New leadership for the 21st century? Is this a misnomer? Are we not already in 2020? According to my math, 20 percent of the century is over.
Unfortunately, our current business education and practices are still centered on or permeated with concepts and practices of the 20th century. Business concepts such as agency theory, maximizing shareholders’ wealth, productivity efficiency, and individual motivational theories still dominate business schools’ curriculums and typical conversations in corporate boardrooms.
The 21st century business environment has changed, however. Whether through technological innovations or shifts in consumer behaviors, there are more disruptions these days. There are many successful businesses today that were not present 10 to 20 years ago, and there are successful products or businesses of 10 or 20 years ago that have dropped off our radars or are no longer in existence. We have experienced a seismic shift in how businesses are operated due to the convergence of new and different technologies, but we are still operating under the old paradigm.
Technological advancements, such as artificial intelligence, robots, and digital technology, or existential threats such as climate change or a virus pandemic are clearly indicating that we can no longer practice as we did in the 20th century. Most organizations in the 20th century were designed to thrive under a stable and controlled environment by using quantitative techniques and models. A recent book on decision making, “Radical Uncertainty: Decision-making Beyond the Numbers” by John Kay and Mervyn King, aptly discusses how our reliance on numbers might not be the best strategy, especially in an unpredictable and fluid environment. They recommend that “we should adopt business, political, and personal strategies that will be robust to alternative futures and resilient to unpredictable events.” The existing models are no longer applicable and useful, but they are persistent, and it is difficult to stop the momentum once the inertia is activated. However, the time is ripe for our conversations and practices to shift.
So, what type of leaders do we need for the 21st century? What type of leader would be ideal during times of disruptions and crises? I believe we need a move from a rational and efficiency-based model of leadership to virtuous leadership. Alexander Havard, founder of the Virtuous Leadership Institute, suggests the use of classical virtues as the basis of effective leadership.
The word virtue has been discussed ad nauseam in philosophy and psychology over thousands of years, and I would not enter into the discussion arising from these debates. However, there seem to be two common threads correlated with virtuous leadership.
The first component of virtuous leadership is “practical wisdom.” Aristotle called it “phronesis” as distinguished from “arete,” “virtue” or “excellence,” to suggest that one who is practicing and demonstrating practical wisdom would be acting virtuously. If the COVID-19 pandemic has shown anything, it is that leaders need to demonstrate practical wisdom. The debate between economic well-being and human lives can be effectively resolved only if leaders act with practical wisdom. There has to be more wisdom demonstrated than an either-or decision of simply choosing between the health of the economy and human lives.
Here is a concrete example of wisdom during this pandemic. Initially, the federal government did not want the U.S. population to wear masks to prevent the spread of the virus, but as we have seen in recent days, this stance has changed. In contrast, South Korea and other Asian countries are doing a much more effective job of flattening the curve by recommending and forcing people to wear masks when interacting with others. The initial rationale for not adopting this practice in the U.S. was that experts were afraid that they would run out of masks for health care personnel, and on the surface, that makes perfect sense, but further examination shows that the rationale might be flawed. First, just because you do not recommend the masks does not mean that some individuals would not be buying them anyway (worse yet, hoarding them). The bigger flaw is that because of this advice, the number of cases has exponentially grown, and the need for masks has also increased, making the shortage inevitable.
There also is a group in San Francisco now protesting against distance learning: StrikeReadySF. Some of their points, including the superiority of face-to-face learning and personal interaction over distance learning are well taken, but the question I want to ask is, “Is this the ‘right’ time to be protesting?” We are dealing with a pandemic, where thousands of people are dying each day (some people might call it a war), and sometimes we just need to adapt and do the best that can be done under trying circumstances.
The second component of virtuous leadership is the possession of “moral imperatives” focused on the collective good and humanity. Although some might argue that this concept should be subsumed under practical wisdom, given what we have seen during the pandemic, I contend that we need to keep this concept separate since practical wisdom can be applied for the benefit of a few or oneself.
The need for collective good or humanity is amply demonstrated by the type of behavior that says, “If I am going to take a risk, and if I get sick, then that is on me, and nobody is going to tell me not to take the risk.” John Stuart Mill put it best when he said that yelling “Fire!” in a crowded theater and getting people trampled and injured, or even killed, would not constitute personal liberty. During the pandemic, we can apply the same principle. “If I am an avid golfer, and I’m going to go out and play golf with a bunch of likeminded people, what is wrong with that?” Well, if my behavior causes others to get infected and that results in hardship or worst of all, someone’s death, I might be morally responsible for that person’s death.
