Most of today’s leadership literature focuses on the two most popular forms of leadership: the visionary leader—the charismatic transformational leader who inspires, or the relationship leader—the mentor who has the compassion and empathy needed to form strong relationships to support their organization.
But the global business world is changing rapidly, from the top down and the bottom up. Organizations are flatter. Boundaries are more blurred. Information moves faster across all levels within an organization. This means that leaders who can innovate and move quickly—leaders who have dynamic capabilities—are more likely to succeed.
Deborah Ancona, Professor of Organization Studies at MIT Sloan, has spent the last year researching the competitive advantage of dynamic capability leaders. Says Ancona, “The greatest strength of a dynamic capability leader is their ability to filter through all the fast moving information that flows within and outside of the organization, recognize opportunities, and capitalize on them.”
The 4 Capabilities Leadership Framework
As leadership moves away from a “command and control” model to a more “cultivate and coordinate” model, the way that leadership is taught must change, too. Developed over a four-year period and tested in diverse real world settings by Acona, alongside MIT Sloan Professors Tom Malone and Wanda Orlikowski and Senior Lecturer Peter Senge, the 4 Capabilities Leadership Framework (FCF) is a powerful tool for understanding and integrating the four critical components of leadership.
1) Sensing and Seizing: According to Ancona, dynamic capability leaders show higher than average strength in making sense of data in the context in which they are operating. “Sense making” is a heightened form of collecting data from many sources and then mapping it into a productive context. Without this filtering process, data can become overwhelming and inhibit efficiency within an organization. Proctor and Gamble is an example of a company that specifically recruits expert sense-makers. These executives spend more than the average amount of time with customers, traveling to remote locations to connect with them, and digging deep to gain valuable insight into the real-time customer experience of P&G products.
2) Mapping: As mentioned above, an important part of sensing and seizing is the ability to map the data in a way that will give leaders an overall advantage. Mapping the data allows leaders to keep a constant pulse on what is going on both internally with organization dynamics, as well as externally, keeping a real-time log of customer experience.
3) Framework and flow: In China, many international industrial companies have made the mistake of assuming that their competition for market share was the standard list of competitors. They failed to reexamine their old framework of what defines their competition in time to gain valuable insights into the true source of competition—new, local Chinese companies. Dynamic capability leaders are able to let go of old frameworks and assumptions that block their insight in order to stay open to new information. “It’s a lot easier said than done to convince leadership to operate from a new framework, when they are holding on to a perspective that served them well in the past,” says Ancona.
4) Inventing: New leadership means using the information that is gathered and inventing something new to benefit the customer experience. These leaders show strength in creating the structure and processes needed to move toward the vision of the organization or individual team. Zipcar leaders, for example, found a way to invent a new business model that shook up the rental car market. Amazon is another great example of a company whose leaders consistently stayed open to new information regarding the customer experience, using it to innovate a new kind of retail service tailored to the customer.
The most successful leaders of the future will be those who can seize relevant information and use it to take advantage of new opportunities. In an age where information is king and change is the only constant, dynamic capabilities are skill sets leaders must hone to gain the advantage in a competitive market.
Deborah Ancona, Professor of Organization Studies and Faculty Director of the MIT Leadership Center, teaches in Transforming Your Leadership Strategy and the Advanced Management Program at MIT Sloan Executive Education.