The Leadership Experience in 21st Century - Research Paper Example

 The Leadership Experience in 21st Century Section 1: Literature Review According to the authors Hanna, Hanna and Latchem (2013), leadership means the act of leading or guiding people for the growth and development of the organization. Implementation of effective leadership style contributes in the fulfillment of goals and objectives of the firm. In the modern business environment, the processes and functions of the companies are changing rapidly. The leaders play vital roles in influencing and motivating employees for adopting those changes and deliver their best performance. The development of modern technologies accelerates the changing process of the business environment. In the 21st century, the leaders need to have huge knowledge about various technologies which can enhance the growth of the firm. The activities and functions of the companies have become fast, flexible and also complex. The leaders are responsible in managing those activities properly and guiding the organizational members efficiently. Motivational factors are different for every employee. It is one of the vital challenges for the leaders in identifying the motivational factors which would motivate the employees for delivering their best performance. The organizations are focusing more on their productivity and performance. Therefore, the leaders are responsible for providing training to the employees so that they can contribute in the development of the firm. In many cases it has been observed that internal crisis of the company can create problems for the leaders. If the activities and functions of the firm are not managed properly then the leaders face problems in achieving the objectives of the company. Lack of proper management creates dissatisfaction among the employees. The organizational leaders are responsible in managing the de-motivated employees. In various instances it has been observed that the employees do want to co-operate with the leaders because they are not satisfied with the company. In such situations, the leaders need to communicate with the staffs properly. By this process the leaders try to improve the relationship of the employees with the company (Hanna, Hanna & Latchem, 2013). As per the author Drucker (2007), in 21st century the organizational leaders act as a mediator between the managers and the employees. They contribute in building strong relationship with organizational members. The leaders need to perform wide range of responsibilities and duties for facilitating the business in holding their position in the competitive market. Most of the decisions of an organization are taken by its management team. The leaders need to communicate the decisions properly to the employees and take their feedbacks. Ineffective communication of company’s decision affects its productivity and employees performances. The leaders are responsible for managing these issues. They use advanced technologies for making the employees aware of the activities and functions of the firm. In the modern business environment, employees are focusing more on the flexible rules and benefits which the companies are offering to them. Therefore, it has become a vital challenge for the leader to understand what flexible rules and benefits will help the firm to retain its employees and increase its productivity. In the present scenario, staffs tend to leave their jobs frequently if they are not satisfied with the organization. Lack of skilled labor hampers the growth of the company. The leaders of 21st century develop strategies for retaining organizational members (Drucker, 2007). Leadership Challenges in 21st Century Leadership in today’s business environment offers no safe haven for traditional leadership theory believers and followers. Static principles and way of thinking is being fast replaced by innovation, growth and development of information technology. In the world of 21st century, the internet plays a very important role in formulating strategic and operational framework of the organization. The bursting of internet bubble has created vast opportunities for small companies that operate in financial services industry. However, careless adoption of technology could create negative impact on the firm. It is a very challenging task for a small financial services company to operate profitably in contemporary business environment and remain sustainable in the long-term. Small organizations have to face significant pressure to device their strategic, tactical, operational processes such that they are able to provide financial products and services at minimum cost and maximum efficiency. The internet has evolved as a technological boon for the financial services firms that aspire to reach domestic and global customers. Traditionally, the reach of small financial services firms was limited to regional offices and district zones. During the early 19th and 20th century, managers and leaders of the firm mainly focused leadership traits, behaviors and relationships with external and internal stakeholders. The internet bubble burst has changed the entire paradigm and role of leadership in today’s business environment. Interaction between the firms and the customers are now more influenced by adaptation of modern technology which in the past primarily relied on fact to face interaction. Also, the free flow of information is not limited to business agents in contemporary business environment. This is mainly because customers can get access to latest financial products and services very easily with the help of internet. Some studies also reveal that financial products and services such as general insurance, mutual funds, life insurance, time deposits, and currency exchange, e-payment, and so on can be provided to customers more easily with the help of internet rather than traditional sales and marketing. Although, financial products and services of a small firm can be provided to customers easily, there are considerable leadership challenges that the firms of 21st century could face from high-tech competition. Studies reveal that information technology is becoming a smart means of improving operations and processes of the business. Hence, most of the organizations have employed several high-tech business models and policies to enhance and improve their existing processes through utilization of information technology. But incorporating latest information technology into business model of small financial services firms could potentially create significant challenges in terms of management of logistics, supply chain and leadership experience. It is very important for small financial