Leadership style and growth

There are a number of factors that impact growth of an organization, but the most important factor is undoubtedly, leadership style. All other factors like strategy, capabilities, resources etc. are under the direct influence and consequence of leadership style.

Growth in organizations can be of three types; incremental from existing business, new growth from existing capabilities in new markets or new capabilities in existing markets, breakthrough performance arising from innovation driven by acquisition or technology breakthrough. Each of these types of growth require different types of leadership behavior and styles.

While there are many models of leadership styles, I find the 5 styles of leadership defined by Loewe, Williamson and Wood (2001), to be very useful when describing leadership styles focused on growth and innovation. They identified five leadership styles that drive innovation and growth; the cauldron, spiral staircase, fertile field, pac man and explorer.

The type of leadership style appropriate for a growth situation can be identified based on which of the three situations the organization faces;

a. Exploring known capabilities, assets and markets

b. Exploring with atleast one of the knowns – capabilities, assets and markets

c. Exploring new capabilities, assets and markets

Exploring known capacities, assets and markets require the use of Spiral staircase leadership style. In this model, leaders engage their teams in innovating continuously, even if incremental, but so often that the organization is able to dramatically change over a period of time. The key to success is an environment where employees are free to experiment with existing capabilities and assets to generate new knowledge and insights for enhancing and expanding existing offers. This is a demanding style, where leaders need to set vision, engage their teams and coach them, who then have to repeat the process with their teams. Such a systematic organization wide process enables dramatic, but dependable growth for the organization.

When exploring adjacencies to generate new disruptive offerings in existing markets or creating disruptive models in new markets with existing capabilities, organizations are seen to utilize the cauldron or fertile field leadership style, in addition to spiral staircase. The focus of the organizations tends to be growing quickly leveraging the existing.

The Cauldron leadership style is an entrepreneurial and demanding leadership style, where the leaders engage the entrepreneurial capacity of the organization. They do so by engaging the management team, using them as catalyst to challenge the status quo in the organization. These leaders rethink business models and rapidly develop newer ones to drive change very quickly in a short time in the organization. This type of leadership helps organization grow very fast into adjacencies.

The fertile field leadership style is a model in which leaders explore new horizons beyond existing operations with existing capabilities. This is dependent on managers figuring out new ways to utilize capabilities and exploring wider field. Unlike the cauldron and spiral staircase, this style requires the use of the elite teams within the organizations, the experts anthropologists, the problem solvers and the technology specialists.

However, if you are exploring new capabilities, assets and markets, it takes longer effort (though longer might mean different timeline in different industries). The Pacman leadership style effectively uses external environment to drive development of technologies and acquisition of new capabilities through mergers or strategic investments. Pacman leaders are very effective at forecasting future needs, both technological and user needs, making shrewd bets on emerging startups and integrating them within their organization.

The explorer style of leaders are good at dreaming with their eyes open, capable of imagining a future that is not apparent to most and making investments into futuristic developments. They are able to enroll and engage brilliant minds to their purpose and are able to make bets that are focused on things that aren’t important today, but has potential to create growth in medium and long term.

As an organization you will want multiple leadership styles. You will probably be focused on not one type of growth, but will be driving incremental growth in existing market, dis growth in adjacencies as well us disruptive innovation all at the same time. This means that you have to practice multiple leadership styles or have different members of the leadership team empowered and practicing different styles. Both aren’t easy tasks.

Are you ready as a leader to drive growth and is your leadership style suited for it?

DM me to discuss the topic further.

Krishnan Naganathan

Krishnan is a leading innovation consultant and focuses on helping people and organizations innovate and build capabilities for innovation. He brings over 25 years of experience in the industry and consulting. You can reach him by phone / WhatsApp: +919791033967 or email: krishnan@thinkhorizonconsulting.com