Several years ago when I interviewed Andy Grove, the then CEO of Intel corporations, he said that he would give himself a B+ as a CEO.  Although Intel experienced manifold growth under his leadership, he mused that the true value of a CEO is measured by how well the company functions after his/her tenure was over.  In the process of focusing extensively on the day-to-day operations of Intel, he was not able to devote adequate time to observe future trends.  This was a powerful insight I gleaned from the management guru of the time. Andy was ahead of his time as this kind of thinking was unheard of in the 1990s.

When Henry Ford’s idea of ‘horsepower’ fostered the evolution of transportation from horses to engines, it became the cornerstone of over a century of the Industrial revolution.  Manufacturing was the major movement of the times. There were three key ingredients of success in this field: (i) engaging in long-term research to perfect the product, (ii) making huge investments to own the product, (iii) facilitating mass education to ensure the proper following of instructions. Large upfront investments were primarily made to acquire the best talent: the breed that specialized in the subject and precisely planned the process to ensure the system’s overall efficiency. Secondly, the idea itself was the absolute. This in turn led to the creation of copyright laws, patents and non-competes to safeguard intellectual property.  These provisions created clear rules of ownership, production and transaction. Lastly, the education system churned out a workforce that imbibed the plan and implemented it to perfection. In this scenario, a hierarchical leadership was the chosen method wherein the orders came from the top and the team was to execute with precision.

The first disruption to this scheme came through the knowledge economy where software and social media companies built value based on the reach of the product.  A fine example of this was when companies like Microsoft generated billions of dollars of revenue with fewer employees than those at a manufacturing unit. The manufacturing mindset was similarly disrupted when WhatsApp generated $19B of value with less than 100 employees.  This scenario called for a slight change in the rules of hierarchal leadership.  The leading team now had to continuously evolve in order to change the product line, acquire competitors and assimilate different leadership styles into their company.  The leaders still remained experts in the industry and had enough knowledge to navigate through various disciplines within that segment.

The second disruption came in the form of the realization that no one Idea is the absolute and that no one expert is capable of running a company by themselves. In the future that we are creating, the success of a company depends on an interdisciplinary approach and the nurturing of the ideator. During my stint at Intel, we mused on the radical decision of the leadership in dropping the core memory business and venturing into the microprocessor business.  This one change sustained Intel for decades.

Lastly, there is the need to acknowledge the obsoleteness of the education process currently modelled on the existence of one expert and several listeners. Today, we are entering a creative economy where individuals need to be continuous learners given that disruption could come from any segment.  For instance, the disruption for taxi services came from a technology company where none of the executives had any professional experience with taxis, mechanics or logistics.  Those who are successful today are experts in understanding the consumer’s needs and surrounding themselves with a diverse set of people who can help in meeting them. Take two examples – Airbnb and Uber – both of them are huge disruptors.  Airbnb brought in industry veteran Chip Conley to advise them on the hospitality industry experience.  When I interviewed Chip, he informed me that the initial staff meetings felt strange as he was not acquainted with the field of technology. It was a two-way mentorship system where Chip learnt technology and the team learnt about hospitality. He was the adult supervisor and the founding team functioned as the renegade thinkers. Together, they built a great company.

Leadership was once lonely at the upper rungs because it took on the stoic, paternal style of the industrial revolution. The CEO functioned as the protector who did not want his employees to know of the problems. The leadership needed for the new generation is that of a relationship where successes and failures are discussed, and wealth is shared with the team. Where the leader exhibits openness in being a nurturer and being nurtured; a mentor as well as a learner; a protector as well as the vulnerable one.  There is the need for a new chapter in leadership development where the role morphs into that of a coach, continuous learner and a custodian. There is a shift from a patriarchal pattern of leadership to a matriarchal mode of management where nurture triumphs.  If protecting the idea was the key to success in the past, nurturing the ideator is the essential ingredient of survival itself, let alone the success of an entity in the creative economy.

Views are personal.

The author is founder and CEO of INK.

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