This is the first in a two-part series examining leadership development models in an era of rapid change and disruption.
Executive leaders and managers face an unprecedented rate and degree of change in the post-Covid business landscape. This requires all of us to adapt our leadership development models to ensure our organizations are prepared for an uncertain future.
Investor and entrepreneur, Ray Dalio, has pioneered deep knowledge about how we can approach this future. His blueprint for success lays out how leaders can remove the guesswork from their leadership development models and efficiently deploy best practices.
In this post, we’ll take a brief look at how leadership is evolving in our exponential age and what we can learn from Dalio’s “blueprint for success” to help navigate the shifting leadership development landscape.
The Leadership Mandate Has Changed
The rise of China in our globalized economy has shifted the balance of both political and economic power. We must adapt to this change.
New leadership development models must keep us focused on the usual priorities as well as emerging realities. For example, the development of increasingly powerful AI presents leaders with both opportunities and an ethical landscape to navigate.
Yes, we must still deploy strategies for risk management, scalable growth, and profitability. But in an increasingly complex and disrupted business environment, we must also become and develop future-ready leaders. We must instill a future-ready mindset in ourselves and our teams, foster cultural antifragility, and be willing to adapt our deep systems in the face of rapidly-changing technology.
Why?
As technology advances at an unprecedented pace, businesses need to be equipped with leaders who can adapt, innovate, and lead in this rapidly-shifting landscape. By embracing new ideas or learning from existing frameworks, we can begin to identify future blueprints for successful leadership development models. Then, we can start to cultivate the leadership skills and mindset needed to thrive in the face of uncertainty and disruption.
The Realities of an Exponential Age
We are living in an exponential age. Technological progress is accelerating at a faster and faster rate, the world is becoming increasingly characterized by globalized networks, and volatility and disruption are more prevalent than ever. Any new leadership model must deploy a multidimensional and holistic approach. Linear, step-by-step models are stuck in the past, reaching back into the paradigm shifts of the Industrial Revolution. We must redefine these paradigms in favor of models that synthesize various learning strategies and prioritize a continuous, ongoing process that empowers and supports leaders within their organization.
These models should encourage leaders to lean on principles such as learning from failure, promoting a culture of honesty and trust, and encouraging radical transparency across the organization. One such model is Ray Dalio’s Principles.
Insights from Dalio’s Blueprint for Adapting Leadership Development
In his “blueprint for success,” Dalio recommends we build a culture of radical transparency. We must be open and honest with each other, despite the inherent difficulty and discomfort. And we must be willing to challenge each other’s (and our own) assumptions, ideas, and beliefs.
This is facilitated by embracing “thoughtful disagreement,” in which internal tension is understood as an opportunity for learning and growth. Part of our internal decision making process needs to be an open dialogue and respectful debate that embraces perspective as a key motivation.
Dalio also emphasizes the need to inform our decisions with an evidence-based approach. Intuition can easily lead us astray. We must also subject our ideas to the best metrics and analytics available. A decision is not adequately informed unless it is informed by data.
Following Dalio’s lead in embracing data challenges us to foster a culture of learning. How we lead should always encourage our teams to be focusing on ongoing education and development. This makes it easier to stay up-to-date on industry trends, best practices, and the latest innovations that actually matter to your business.
All of this should be focused on results. It is easy to view the busy hum of day-to-day activity as success, but it is the results leaders are entrusted to deliver. To do so, Dalio recommends we prioritize achieving tangible results, clear incremental goal-setting, and the tracking of progress. This must be done within a framework that rewards merit and enforces accountability.
Now, let's delve deeper into some of Dalio's key leadership development principles that have been a profound help to the CEOs I work with.
Failure as a Learning Opportunity
Effective leaders embrace failure, theirs and their teams’. We all fail now and then. And it hurts. But once we recognize failure as a critical component of the learning process, we can start using it to become better leaders.
As Dalio put it, “...one of the worst mistakes anyone can make is not facing up to their mistakes.” Dalio believes that a successful corporate culture is one in which making mistakes is acceptable, but failure to learn from them is not.