services firms to reduce their cost of operations and utilize human and financial resources very reasonably because the small companies lack ample capital funds. One feasible alternative to traditional business processes is adoption of technology that will reduce cost and improve customer services. But change of business strategies and modern processes in line with modern way of thinking are bound to differentiate the leaders of 20th century from the leaders of 21st century. There are many leadership challenges that the small financial services firm could face and some of the key challenges are discussed as follows: The Foundation – The mission and vision of the financial services firm should be transparent and aligned to sustain long term growth of business. The key aspect to achieve long term growth is establishment of strong relationship with external stakeholders, specifically the customers of the firm. If the foundations of the firm are unstable then it is more likely that the leaders of the firm are not competent enough to adapt themselves with modern way of thinking. Hence, it is very important for 21st century leaders to clearly articulate their purpose and directions so as to achieve the target or expected outcomes. Studies reveal that some of the greatest leaders always stand up for a little bigger than themselves. Great leaders are not driven by profit making motives and they are faithful to themselves and others. The Business Model – Historical business models of small financial services firms were mainly based on direct interaction of marketing teams with the clients in communicating products and services. Relationships with the customers were built on “word of mouth” and the ability of the team to convince clients about the pros and cons of products or services. Hence, the leaders of the 20th century followed static business models. However, the world of 21st century has drastically changed such concepts as there is opportunity for the firms to reach global customers very easily via information technology and internet. With the advancement of technology distribution and delivery strategies have also changed. Contemporary leaders need to focus more customer services and service delivery management. It is true that business models could vary widely depending on business environment but considering the high-tech competition of today’s world, it would be wise for the firms to align their business model on the basis of their achieving long term goals of the firm. The Information Flow – It is important for financial services firms to gather data regarding feasibility and profitability of the business. A proper market research could help the modern leaders of the company to take important decisions relating to new product launch, market positioning, strategic growth, market development, market segmentation, and so on. With the help of information technology and internet all such information can be made available to contemporary leaders in least time. But there is a challenge regarding credibility and reliability of data. There can be many bias and agendas to free flow of information that can significantly affect the information quality. The leaders of the 21st century have an additional responsibility of assessing the quality of data and information so that they can take better decisions for the firm. Managing Customers Expectations – The internet is the biggest database in the world that provides all sort of information to the users. Generally, when information is easily available people tend to compare and contrast on key aspects like price sensitivity, after sale customer service, number of complaints or cases filed (in relation to small financial services firms), and other product specific objectives. The contemporary leaders need to be well informed all the time which could otherwise create challenges and hurdles in path of company’s growth. The internet will provide the small firm both new customers as well as other relevant data discussed earlier. However, the volume of information available in the World Wide Web is almost infinite and thus leaders will have to very careful in analyzing the required data. The Social Media – The data and findings reveal that small financial services firms that used to follow traditional business models will get strategic advantages by incorporating social media in their business model. By leveraging the concept of social media, contemporary businesses will be able to differentiate themselves from the rest of the competitors in the market. This factor is very important because the level of high-tech completion in the 21st century has increased significantly due to the bursting of internet bubble. Social media will provide a seamless platform to create a presence in the consumer market. If the concept of social media is properly utilized by the contemporary leaders then it will be able to attract more customers. The main challenge is to retain customers in the long term and build strong relations using internet. Needless to say that the scope of social media is expanding exponentially and it will only get bigger with time. It is advised that contemporary leaders offer their financial products and services through the social media platforms like Facebook, Twitter, LinkedIn, and YouTube. Otherwise, the small financial firms will not be able to sustain in the market. Flexible Work Times – The evolution of internet has shadowed traditional concept of ‘fixed timings’. In the past, the teams and their leaders mainly approached clients through phone calls and there after fix appointments with the clients. This concept has changed as the internet enables 24 x 7 services to all customers and it is very important for the leaders of small financial services firms to be proactive in this regard. The main challenge for modern leaders is to justify the salary of employees when their desks and offices remain unused half of the time. It the firm follows fixed timings then its services would be affected. One solution to this leadership challenge is to build teams that will work on shifts. Naturally, the team leaders will also have to work in shifts which will increase chances of better customer service. The Talent – Historically, it has been believed by many leaders that everything may be compromised except talent. If the 21st century leaders does not settle for anything short of deploying, acquiring, developing, and retaining talents, then it will lead to greatest challenge of the, sustainability in long term. If the best human resources are not guided properly it is likely that the small financial services firm will not achieve its targets. Hence, leadership development should be one