to the world. Nevertheless, the changes in the social, political, technological, and ecological environment taking place in the 21st century have made leadership evolve. Some of the classical wisdoms became obsolete (e.g., task-oriented management), others became more important (e.g., innovation), and some new have emerged (e.g., accountability and social responsibility).
As stated by Chan et al. (2012) the transformation of the notion of leadership was supported by the transition from industrial economies to the market-driven, service economies abundant with information. Due to shifts in the very meaning and structure of work, non-linear employee operation and career development became more widespread. It means that while in the past, only the members of top management used to perform leadership roles, nowadays, every individual regardless of his or her position can be a leader. This value-driven, person-centered, and self-directed approach to work is defined by the researchers as a boundaryless career (Chan et al. 2012). With the change in the boundaries of leadership and increased focus on the personal qualities of leaders, the need to resolve problems that are “unique, cannot be modelled, are tough to describe, and have no right solution” requires leadership to be more flexible and intuitive (Brown et al. 2015, p. 352).
Potential Applications in the Business Environment
The attainment of business goals and profitability is an important and necessary thing yet the findings of the literature review demonstrate that it is not enough today. The more complicated business problems become, the more serious and critical evaluation they require. Moreover, to be efficient in the present-day environment, people should be emotionally involved in what they do. Thus, an effective leadership must be attentive to multiple organisational aspects and practices.
Research and development of an appropriate leadership strategy are the keys to success. However, when facing financial difficulties, companies usually prioritise other organisational needs and do not pay sufficient attention to the improvement of leadership. However, neglect of this vital area of performance may be detrimental to the company’s sustainability. On the contrary, when the organization implements programs aimed to develop leadership qualities in subordinates, continues to support them even during the crisis, promotes the most talented employees, and allows them to perform leadership roles, it generates opportunities for success and stimulates the organisational growth.
In some way, it is possible to say that the major reason behind any activity in the contemporary leadership is the aspiration for search and development of either individual or collective, organisational identity. Therefore, it can be recommended to start the design of a leadership strategy from the evaluation of the firm’s internal environment in order to determine methods and styles of leading and motivation, collective values and the extent of compliance with them, principles of conflict management and whether employees can stay balanced and sensitive towards each other in the current work climate, existing barriers to growth, and the degree of job satisfaction and self-efficacy.
The answers and information collected through the assessment may be used to create an integrated approach that would unify operational and managerial activities (e.g., development of strategies, task accomplishment, etc.), interpersonal and professional relationships (e.g., strengthening of team cohesion, establishment of meaningful partnerships, etc.), and psychology (e.g., ability to see the company as a whole, be intuitive, and respect individuality). Such a holistic leadership style is characterised by multiple benefits, and the main one is the chance to obtain positive results without excessively relying on external resources, to predict future needs, and increase competitive advantage through innovation.
Conclusion
The modern economy and technology are rapidly evolving and provoke a great number of complex and unprecedented issues. Significant changes in the social realm are taking place as well. People seek meaningful activities and strive to find and develop personal identity. The movement towards social diversification and individualism, as well as other factors, change the face of the contemporary leadership − it is not enough merely to be the smartest, the most educated, energetic, and ambitious.
The modern leadership no longer conforms to the primaeval psychological principles of behaviour: egoism, self-profit, ostentation, and so on. Although the new paradigm does not exclude the importance of profitability, nevertheless, it does not regard it as the primary need. The 21st-century leadership is a holistic, and integrated approach to management, driven by intuition and a clear vision of the future. A successful leader is a person who always aims to realise his or her own potential and, at the same time, stimulates others to do the same.
It is possible to say that the ability to critically evaluate their own performance and acknowledge mistakes is one of the most important qualities of modern leaders. An effective leader will not blame others for failures and rather will regard every point of crisis as an opportunity for the improvement. Along with flexibility, this quality maintains the vivid outlook on things and helps the leader to be persistent in whatever he or she wants to achieve.
The findings of the literature review also indicate that leadership can be regarded as the system of communication which comprises the analysis of expectations, development of empathy and trust, constructive criticism, and conversion of individual multicultural capital into the collective one. It means that a successful leader is emotionally intelligent and human-oriented. He or she supports collaboration and considers the social and cultural backgrounds of the individuals and business partners. Moreover, the leader uses individual peculiarities for the benefit of the company.
Overall, while classical leadership models perceive problems mainly from the external perspective associated with customers, competitors, etc. and sees them as something alien and requiring elimination, the new leadership paradigm sees these barriers as part of one big system. The contemporary leader is placed in the centre of this system and serves as the mediator between the internal organisational state and the external events.
Based on this difference in views, it is possible to assume that internal resistance to change may be regarded as the biggest problem for the 21st-century leadership. When employees are reluctant to conduct in a desirable manner, it is rather pointless to put pressure on them and demand. In this situation, the leader will attempt to understand what personal and other barriers hinder the progress and then undertake measures to eliminate them. When this stage is passed, things start going smoothly. Thus, the task of the leader is to impact the organisational system in a way that balances it. The new approach to management helps to get the maximum result at the lowest cost.
Reference List
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