We are all interconnected and interdependent, especially when it comes to business and commerce. We discovered this with Japan’s natural disaster in 2011. The supply chain and other businesses were hampered by the disaster, and the impact was felt way beyond the shores of Japan. This pandemic will have an even greater impact than the tsunami in Japan since every country will feel the impact of the virus on their shores. Therefore, anyone who thinks their country is not going to be impacted by the virus because they have a small number of cases will be sadly mistaken.
Mencius, a great Chinese philosopher, once asked King Hui about the point of King Wen’s beautiful pond and garden if they were not shared with others in the kingdom. If they benefit only the ruler and a few of his family members, then greater collective good would not be achieved. Only in sharing of beauty with others can King Wen be able to enjoy truly the beauty of his pond and garden.
Being virtuous is not easy; however, we can try to help our students learn how to become more virtuous as they move onto their adult lives or professional careers, and help our current leaders to act more virtuously as they try to deal with the ever-changing business landscape and unexpected crises such as the coronavirus outbreak.
So, what are the skills that go into developing practical wisdom and moral imperatives? Here are several suggestions for developing virtue (obviously it is not all-inclusive):
■ Broad and diverse perspectives. It is important for us to be broadly educated and able to hold diversity of ideas from which to choose a solution or action that would be most beneficial to people and society. I cannot imagine a leader who is ideologically narrow and biased to be able to entertain diverse ideas or solutions and choose the wisest one. Furthermore, divergent thinking can help one discover new ideas that can lead to innovation.
■ Daily reflection. We need leaders who can learn from experience so that their decisions or solutions are grounded in practical means. The concept “practical wisdom” originates from the ability to make good decisions that are embedded in practice. Benjamin Franklin, one of our nation’s Founding Fathers, had a system where he reflected on 13 virtues each day and practiced and tracked one virtue per week. The key to his success was both his focusing on one virtue and reflecting on his experiences daily.
■ Development of empathy and compassion. Virtual leadership requires external focus and concern for others. It would be difficult for anyone to succeed in doing that if one does not possess and demonstrate empathy and compassion.
■ Vision and far-sightedness. Being able to anticipate the future and look beyond what is in front of you (both time and vision) is an important element for demonstrating wisdom. Since we are in Rochester, the classic example of a lack of wisdom would be what Kodak did with its digital sensor technology. Kodak’s leaders did not have the foresight to see the massive transition from film to the digital age. If they were wise, the most dominant sensor manufacturer today would almost certainly be Kodak, not Sony.
■ Letting go of ego. Again, this goes to the second component of virtuous leadership. It would be extremely difficult to practice virtuous leadership if you are a narcissistic egomaniac, which is another reason why concern for others is as important as practical wisdom in virtuous leadership. If one’s wisdom is practiced only to benefit a few rather than the many, then it would not be virtuous in my book.
The notion of virtuous leadership is not strictly limited to business; it is applicable to all elements of life. Nor is virtuous leadership limited to people in leadership positions. In fact, everyone can practice virtuous leadership, which is another reason why it is important for business schools to change their pedagogies and focuses to develop virtual leadership in their students
Finally, to circle back to why virtuous leadership is the best type of leadership for the 21st century: One of the key reasons why virtuous leadership is effective during the times of disruptions and crises is how effectively virtuous leaders can decide and act to accomplish objectives. For instance, they will know when to act and when to be patient. They will know what needs to be changed and what needs to be conserved. They will know when to change and when not to change. They will also know when to speak and when to keep silent and listen. They will know how to motivate people and how not manipulate people. They will know when to be bold and when to be conservative. They will know when to shift direction and when to stay persistent. They will know what ideas and actions would be best to benefit the most people in the society.
Virtuous leaders are also effective innovators since their practical wisdom makes them divergent thinkers as well as courageous and prescient thinkers. They do not just endorse or communicate change; they inspire and awaken others to act. Their ability to translate their visions into practice to benefit the many is what makes their leadership virtuous. Most importantly, virtuous leadership might be our humanity’s best hope to avert our existential threats.
Kenneth Rhee is the dean of the School of Business and Leadership at Nazareth College.