Modern leadership through the 21st century’s corporate world
Kirjoittanut: Tuuli-Emily Liivat - tiimistä SYNTRE.
Modern leadership through the 21st century’s corporate world.
An essay written by Doneé Barendze, Sille Sinor and Tuuli-Emily Liivat.
Leadership is the action of leading a group of people or an organization (Oxford Languages). It has been practiced in the business industry to manage an organization and achieve wanted results. The methods of practicing leadership have changed over time and depend on various factors, such as the location or the type and field of organization.
In today’s world, we are recognizing mainly two leadership styles: Traditional leadership and Modern leadership. They differ from each other mainly by some characteristic traits, decision-making processes and the power distance between leaders and their employees (Rizvi, 2022 & Sturt, 2021).
Modern leadership has been brought up to be the new and effective way of leading an organization, especially among the new generation like millennials and Generation Z, who have entered working life (Llopis, 2022).
But what characteristics differ between modern and traditional leadership and what skills do a leader need to have to practice modern leadership?
1. Comparing modern leadership to traditional leadership
Traditional leadership and modern leadership are two distinct styles of leadership. In many places, leaders tend to choose traditional leadership over the modern one as it has a longer history and the style has worked effectively in the past. The characteristics of these two ways of leading have a few distinct differences from each other: the power distance that the leader has in their position and how they treat their employees and fulfill their needs (Rizvi, 2022). Traditional and modern leadership characteristics and the basic idea behind them will be gone over and compared to understand the differences and what impact it has.
1.1. Traditional Leadership
Traditional leadership refers to a leadership style where in order for a leader to achieve goals and motivate others, power is highlighted and used to gain the needed results. They tend to make decisions based on the norms without including others’ input. It is a more task-oriented way of leading, where there is a tendency to manage and measure the success of the work through the usage of metrics. This leadership style has been criticized to be more gender discriminating, is too involved with culture and tradition and caring for the community’s well-being rather than individual needs (Uslu, 2019 & Rizvi, 2022).
1.1.2. Power distance
Power distance means the strength of a society’s hierarchy. It means that different people with different statuses and titles are treated better than others, which oftentimes also means that those with higher titles use their power to control others below their rank. If the power distance is high the society accepts the inequality in power difference, which leads to encouraging authority and bureaucracy (Rizvi, 2022). In the context of a working environment, power distance refers to a hierarchy between leaders and employees as employees are expected to do what a person higher in the hierarchy tells or expects them to do. Employees are generally unable to publicly question or criticize the leader’s decisions and behaviour out loud, since they have the power to lower their position or fire them.
Traditional leaders are often seen to use their titles or position as a way to impress their employees and gain their trust and loyalty. Traditionally people higher on the hierarchy were experienced and therefore trusted to make the right decision and loyalty followed by their employees. But in a changing world, resorting to power as a leader can have negative outcomes in the working place and on employees, as leaders are followed because of threat and not because they or their vision are believed in. This may demotivate employees as they are not committed to the actions and ideas given to them (Rizvi, 2022).
The power distance can create conflicts and tension between employees and leaders. Because there is a set frame, challenging it or accidentally not following the structure can lead to heated discussions. Additionally, because leaders are not seen as friends but rather as bosses a bullying culture might be nurtured.
Power distance gives clear structure and can be helpful in a working place where employees have little working experience and are not highly educated. Their employees expect their leaders to have clarity and autonomy, in which case a leader with authority and good task-giving skills success to reach good outcomes and their employees satisfied (Uslu, 2019)
1.1.2. Decision making
When leaders are practising traditional leadership, only people in the higher hierarchy will be involved in the decision-making process. Decisions are made by considering the needs and benefits for the whole community and what would benefit the company. Employees are not involved in the decision-making, as it is seen to be the responsibility of the leader to make it. This leaves out the input from the employees and can demotivate them as they do not feel part of the organization and have no say in things (Rizvi, 2022).
Even though employees are not that involved in the decision-making, the leader is expected to have the knowledge of their employee’s general feelings and opinions (Uslu, 2019). Participating in the decision-making process would ease the lives of the employees and gain their trust and loyalty but since they are not heard, it oftentimes leads employees unsatisfied and not engaged with the decision made. Employees nowadays, especially Generation Z and millennials, tend to have more need to be involved and have an impact, to feel satisfied and happy in their job (Llopis, 2022).
