Leadership is all about decisions

Most of the leadership gurus today build their brands around specific insights on what a person needs to become a great leader. As much as there are some brilliant insights out there, in its simplest form leadership has everything to do with the degree of recognition a person receives for their ability to make consistently good decisions within a given context.

Leadership contexts have become fluid – traditional knowledge may no longer be relevant.

The problem faced by leaders today is that contexts have become fluid – in the past we were classified into productive roles such as doctors, lawyers, engineers and politicians. Within the context of those roles we could excel to become better at making context specific decisions, eventually to be seen as leaders. Doctors had to make decisions on the physical well-being of people, lawyers had to win cases, engineers had to build things and politicians had to govern.

But today these roles are no longer what they seem – leaders are not recognized for their ability to make decisions within static contexts anymore – they are now forced to deal with rapidly changing environments that require decisions on subjects they never imagined and for which they received no formal training. Moreover, they need to have surefire decision reflexes – society is no longer the slow and mute organism it was once perceived to be – it is now a lively, active and responsive contributor to its own destiny.

Here is a simple example – automation in engineering has replaced the need for basic engineering functions. Software now performs all of the calculations that engineers decades ago had to do by hand. Engineers are now, more than ever, knowledge workers that perform data analyses to determine optimal structures. Buildings, roads, energy – these are all data driven projects.

Decisions of likelihood

This is the era where correlation is king!

The pressure to make decisions in these fluid environments are immense – people want answers now, because tomorrow everything would have changed. Gone are the days where leaders could wholly rely on things that worked in the past. This new era demands decisions made on fresh information.

The only viable way to access fresh information is by querying the active data sources at one’s disposal. This means that live, disparate data sources must somehow be combined in a way that make it possible for leaders to assess the current movements of their markets, and attempt to predict what the future holds. The faster the environment changes, the higher the risk that their predictions will be false, or worse, irrelevant.

This market movement is the force that is driving the need for decisions of likelihood. Big Data analysis and data science does a wonderful job of this – by analyzing large data sets and applying some statistical magic, predictions can be made on the basis of the likelihood that certain events will take place. This is the era where correlation is king!

Consumer want is killing authority

An over-reliance on Big Data is undermining authority and turning leaders into gamblers. Big Data isn’t really the culprit though – it is merely a tool that is easily misused. The true culprit here is the force with which consumers can voice their demands, and if not met, move their business elsewhere.

We live in a consumer driven world – what consumers ask for determines the amount of money businesses have in the bank. The problem is that consumers are driven by what they want, rather than what they need.

I recently read a post by Dr David Katz on the issue of obesity – consumers want food that tastes good, and that normally means more sugar, more salt and more fat. Leaders in the food industry are using Big Data applications (among other things) to scientifically design foods that consumers crave, in spite of the obvious health consequences. It is this difference between want and need that is undermining authority.

Big Data is changing leadership as we know it

A market without real leadership tends to self-destruct.

Leadership, defined as being a recognized authority in a specific context, is dead. Data driven decisions have created a new generation of leaders that maximize profits through well researched gambles. If the data reveals a pattern that shows the route to profit, then that pattern becomes the basis for decisions.

Here is the twist: if leaders rely on Big Data analyses to drive their decisions, then they are not leading anymore. They are following their market, and a market without real leadership tends to self-destruct.

Decisions of principle

As leaders we need to create stable contexts that are defined by useful and constructive principles.

True leaders give direction – they determine the boundaries that will keep their following safe, and provide the guidance that will allow them to thrive. Every decision a true leader makes is for the benefit of their followers. If the major players in the food industry spent their marketing savvy (and cash) on selling truly healthy food, then they would almost certainly bring about a change in consumer culture. Moreover, they would more likely than not increase the longevity of their markets which means they inherently increase the long term viability of their businesses.

We are at a critical juncture as leaders – we have been given access to something that acts like a nervous system – with Big Data analytics we can recognize and respond to the patterns of our followers as they unfold. But the data, and its direction, is not the true value. The pattern isn’t always indicative of a useful and constructive decision. No, as leaders we need to create stable contexts that are not defined by productive roles or by the force of consumer data, but by useful and constructive principles.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.