The Shift from Institutional to Societal Leadership

Editor’s Note: Oliver DeMille was recently featured on the cover of Leadership Excellence magazine, with an article on his upcoming book with Orrin Woodward, LeaderShift. Here is his article in its entirety. Download the PDF version of the complete magazine here.

Once in a while in history, a LeaderShift occurs. It usually comes unexpectedly, and it transforms the world for at least a generation.

A LeaderShift is a basic change in who the top leaders are in society. Since leadership is so vital to any society’s success, such a change has huge impact on business, politics, family, industry and other facets of life.

Past LeaderShifts include:

• The switch from kings and chiefs to community fathers such as doctors, lawyers and town merchants.
• The 1880-1920’s transition from city fathers to titans of industry, like Carnegie, Morgan and Rockefeller.
• The 1940-1970’s shift from business tycoons to managers, spurred by the work of Edward Deming and innovators like Jack Welch and Sam Walton.
• The 1980-1990’s transition from managers to leaders, influenced by sages like Buckminster Fuller, Earl Nightingale and Jim Collins.

Today, we’re in the early stages of another great transition: a shift not from management to leadership, but from institutional leadership to societal leadership.

The most effective leaders in the years ahead will look beyond the success of their organization and innovate ways for their company to effectively address the needs of society.

In this shift, business leaders are becoming the key social leaders. As governments continue to mismanage and overspend, the rise of business leaders as social entrepreneurs will accelerate. The top leaders in society will be executives who utilize the unique efficiencies and competencies of their company to look beyond profits and restore a failing society.

This isn’t to say that profit will become less important; in fact, as governments struggle, private-sector success will be more critical — business leaders will seek both financial success and societal impact.

Just as the American model of free enterprise drove the Soviet system of totalitarian controls into the dustbin of history, the market approach of business leaders is distinguishing itself as the respectable and effective alternative to the top-down leadership practices of government finance, dis-innovation and dysfunctional bureaucracy.

In short, Washington isn’t going to fix our problems. As society continues to decline it is increasingly turning to business leaders for help.

Those who innovate in this trend will become the future leaders, and business leaders who don’t fill this role will see their careers and companies fall behind (like those who stay stuck in management and refuse to embrace leadership principles).

Forward-thinking executives and entrepreneurs can prepare for the challenges of this transition. Currently, the 5 Laws of Decline, as articulated by Orrin Woodward, are quietly undermining businesses and governments. Leaders can recognize these laws of decline — and effectively deal with them.

A dual leadership system has dominated our society, with the competing management of the economy and politics by an uneasy and unofficial partnership between government leaders and business leaders. This system is the first great casualty of the current LeaderShift, which is why our political institutions seem increasingly divided and divisive.

Due to the LeaderShift, this dysfunction in our governments will only escalate. Society will look to business leaders to fix things far beyond the traditional boardroom. The Bottom Line will be replaced by the Directional Line, measuring which direction each community, state, province and nation is headed and how this drives market success (or decline).

Leaders and boards that ignore the Directional Line do so at their institutional peril.

Perhaps the most powerful force of the LeaderShift is the rise of a consumer populace that expects its companies and their leaders to take the initiative and exert leadership in the face of societal challenges. As this trend swells, it will revolutionize the future of leadership.

These two roles — business leader and social innovator — are increasingly intertwined in ways that few companies (or leaders) are prepared to deal with.

Are you ready for the LeaderShift? Is your family, career, and company?