Thus, traditional leadership is nowadays seen as an old way of leading as it does not engage the employees, therefore inducing and increasing the feeling of unfulfillment with their purpose or dissatisfation due to feeling that their lacks an impact.
1.2. Modern Leadership
Modern leadership is a form of leadership that focuses on knowledge sharing, trust building and promoting a sense of inclusion and belonging (Sturt, 2021). It nurtures an environment where employees feel heard and equal. It challenges traditional leadership by removing the power distance and aiming for a flat hierarchy. There employees can put their input regarding decisions making in the company. This way of leading is very useful when the company is going through changes. Modern leadership enables continuous learning, and collaboration, empowers employees, opens space for change, and more profit focus thinking (Rizvi, 2022)
1.2.1 Flat Hierarchy
In a flat hierarchy, the power distance is kept to a minimum, so the layers in a company’s organizational chart have been kept relatively thin. It allows employees to move in the chart easily and depending on their needs. As an employee, you have more opportunities to experience a leading position and create more value through impactful work. In a flat hierarchy, the decision-making process is faster as there are not many layers to get the decision approved by. Communication is more improved among employees and leaders when there is no need to hesitate to talk with others (Mahr, 2022).
In modern leadership, flat hierarchy means equality between employees and leaders, where even if not in a leadership position you can take responsibility more easily. It enables open discussions between leaders and employees in daily working life and also in decision-making.
1.2.2. Purpose leading
Because leaders engage their employees more in decision-making, employees feel more involved and committed to the company. Employees find more purpose in their work and it keeps them motivated, especially millennials and Generation Z. In modern leadership, leaders are engaging more with their employee’s everyday life to meet their individual needs and understand them, so they can provide a good working environment and connections with their employees (Rizvi, 2022 & Llopis, 2022).
The modern way of leading with a purpose works most effectively in an environment where workers’ maturity levels are high, their educational level is good, and they have high working ethics and long experience in the work. Their leader is easy to delegate things to the employees and gives them full responsibility to work and develop their ideas and bring innovative solutions into the company. Also, the way is effective when workers’ maturity levels are high, educational level is good, working ethics are not too high, but they have long working experience. Their leader needs to involve the workers in decision making but doesn’t give them full autonomy in their work. These kinds of working environment support modern leadership with a purpose (Uslu 2019).
2. Appreciative Inquiry
In order to unify the working environment and aid the communication across levels, Appreciative Inquiry is used as a method of providing a platform to enhance those skills for stakeholders and improve the company’s operations and wellbeing through collaboration.
Appreciative Inquiry (AI) is an asset-based approach used within modern leadership, which encourages positive organizational change to move towards a shared vision in unison. The method was developed by Cooperrider, Srivastva, Fry et al in the 1980s and the central idea of the approach is to engage stakeholders from various fields to develop a proactive and in-touch action plan on analyzed root causes.
As opposed to a thinking that different factors must be fixed or have stopped working together and are irreparable in order for them to be improved, AI challenges the stakeholders to reframe the questions and look at matters through the lens of improvement and growth, ultimately focusing on strengths and improvement of the organization.
2.1. The Core Principles of AI
The approach of AI stands on four primary principles, which encourage and support the central idea of approach and modern leadership in general.
Words Create Worlds
Originally published by the creator of AI, D. Cooperrider, the principle aims to highlight that the approach works by uniting people across departments to share their thoughts and ideas with one another. The process of AI is collaborative and works by co-creation among a diverse group of people with enriching perspectives.
Inquiry Leads to Change
The second principle focuses on asking re-framed questions that support creative and positive thinking. The idea of the principle is that by asking questions with negative connotations, most of the energy goes into undermining our strengths and ultimately, the worries and blaming will define us. By discussing strengths and opportunities, the AI opens doors to positive and encouraging thinking.
Appreciation Adds Energy.
The third principle encourages to recognize, appreciate and maintain our strengths, which motivates the participants to focus on the positive aspects and add value for the future. Similar practices are also used in sports psychology, where athletes are encouraged to visualize their success to encourage the positive approach and mindset.
The Future is Now
The fourth and final principle emphasizes the outcomes of the approach. By following through the process, the stakeholders have a possibility to feel heard, bond with others through shared experiences, become more motivated to work towards mutually stated goals and positively impact the future outcomes by strengthening the present possibilities.
