Leadership Crisis in a VUCA World

Does the world suffer from a crisis of leadership? 86% of the 1,767 experts who responded to the recent World Economic Forum Survey on the Global Agenda think so. Should we be surprised by this? While the headline survey result may be shocking, the apparent failure of leadership to deal with the existential challenges faced in today’s world might be behind this perception. Challenges that start with climate change and do not end with global inequality, geopolitical instability, economic and health crises are making the world more volatile, uncertain, complex, and ambiguous (VUCA). These are tough issues for leaders at every level.  

Interestingly though, this lack of faith in leaders is happening just as a global recognition of the importance of leadership is emerging. Schools and universities are making leadership a staple part of their curriculum and educational outcomes, organisations are investing more than ever in leadership development, and the leadership section at the bookstores is growing daily. What is going on?

The crisis of leadership seems to emanate, at least in part,  from the contradictions between what markets currently reward leaders for, and what the world needs. Let us examine three of the dimensions where these contradictions are more profound. First, timescale: while many of the challenges we face require very long term thinking, short-termism is rampant. Leaders can be under pressure to deliver quick results or pay a hefty price. Second, sphere of focus: despite all the rhetoric, many organisations measure results with an internal focus on their individual success rather than the success of the entire ecosystem. This influences the decisions leaders make. Third: competition versus collaboration: while no single individual, organisation, or even country will ever be able to address the biggest challenges of our time such as climate change or inequality alone, in the 21st century we still see nationalism, populism, price wars, and ever outright war happening around us. Leaders are often finding it difficult to balance the fine line between competing, and the need to work together for the common good.  

Clearly, we need a new breed of leaders who are able to deliver the immediate results without sacrificing the long term viability of their organisiations, sectors, and even the world. These leaders need to possess an ecosystem mindset and be capable of finding commonalities and building consensus with competing and disagreeing parties, while driving the agendas and interests of their institutions and communities. 

These leaders will need to master a number of attributes, values, and skills, including a deep sense of purpose, being self-aware, and having the effectiveness and soft skills to be able to deliver a positive impact to their constituencies and the wider world. We call these purpose-driven leaders. Having a clear sense of purpose at the individual and organisational levels can go a long way in empowering leaders to both do well, and do good.

Despite being an innate part of every one of us, purpose needs to be discovered. Mark Twain said that: “the two most important days in your life are the day you were born and the day you know why.” In order to inculcate this type of purpose-driven leadership, we at Heriot-Watt University developed a methodology to help leaders cultivate their own self-awareness, discover their purpose, and design plans to mobilise their purpose into positive impact on the world. The process results in the articulation of what we call an “Impact Statement.” We offer this to all our students, staff, and leaders in private, public and and non profit organisations. 

An example of a purpose-lead organisation is CVS Health which owned thousands of stores and pharmacies all around the United States. At one stage their annual sales from tobacco and related products were c. US$2bn. The company set out to identify and define its purpose, which was to help people live a healthy life. As a result, in 2014 the company decided to cease the sale of cigarettes in its 7000 stores. CEO Larry J. Merlo said at the time, ''Sometimes, we all need to dust off our values and ask ourselves if we're truly living in concert with them.'' While the company gave up a profitable line of business, this purpose-driven business decision enabled it to reshape itself, save on store space, and attract even more customers who were truly aligned with its purpose.

To stand a chance at addressing the challenges of our time, we need to redefine the leadership that we teach, learn and practice, from “leadership” to “purpose-driven leadership.” Transforming our educational systems and how we develop, reward and recognise our leaders will be how we achieve this, and in doing so, we will avert the leadership crisis that so many people think we are facing today.