It’s painful to make mistakes, but avoiding that pain means we lose out on learning opportunities. Instead, we need to confront the discomfort and figure out how to lead better.
It’s also one of the strategies you can use to future-proof your business against rapid change. If you embrace every failure as a learning opportunity, then massive disruption begins to look like a learning opportunity as well (which it is). And once you’ve got a culture that embraces uncertainty itself as an opportunity to grow and learn, you’re well on your way to building a resilient organization that is prepared for whatever the future holds.
A Culture of Trust
Trust is everything. Some leaders deploy fear to keep their teams going. At best, this achieves conformance at the expense of performance. At worst, it undermines cohesiveness, destroys morale, and makes your business vulnerable to disruptive blows.
Dalio argues that a cohesive team built on trust can take on anything the market throws at it. When we trust each other (really, really trust each other), then we can share opposing viewpoints. Not only that, we can grow to enjoy opposing viewpoints and then proactively encouraging them.
Dalio said it himself: “The most meaningful relationships are achieved when you and others can speak openly to each other about everything that's important, learn together, and understand the need to hold each other accountable to be as excellent as you can be. When you have such relationships with those you work with, you pull each other through challenging times; at the same time, sharing challenging work draws you closer and strengthens your relationships. This self-reinforcing cycle creates the success that allows you to pursue more and more ambitious goals.”
When we openly discuss opposing ideas, what emerges is deeper patterns and issues that we are confronting. And the more we understand these dynamics at work in our business, the more informed our decision making process will be. Dalio’s challenge for us to pursue more ambitious goals is paramount here. We cannot take on the world until we first take on our simplest mistakes.
Radical Transparency
A culture of trust is not possible unless we commit to both radical truth and radical transparency. The German philosopher Jürgen Habermas summed up the Enlightenment’s commitment to truth and transparency this way:
“And just as Kant made the public nature of critical debate the touchstone of truth that put everything proclaimed as true to the test of whether its validity could be upheld before any rational human being, so Hegel too expected much from public opinion: ‘… that a man’s castle-building at his fireside with his wife and his friends is one thing, while what happens in a great assembly, where one shrewd idea devours another, is something quite different.’”
Dalio recognizes the value of the shrewd idea by emphasizing a culture of radical transparency as crucial in bringing unresolved conflict and issues to light.
Dalio recommends that organizations not only reward good ideas but also actively address all of their problems. He believes that an organization that openly acknowledges and takes action on every problem is more likely to achieve excellence compared to one that tries to conceal its issues.
The Short and Long Game
We’ve all had the experience of succumbing to the corporate tunnel vision in which we can only see the next quarter. At the same time, we can’t be exclusively focused on five years from now. This is why Dalio’s philosophy puts so much emphasis on balancing long-term strategic vision and goals with the day-to-day management of the “machine.”
Future-ready leaders recognize the need to factor in both immediate results and long-term consequences when setting goals and making decisions. Our thinking, perspectives, and strategies must always reflect a concern for both the short and the long-term.
This is what Dalio means when he encourages leaders to manage as if “operating a machine” in how they chase their organization’s goals:
“No matter what work you do, at a high level you are simply setting goals and building machines to help you achieve them. I built the machine that is Bridgewater by constantly comparing its actual outcomes to my mental map of the outcomes that it should be producing, and finding ways to improve it.”
As we balance the short and long game, we must keep asking ourselves what we intend to achieve, how a given decision helps us achieve it, and whether we are actually achieving it.
Navigating the Changing Landscape of Leadership Development
We are operating within an exponential world, one that is unforgiving to complacency. We need to rethink existing approaches to leadership to succeed in an era that demands so much more from our leaders.
From building radical trust between people and teams and confronting all of our mistakes, to regarding our organization as a machine intended to get a job done, Dalio’s ideas provide a framework for navigating the chaotic business landscape with both the present and future in mind.
If you’re serious about developing an updated leadership curriculum to ensure your organization is future-ready, contact me and my team today. We can provide support in developing leaders who are prepared to navigate an uncertain future.