2.2 The 4-D cycle
In order to best utilize the theory of AI, a handy visual model called a 4D cycle is used. The model was created in 2005 by Cooperrider and Whitney, which illustrates a cycle consisting of four steps: these are the guiding questions used to support the creative and positive development process.
AI is based on discovering what is working, what gives life, what is creating energy and excitement, and then determining how to create value beyond these aspects.
The four steps in the appreciative inquiry cycle are the four D’s of Discovery, Dream, Design and Destiny and with the newest model a 5th D is added: Definition.
Illustration 1. The 5-D Model of Appreciative Inquiry, a modification of the original 4D model presented in “A Positive Revolution in Change: Appreciative Inquiry” (2005) by D. Cooperrider and D. Whitney. Source: Organizing Engagement. Whitneyhttps://organizingengagement.org/models/appreciative-inquiry/
The first step, Define, handles the scope and understanding the focus. As AI ventures deep into the operations and thoughts of the stakeholders on improving the current designs of services, it is of high importance to properly address the project’s purpose, goals and establish a joint understanding of the project to have the best possible outcome and value creation on an appropriate topic.
The second step, Discover, focuses on highlighting the positive aspects of the current situation. The participating stakeholders could use brainstorming as a tool with an aim of appreciating the existing strengths and best practices.
The third step, Dream, refers to the creation and sharing of a vision with the best possible outcome, which would capitalise on existing strengths shared in the previous phase. What possibilities arise from the shared success stories and what could be created through combining the aforementioned strengths?
The fourth step, Design, aims to add a practical dimension to the previous steps to turns the ideas and vision into a reality. In this step, the participants are encouraged to discuss what actions should be implemented to accomplish the best possible outcome that has been ideated in the Dream step?
The final step is Destiny, which has two distinct purposes. In the last phase, the participants are expected to conclude the discussions and present their responsibilities, roles and steps with deadlines to implement an action plan that has been created through understanding the problem and creating a high-quality vision by combining the existing strengths. In addition to this, the stakeholders taking part of the process should also focus on how to sustain and support the created plan.
The 5-D model and AI approach work excellent when teams require (re-)aligning themselves with the vision or when organisational change is in process as the method enables the stakeholders to be heard and share their experiences, which is the primary improvement point in modern leadership. The theory helps participants uncover existing strengths, advantages or opportunities in their communities, organizations or teams through the utilization of questions and dialogue.
In an ideal world, the employees should be able to feel that their purpose exceeds their work and what they are doing is bigger than them, that they are working together on something important and that they are contributing to the improvement of society by creating additional value in their workplace. Such methods achieve a higher probability of better employee retention results in the process.
The work done through AI should be well-acknowledged afterwards and be properly communicated to all the stakeholders in an effective manner.
3. Emotional intelligence
Emotional intelligence (EI) is often described as the skill of evaluating, distinguishing, managing, and establishing emotions in order to let communication between others flow easily and understandably. It has been mentioned that to some extent emotional intelligence can be more valuable than a high IQ when it comes to success. There are a few ways in which one can identify emotional intelligence within a person, which include for example: a person who expresses a basic understanding of what others are feeling, a person who shows self-awareness to their own strengths and weaknesses, a person who acts in an empathetic way both to themselves and others, etc. (Cherry 2022)
Emotional Intelligence is commonly referred to as EQ (emotional quotient) and is an important aspect of a person’s personality, as it is responsible for forming deep and good relationships, for succeeding in studies or in one’s occupation and for living a fulfilling life, achieving one’s own life goals. (Jeanne 2023)
IMAGE 1: 5 components of emotional intelligence. (Goleman, D)
3.1 EQ is often described through four different characteristics:
- Introspection: One’s own ability to recognize internal feelings and how they manifest through thoughts and habits. This includes the recognition of one’s own strengths and weaknesses and having a sense of self-confidence.
- Self-leadership: Referring to one’s ability to manage impulsivity and lead one’s own feelings in a logical and understanding way. It also includes one’s own sense of proactiveness, dedication to responsibilities and adaptiveness to change.
- Self-motivation: This refers to the ability to align one’s feelings with one’s goals. In other words, to create habits that are in alignment with one’s goals / delaying satisfaction, staying ambitious, and using emotions to feed productivity.
