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How to become a future-fit leader

Photographic portrait of Dominic Mahony
Dominic Mahony

Partner, EY Lane4, EY Professional Services Limited

7 minute read 19 Jul 2021
Related topics
Purpose
Workforce

To thrive in this ever-complex environment, leaders must embrace the complexity within themselves.

In brief
  • In an ambiguous era, future-fit leaders need to balance and embrace competing demands.
  • Leaders need to break the cycle of short-termism by influencing their governing boards to ensure commitment to a long-term investment philosophy.
  • Tuning in to an extended purpose can provide leaders with a sense of fulfilment and underpin their performance edge.

The business environment has shifted substantially. Leaders are in a new context. There are new rules, and they need to adapt how they think and act to succeed in the years to come.

Company life expectancy is shrinking, indicating that leaders are finding it harder and harder to deliver sustainable performance.1 What worked in the past isn’t working now; there’s a mismatch between the ways leaders currently think and act and the environment they are in. For example, over the last 30 years 75% of UK FTSE 100 companies have vanished. And, while back in the 1970s, a Fortune 500 company could reasonably expect to last 75 years, in more recent years, companies on the list do well to last 15 years.2 Adapting to this new environment will require a complex and significant shift in how business leaders think and act; becoming future-fit is not simply a case of adjusting to ‘a more digital age’.

Methodology

With new research reports being released on the future of work seemingly every day, we were keen to understand what this really means for leaders of organisations.

In order to do this, our research team carried out a rigorous project that included a survey with over 150 C-suite leaders from organisations with at least a £10 million turnover and 17 in-depth interviews with leaders across the globe who have won industry awards for their future thinking, innovation and disruption.

Our aim was to answer the question, “What mindsets and skills do leaders need now to ensure the success of their organisation in the future?” And, our findings suggest that future-fit leaders have three things in common:

  1. Five paradoxical mindsets
  2. An interconnected view of the world
  3. An extended purpose
1

Chapter 1

Five paradoxical mindsets

Future-fit leaders hold a series of mindsets with competing tensions.

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We define a mindset as the beliefs, attitudes and values that filter the way that we look at the world. The mindsets that leaders adopt are critical because mindset and behaviour are inseparable. Our mindset influences our thought process, which in turn influences how we act and ultimately what we do.³

 

In reverse, our actions and experiences also influence our mindset. To thrive now and for years to come, leaders must be prepared to let go of mindsets that are holding them back and master those that will help them flourish.

 

The leaders we interviewed had a set of mindsets that made them truly stand out from the crowd as future-fit. In a more intricate and ambiguous business era, where leaders are constantly pulled in different directions by competing demands, they demonstrated a set of mindsets that allowed them to move past a black and white or ‘either-or’ way of thinking and towards a ‘both-and’ mindset. They were able to acknowledge competing tensions, embracing them so that they could be explored to their fullest potential, allowing for a broader range of possible solutions.

 

Whilst it was clear from the interviews that these leaders held tightly to their core values and long-term ‘missions’, the stories and examples they shared often highlighted how they were able to flex their mindsets in response to the situations they encountered. This enabled them to avoid getting trapped by idealism and make progress towards ambitious goals, without losing their sense of self, authenticity or integrity.

 

In total, our findings suggest there are five essential mindsets leaders need to adopt if they are to be successful in the future. Each mindset is paradoxical: seemingly contradictory yet interrelated. No mindset can achieve performance without its pair, and leaders must embrace all five mindsets to become ‘future-fit’.

 

The five paradoxical mindsets of future-fit leaders:

  1. Confidently humble leaders inspire others to have confidence in them and their ability and they’re honest about their limitations, aware that they can’t achieve ambitious goals alone.
  2. Responsibly daring leaders believe everything is worth trying and anything is possible and they’re accountable for what they achieve and how they push the limits.
  3. Politically virtuous leaders enhance performance by being shrewd in the circumstances and know that they always have to do the right thing.
  4. Ambitiously appreciative leaders know that to achieve ambitious goals they need to be relentless and determined and they need to find a way to be sustainable and keep perspective.
  5. Ruthlessly caring leaders make tough decisions to achieve performance and remain compassionate no matter what.

Organisations should therefore be building leaders’ self-awareness and encouraging them to engage in honest self-reflection. Our findings suggest each of the five paradoxical mindsets are anchored and held in balance by a leader’s self-awareness. For example, research suggests that politically savvy leaders are not only socially astute, tuned in to those around them and diverse social situations, but tuned in to themselves; able to maintain perspective, act conscientiously and keep a healthy gauge on their accountability to both themselves and others.⁴

2

Chapter 2

Interconnected worldview

Future-fit leaders hold a worldview where they consider people, profit and planet in decisions.

