The New Demands of 21st Century Leadership

8 years, 1 month ago - August 09, 2013
Perhaps the most frequently asked questions these days in boardrooms, corner offices, and business school classes is: What is leadership and how has it changed in the 21st century?

There is little doubt that the business landscape has changed in the last two decades driven primarily by two forces: globalization and technology. Not surprisingly, these two market influences have directly impacted how heads of companies lead.

The most notable change has been in what skills are believed to be necessary to lead a company. In previous generations, business leaders were chosen for their specific business acumen including their business-related knowledge and skill sets such as financemarketing, or strategy. Pedigree andeducation also played a role in who was placed on the top floor of a company.

In recent years though, there has been a shift toward less-tangible psychological, emotional, and people skills as prerequisites for leaders. Of course, the hard skills are still important—leaders still need to know the nuts and bolts of their business—but these knowledge sets have become, in my experience, necessary but not sufficient, for getting the key to the executive washroom.

I have identified four such areas that have gained prominence in my work with senior management of companies around the world during the last decade.


Though there are still a few leaders who are relative luddites in the now-wired business world, they are certainly a dying breed. Knowledge and use of the latest communication technology are becoming prerequisites for this and the next generation of leaders. The use of technology can help leaders to better fulfill the wide range of responsibilities they have.

At the same time, leaders must also be careful to ensure that they maintain control of their technology rather than becoming a slave to it. Though being connected 24/7 can be a useful tool for leaders, it can also become an albatross around their necks that creates stress, reduces effectiveness and efficiency, and exacerbates work/life imbalance.

Decision Making

The ability to make decisions may be the most important skill that a leader of a company must have. The decisions that heads of companies make determine all aspects of its functioning and performance, from hiring to strategic planning to product development to distribution and far beyond. One bad decision alone can ruin a company.

Decision making has never been an easy task for company leaders due to the depth and breadth of the decisions they must make. But it has become even more difficult with globalization, economic uncertainty, constantly changing technology, unstable workforces, among many other changes that have occurred in recent decades. Plus, leaders must overcome the social (e.g., groupthink) and psychological (e.g., cognitivebiases) obstacles to effective decision making.

To make good decisions these days, leaders must collect extensive and disparate information, balance potentially conflicting needs and goals, gather a team with diverse expertise, and then make decisions in an ever-changing landscape with an unpredictable future.


Today’s leaders are no longer expected to just generate high ROIs and increase shareholder value. They must also have high emotional intelligence (EQ), be sensitive to the needs of their many stakeholders, and build healthy relationships with those they work with, whether board members or their employees with boots on the ground.

This EQ enables today’s leaders to forge strong relationships at every level of their responsibilities, enabling them to communicate empathy, build trust, and demonstrate strengths as the head of their company. It also gives them the self-awareness and self-control to better manage their own emotions and that of their charges during times of stress and crisis. Leaders’ ability to effectively manage their emotions, including fear, frustration, and anger, enables them to remain a calm in the eye of the many storms they will face during their tenure.

Physical Health

Many companies today have offices, factories, or distribution centers in far-flung locations around the world. This decentralized corporate structure can mean considerable traveling for company leaders and many others in an organization. One of the often unrecognized costs of globalization is the physical toll it takes on heads of companies, their senior management, and many other members of a company who are required to travel. Lost sleep due to jetlag, poor diet when eating in restaurants, having meals during business meetings, and eating on the run, and little time or energy for exercise can cause leaders to lead a physically unhealthy life that can lead to obesity and poor health, hurts their productivity, interferes with their personal lives, and may limit their longevity with a company.

Leading a company is like running several marathons every month. You need to be well conditioned to meet the physical demands of the job. This requires that you commit yourself to sufficient sleep, regular exercise, a healthy diet, and down time to rest and recharge. It also involves creating as much balance in your life as possible, allowing yourself outlets for the inevitable stress you will experience at work.



Text by Psychology Today

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