- Empathy and relationship management: Referring to a person’s ability to form and keep healthy relationships, to communicate openly, to be influential and inspirational and to work well in a team, including during conflict situations.
- General awareness in social situations: This refers to the person’s ability to embody a sense of empathy towards others and understand the needs of others based on their emotional signs. People who have this characteristic also usually feel in their comfort zone when socializing and understand the dynamics between different groups. (Goleman 2023)
3.2 Emotional Quotient (EQ) vs. Intelligence Quotient (IQ):
There have been many ongoing debates of EQ vs IQ and which one is more important than the other, but at the end of the day, they measure two completely different aspects of a person’s personality and cannot be debated as one or the other. Emotional intelligence (EQ) focuses on managing, evaluating and expressing emotions, whereas Intelligence Quotient (IQ) focuses on measuring intellectuality based on genetics. A person with an increased EQ is known to have more empathy and known to have good personal relationships, whilst maintaining boundaries. They are able to take criticism in the bigger picture, as they are familiar with their own intentions and habits. They are unafraid of taking responsibility when a mistake has been made and unafraid to apologize when it’s needed. They move on from failures effectively.
A person with a high Intelligence Quotient (IQ) on the other hand, has an abnormally good sense of memory and logical reasoning. IQ is fully based on the intelligence of a person and does not include anything related to a person’s emotional side. IQ is something that a person is born with whereas EQ is something that can be learned over time. As mentioned above, there are many ongoing debates about the two, but the most important is to understand how both can be used professionally:
- EQ vs IQ at work: Understanding one’s own IQ and EQ strengths and weaknesses can help when making big life decisions such as choosing a career. Some careers are more suitable for persons with a higher EQ and others are more suitable for those with a higher IQ.
- EQ vs IQ in management styles: a good sense of emotional intelligence seems to benefit the modern day leader much more than a high IQ. Understanding and empathizing with individuals in a team can be used to develop individual strengths that will eventually determine the performance of the team. A high IQ is also highly beneficial in a sense that there is a lot of rationality and reasoning needed in teams especially when making important decisions, this is where a leader with a higher sense of IQ plays an important role in order for the team to perform a task successfully.
- EQ vs IQ in life success as a general concept: Although EQ and IQ are both characteristics that assist in creating a successful life, there is much more to it. It’s all about being driven, curious and determined when it comes to predicting an individual’s success. (Durham 2021)
3.3 Emotional Intelligence in the workplace:
It has been proven countless times that emotional intelligence is something that can be learned and adopted by people if the correct measurements are put into place. Although emotional intelligence is learned on an individual level, there are ways that it can be applied in a way that benefits teams’ overall EQ performance. These measurements are performed on a team level and the following examples can be used as tools to improve EQ within a team: Training programs and sessions, team building activities, self reflection sessions, development of observation skills etc. (Thomas 2022)
3.3.1 Characteristics examples of people with good EQ at work:
- Enhanced listening skills: non-interruptive, gives constructive feedback and supports compassionately where needed.
- Transparent communication: Inviting feedback from coworkers, not fearful of feedback and creates an atmosphere where people feel safe to speak.
- Open to change: shows no resistance to changes, adaptive and flexible and staying optimistic during challenging situations.
Modern leadership differs from traditional leadership by minimizing power distance, leading with a purpose that followers adopt and empathizing with their employee’s needs and feelings. Power distance may be aided in the organization through the adoption of a flat hierarchy, where layers in a company’s organizational chart are kept relatively thin and employees are able to easily switch between leading positions and adapt easily to responsibilities.
Leading with a purpose that followers but also stakeholders adopt can be made happen by utilizing an asset-based approach called Appreciative Inquiry. Their organizations see possibilities instead of problems and are open to changes. In the process of recreating the organization’s framework with the 5D-cycle theory, the organization tries to involve everyone in the making of it. Through this, the additional value and meaning is created and people feel more included in the organization.
Leaders with high emotional intelligence have been seen to have better relationships with their colleagues and employees. As they focus more on relationships and being empathetic that leads individuals and teams to perform better.
Empathy, flat hierarchy, and appreciative inquiry improve communication in an organization and are keys to modern leadership and how it should look like.
Oxford Languages and Google English.
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