of the key focuses of the contemporary leaders in today’s competitive business environment. Historical and Modern Perspective on Leadership Historical perspective of leadership is different from the present trends of leaders. Earlier a leader used to give orders to his subordinates for performing certain jobs or functions. They interacted with the managers and developed strategies with them for the growth and development of the company. The subordinates of the leaders did not participate in the decision making process of the organization. The leaders imposed their power and authority over the subordinates and make them work according to the rules and regulations of the company. Certain tasks were given to the employees and they performed the tasks as per the guidelines. At that time autocratic leadership style was highly popular in organizations. The leaders had huge powers and they controlled the activities of the employees. Development and implementation of plans were done by the leaders without taking any suggestion from their subordinates. The companies used to believe in the trait theory of leadership. As per this theory, the leaders are born not made. The skills and qualities of the leaders are inborn. No other person can develop those qualities. For this reason, the firms had selective number of leaders and they were responsible for performing various functions and activities. Gradually with the change of business environment, different other leadership styles and theories were developed. The organizations incorporated those styles and theories for the achieving their objectives. The modern concept of leadership believes in the participation of the employees in various processes and functions of the firm. In the present times, the leaders support and guide the organizational members for improving their performance. It is considered as one of the important responsibility of the leader. Employees are perceived as a significant asset of the firm. Their decisions and opinions are important for achieving the targets of the company. The leaders interact frequently with them for developing effective strategies and policies. As per the modern perspective of leadership, enhancement of skills and qualities of an employee can facilitate him in becoming a leader. Therefore companies give effective training to their employees for improving their leadership skills. Most of the organizations have large number of leaders who continuously guide the staffs for performing their tasks properly. The leaders are perceived as facilitators who contribute in developing strong relationship with the company and its employees. In the modern business environment, firms perform team or group work. The leaders coordinate the team members and show them appropriate ways for achieving the objectives of the team. The leaders tend to follow participative leadership style for increasing the involvement of the employees in different processes and functions of the organization. They believe that company should change its rules and regulations for adapting itself in the changing business environment. Section 2: World View It is very important for the financial services company to understand the meaning of leadership. A good leader will motivate and inspire towards greatness and strong foundations of the company will establish the principles of the leadership. The financial services industry is highly regulated and thus it is important for the firm to adapt modern technologies ‘ethically’. Any profit driven ideologies could encourage the leaders to employ unfair trade practices leading to diminish of trust between internal and external stakeholders and also consequent fall of reputation in the market. Great leaders like Warren Buffet always had a knack for investment and such leaders are clear about their goals and objectives. The point to be noted here is that contemporary leaders should think beyond outputs and plan continuously search for better ways to explore new opportunities. The advancement of technology could provide new doorways for the financial services firm in reaching global customers. One way to reach customers globally is through social media and internet. But, there are some key challenges that the financial services firm could face while integrating social media in their corporate practices. For example, the firm must maintain a high standard of ethical and social responsibility. Unfair and non-transparent business model will only create hurdles for the firm. The employees of the firm should be recognized as assets that assist in building strong relationships with the customers. Hence, the leasers will be able to communicate organizational policies and strategies only if there is a two-way communication between employees and leaders. Adaptation to modern technologies is a continuous developmental process that requires employee motivation, training and improving existing business processes, all aimed at achieving the goals and objectives of the firm. From the global perspective, it is also important for the firm to follow a participative leadership approach that will involve employees at all level. In this leadership model every staff of the financial services firm will be involved in decision making process. They will definitely feel proud and responsible for their own course of actions. It will also create pseudo accountability among the employees to sell financial products to customers without falsifying or concealing important facts. It is important to mention here that the concept of outsourcing, internet and information technology holds the potential to make the company global at some point of time. The leaders of the firm should adapt themselves to ever changing rules and regulations of every country in which they operate. This implies that the firm would also have to consider organizational culture and diversity very carefully in planning the business model. Inclusion of culture in contemporary leadership increases its challenges significantly because it is a dynamic aspect that is a twin-edged sword. Sometimes cultural diversity from world point of view can be in the favor of the firm or against it. Hence the leadership experience that constantly adapt to both changing technology and culture will be able to survive in today’s highly competitive markets (Daft, 2014). References Daft, R. (2014). The Leadership Experience. Boston, Massachusetts, United States: Cengage Learning. Drucker, P. F. (2007). Management challenges for the 21st century. New York: Routledge. Hanna, D., Hanna, D., & Latchem, C. (2013). Leadership for 21st Century Learning: Global Perspectives from International Experts. London: Routledge. Read More