We define a worldview as the consistent and integrated way in which people interpret and understand how the world works. Future-fit leaders hold an interconnected worldview, interpreting and understanding the business context as a system where everyone and everything is joined together.

As a result, future-fit leaders work towards creating sustainable impact for multiple stakeholders including, but not limited to, employees, customers, society and the interests of future generations to come.

However, the interconnected business worldview isn’t about just ‘doing good’ or ‘giving back’ at the cost of profit, it’s about contributing positively and making profit. For future-fit leaders, business in this sense is very much a ‘both-and’ not ‘either-or’. A drive to create profits and more shareholder value is important, but it isn’t the only focus.

However, our data shows this balanced stakeholder approach is a stark contrast from current leadership practice with only 5% of C-suite leaders reporting to feel that their business decisions equally balance all stakeholders’ interests.5

The future is now: the new context of leadership
of C-suite leaders report feeling that their business decisions equally balance all stakeholders’ interests.[5]

To become future-fit and sustain performance in a modern age it’s imperative that leaders think about the system in which they operate and consider multiple stakeholders in their key decisions. Research consistently indicates the benefits of this approach. For example, organisations perform better when they: effectively collaborate with suppliers; align their business activities with the environmental concerns of stakeholders; manage and develop trusting relationships with multiple stakeholders; are socially accountable to stakeholders and the public; and invest in sustainable infrastructure. They report increased corporate reputation, innovative capability, ability to maintain superior financial results over time, money saved in the long run and financial resilience in times of crisis.6,7, 8, 9. 10,11

Our findings suggest one of the toughest challenges for leaders will be breaking out of the short-term cycle pervasive across many businesses. Senior leaders need to start influencing their governing boards to ensure commitment to a long-term investment philosophy. Instead of focusing time and energy predominantly on quarterly reporting, leaders should shift focus to establishing and communicating the metrics most useful to investors: metrics relevant to the company’s long-term value creation. Organisations must continue to support leaders in breaking the reinforcing cycle of short-termism. 

3

Chapter 3

Extended purpose

Future-fit leaders are deeply connected to a meaningful and ongoing purpose.

One of the strongest themes that united the 17 future-fit leaders from our study was that they were driven by what we’ve termed an ‘extended purpose’; a reason to lead that extended beyond themselves and even beyond their company.

Leading with an extended purpose is much more than engaging with a corporate social responsibility initiative or charitable act. A future-fit leader’s mission is meaningful, inherently ongoing and always connecting them into the world and the people around them. It’s not an add-on to the organisation, but a fundamental ingredient to having a successful business.

Research has long demonstrated that leading with a strong purpose can enhance business performance and innovation, and motivate employees.12,13 Now more than ever, evidence suggests it will be imperative in attracting and retaining top talent and customers.¹⁴

Working towards an extended purpose was not a self-sacrificial act for the future-fit leaders, it was a big part of what gave them a sense of fulfilment in their role and underpinned their performance edge. Our findings also suggest this extended purpose has a positive impact on these leaders in relation to their resilience, their ability to make decisions and their courage to do what needs to be done, rather than opt for what’s quickest and easiest in the short-term.

Whilst the importance of purpose in leadership is not new, the idea that leaders need to have an extended purpose ties in with the bigger shift in thinking towards an interconnected worldview. It helps leaders connect, understand and consider their role within the wider systems they are part of.¹⁵

Leaders yet to identify and connect with their extended purpose are likely to be left behind by those who do.¹⁶

Future-fit leaders are extremely clear on who they are, what they stand for and what mark they want to make on the world. One way in which leaders can gain insight into this personal purpose is by exploring their life story;¹⁷ reflecting on key moments and challenges they’ve faced over the years, and what’s kept them going.


Summary

Throughout history, academics and consultants have tried to put forward new approaches to leadership, but the time for subscribing and following a single approach or ‘way of operating’ has passed. To become truly future-fit, leaders must balance messy tensions within themselves, operate with a worldview that acknowledges the multiple interconnected systems they operate in and tune in to a powerful and personal purpose.

About this article

Photographic portrait of Dominic Mahony
Dominic Mahony
Partner, EY Lane4, EY Professional Services Limited
Skilled in shaping long-term succession planning and consulting with executive leadership teams. Experienced in managing high-performing environments, ranging from the British Army to the Olympics.
Related topics
Purpose
Workforce

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.