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(originally published by Booz & Company)


Solid Connections in a Liquid World

Prescriptions for how leadership and commercial relationships can excel in a fluid world.

In 2005, New York Times columnist Thomas Friedman published a book called The World Is Flat, in which he argued that the distinction between developed and emerging market countries is rapidly disappearing. The globalized economy makes moving factories to China, programming to the Philippines, and customer-service centers to India more feasible for companies from higher-cost industrialized nations.

I wouldn’t exactly disagree with his conclusion, but I would modify it a bit, and assert, instead, that the world is liquid. Indeed, today’s world is so fluid and changing that it is more akin to white water and riptides than to a plateau. And if you consider the power of rivers to cut through hard rock — America’s Grand Canyon being a perfect example — liquids are powerful enough to change the course of nature.

But there’s another quality of liquids that I find especially relevant to the challenge of leadership in today’s world: their ability to create solid connections without being rigid. Those of us of a certain generation (or owners of high-performance sports cars) can relate to the differences between manual and automatic transmissions — particularly the way that the liquid in automatics couples the transmission to the engine so fluidly that gears seamlessly and solidly shift without the rigidity and narrow tolerances of standard transmissions. In the liquid world of the globalized economy, solid connections play a similarly invaluable role; in this case, taking the form of leadership and linkages with other people.

Leaders face obstacles in every dimension. That is why they need clear vision and priorities; consistent measures of success; and informed, but timely and unambiguous, decision making. These are all essential components of solid leadership in a liquid world.

In large part, this means making sure that everyone understands where we as leaders believe that our organizations are going, why, and what trade-offs should be made to achieve the most important priorities. It sounds pretty straightforward, although in reality it is anything but. Our followers need to understand the precise destination, they need to understand the urgency of the mission, and — when push comes to shove — they need to know what comes first, whether it is expediency, economy, or another overarching principle. If nothing else, the job of a leader in any organization is to make it clear what the priorities are when it’s time for trade-offs to be made.

In January, I participated in a panel on “Leading in a Networked World” at the World Economic Forum in Davos, Switzerland. I made the point that leadership attention is perhaps the scarcest resource in today’s highly networked world. The amount of information, the compressed time frames, and the huge span of control in our extended enterprises can be overwhelming.

And, therefore, we as leaders need to focus our attention on the most important matters. My strategy for focusing attention is to be “minds on, but hands off.” By this I mean that leaders are responsible for everything important, but we don’t have to actually do everything important.

There’s no question that the buck stops here. And we’ve seen that shareholders, juries, and the American public have very little patience for a leader’s excuse that he or she wasn’t aware of what was going on. We must understand and decide — but we don’t personally have to execute. Our trusted colleagues can do that.

To embody these three qualities of leadership — communicating what comes first; institutionalizing consistent measures of success; and being minds on, hands off — requires us to do something almost heretical in today’s world: to “slow down” a bit. In a liquid world, less is more in several important ways.

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  1. Chuck Lucier, Steven Wheeler, and Rolf Habbel, “CEO Succession 2006: The Era of the Inclusive Leader,” s+b, Summer 2007: This survey’s findings — that today’s CEO needs to actively engage his or her board, investors, advisors, and other constituencies to mobilize the company and embrace opportunities — support the author’s observations about leadership. Click here.
  2. Thomas Friedman, The World Is Flat (Farrar, Straus and Giroux, 2005): The most popular account to date of globalization and the rapidly changing commercial relationships among nations. Click here.
  3. Mark Gerencser, Fernando Napolitano, and Reginald Van Lee, “The Megacommunity Manifesto,” s+b, Summer 2006: Solid leadership can be developed across public-private-civil sector boundaries if the right conditions are in place. Click here.
  4. Joseph E. Stiglitz, Globalization and Its Discontents (W.W. Norton, 2002): An economist and former senior vice president at the World Bank offers his view of globalization, warts and all. Click here.
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