18 Aug 2020
What can the post-war economic boom teach us about post-COVID leadership?
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History can be a useful teacher, but the lessons need to be carefully examined to identify the type of leadership that will cope with a world of disruption.
When Henry Kissinger said, ‘It is not often that nations learn from the past, even rarer that they draw the correct conclusions from it’, he was surely right. But great crises do offer history lessons, and a chance to indeed learn and do things better.
In a recent article, McKinsey see ‘ten lessons from history for the next normal’.
For their history lesson, they draw on the post-WW2 boom in growth in the US, Western Europe and Japan, from 1945 to 1970.
Keys to a world beyond this crisis
History never repeats itself entirely. Despite the undeniable global impact of COVID-19, in some ways, this is a very different world to the post-45 one. Globalisation for one thing is a more powerful force. In 1970, cross-border trade amounted to 9% of the world economy, in 2017 it was up to 28%.
For McKinsey, it is important that globalisation must be reformed and reshaped to reflect the move to services, especially IT, and the emergence of regional trade as COVID impacts supply chains.
Secondly, this is an opportunity to renew the effectiveness of the public sector. Governments must deliver. People’s lives and livelihoods rely on it. Katja Hanns-Terrill, Managing Partner at Odgers Berndtson Germany, adds, “Another challenge for Governments is to modernise social policies to cope with issues like the gig economy, temporary working and the rise in unemployment likely to follow the global lockdown.”
Productivity challenges must be met
Productivity increases drove the post-war boom, but today poor productivity is a major drag on prosperity. This must change. Industry 4.0 and the introduction of tools like AI, robotics, genetics and the Internet of Things is absolutely key. An investment in reskilling must accompany this, not just for a select few, but for an expanded labour force.
How ready are managers to embrace new productivity-boosting tools like AI?
The Odgers Berndtson Germany 2019/2020 survey of around 2,400 executives from companies in a variety of industries and sizes across Germany, Austria and Switzerland, reported that managers are definitely ready for digital technologies. However, most don’t think their company is prepared to embed AI fully into its business model. In fact, only 23% of managers think their company has the appropriate infrastructure in place today to enable the adoption of AI.
Kristin van der Sande, Partner at Odgers Berndtson, adds, “Adopting new digital technologies is a good first step. But the ultimate goal is to adapt the culture of an organisation so that it’s constantly assessing how it can use those technologies to operate better. And clearly having the right talent to operate and make the most of them are key to success in this regard”.
Confident leaders are in demand
“Businesses have to step up in the post-COVID world, and the CEO, the right one, has to be to the fore. The businesses and other organisations that succeed in the face of so much change and disruption will require a new model of leadership that inspires the confidence of the people they lead.” says Manuela Klos, Associate Partner at Odgers Berndtson.
As our Odgers Berndtson pre-Covid survey revealed, confidence in senior business leaders, including the all-important CEO, was not high.
In association with Harvard Business Review Analytic Services, we surveyed nearly 2000 board members, executives and senior managers from every major market. This included many CEOs.
It produced the first-ever Odgers Berndtson Leadership Confidence Index, downloadable here. The Index reveals that, across the world, only 15% of executives are actually confident in their leaders to deliver. A large majority lack confidence in their leaders, including the all-important CEO.
But what makes a confident leader?
The data from the nearly 2000 respondents compared confident organisations against the rest, to understand what gives them confidence in their leadership. This revealed a potential competitive advantage, or in the current circumstances, a chance to emerge strongly from crisis.
There is a distinct type of leader that thrives in the face of the kind of disruption that is now normal.
Importantly, we found it is the leadership mindset, particularly their vision and preparedness for change, which separates the confident from the less so. (It’s how we assess leadership potential with the Odgers Berndtson LeaderFit Assessment method.)
Boards and execs alike want curious leaders with real courage and vision. And it’s a leader’s agility, resilience and strategic thinking that are the qualities most in demand.
The best leaders have already demonstrated their worth in 2020, adapting in their own ways to create not just a ‘new normal’, but a better one, just as the leaders who helped post-45 did.