How Business Leadership Must Change

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In the business world today, the way a firm’s leaders exercise their authority has to change radically from the way they have done so in the past if companies are to survive in fast-paced, global economies.  That’s the message of Barry Salzberg, soon to be the global chief executive officer of Deloitte Touche Tohmatsu Limited.

The model can no longer be the captain of the ship style of barking orders to underlings who loyally carry them out to the letter.  The organizational structure that is built around an inflexible chain of command is a thing of a past, outdated and out of touch with today’s reality.

In today’s organization, leadership needs to be pervasive, not just something that comes from a few people at the top.  Leaders need to be open and honest with their workers.  Leadership has to come from everyone in the organization, old and young alike, who are able to be more nimble, more efficient and more innovative than the competition.

The idea now is to create an atmosphere that is helpful to all workers, one where everyone has input, given rise to even greater innovation.

Leadership is needed everywhere in an organization, not just in the executive suite.  So the corporate ladder metaphor no longer holds.  Employees need the flexibility to move in different directions in an organization, not just up, depending on their particular circumstances.

Leaders today not only need to be accessible to all employees, they need to actively solicit employee input.  They need to show that employees can freely voice their opinions without concern that there will be some kind of negative consequences.  Leaders need to get out of the office and meet regularly with managers.  There is no substitute for personal contact, according to Salzberg.

Leaders also need to be open and honest with their employees, especially in a world where social networks are playing a larger and larger role.  Communication can travel much more quickly now, and directives from leadership can spread around the organization in the blink of an eye — there is no place to hide.

Another foundation of leadership is facing up to problems, not pretending they aren’t there.  You cannot avoid problems and think that they will go away.  Only by actively engaging with problems can you take care of them.  The most important role of the leader, according to Salzberg, is delivering the truth, and making sure everyone has input.  It is impossible to build up trust in an organization without doing this.

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