5. NEEDED: A NEW LEADERSHIP PARADIGM


27 Apr
27Apr

Foundations of Modern Leadership …

The hierarchical management structures of command and control that continue to guide business leadership, and the persistence of its evidence-based thinking, is supported by the dominant positivist scientific paradigm, based on a Newtonian, mechanistic, building-block worldview. Yet, almost a century ago, in science, this paradigm was already being replaced by Einstein’s Theory of Relativity and a quantum worldview of complexity, uncertainty and possibility.

Of course, ‘evidence-based’ not only represents the limits inherent in Skinnerian thinking, especially when applied to Newtonian positivism, but creates enormous risks regarding who, at the top of the corporate ladder, is selecting the evidence on which critical decisions are based.

The 2001 collapse of Enron was topped a year later by Worldcom as the biggest fraud in American corporate history, which combined to badly unsettle the extant hubris within the business and political environments. Both failures have been publicly attributed, not to any intrinsic weakness of the businesses themselves, but to a failure of the personal values of their CEOs. This illustrates the risks inherent in the old military leadership model where such massive concentration of unquestioned power vests in a single individual.

This appears to be an overlooked yet vitally important aspect of leadership.

A new investigation, The Network of Global Corporate Control has revealed that, far from any normally expected diversity and spread of ownership, a small tightly-knit core of just 50 financial institutions controls the entire world’s competition and financial viability, 24 of which are American and each of which is controlled or led by a single Chairman.

UNESCO’s figures on corporate power facts and statistics reports that of the world’s 100 largest economies, only 49 are countries. The remaining 51 are corporations, each directed or ultimately led by a single individual.

Professor Bernard Lietaer, Newsweek’s former ‘World’s Top Currency Trader’ and member of the board of the Club of Rome recently wrote a report to the Club of Rome. He found that IMF figures over the past 40 years show that there have been 425 economic crises (banking, monetary, sovereign debt) that affected 75% of its members. In addition, as much as $32 trillion of personal wealth, more than twice the size of the US GDP, is currently hidden in tax havens and out of circulation, costing countries at least $280 billion annually in lost taxation revenue. In most cases, the trusts that control this wealth are ultimately led by a small group or single individual inevitably with political and business affiliations and the financial muscle to leverage significant power in pursuit of their own agendas and interests.

It is amusing, if not chilling, to recall a prescient scene in Monty Python’s 1983 film, The Meaning of Life, where a small group of business leaders sit around a vast boardroom table asking if there is anything left on earth that they don’t yet own.

In contrast to the top-down militaristic model, the rise of new-era highly networked corporations, such as Facebook, Google and Apple, is underpinned by collaborative founding teams and characterized by unprecedented growth through collaboration, democratization of the business model and an entirely new approach to leadership.

What the new business generation is displaying, not just in flagship companies but in the proliferation of creative design and tech start-ups, is dialogical reasoning, complexity, creativity, integration and higher purpose, which my research indicates are the values identified with postformal reasoning and hence form the basis of a new global, post-Boomer leadership paradigm, which I have called Postformal Leadership.

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