By Danna Greenberg, Kate McKone-Sweet, & H. James Wilson
In recent years, leaders are finding themselves managing through historic levels of complexity. This complexity stems from a diverse set of environmental shifts. There are the continuous increases in globalization and outsourcing. Ongoingtechnological changes demand leaders to consider the impact of virtual communication and social media on all aspects of their organizations. The scrutiny brought on by the recent financial crises and the demands for better stewardship of our planet is requiring leaders to rethink why and how they build their organizations. Finally, the changing demographic landscape means that leaders andorganizations must find ways to create economic opportunities for a rapidly growing population in developing areas of the world. Demographic change in the developed regions also brings a distinct set of challenges; for instance, in North America, organizations must motivate and engage the millennial generation who will face greater uncertainty in their careers than that of their parents.
When amassed,these contextual changes mean that today’s business environments aren’t simply uncertain, they are unknowable. In uncertain situations, leaders can still rely on their analysis of the past or available data to make appropriate decisions for the future. Yet in an unknowable world, neither past experience nor data offer much reliable insight into the future. When the situation is characterized byunprecedented levels of complexity and uncertainty, analytic calculations become nothing more than guesses as they are often based on inaccurate assumptions around controlling the future (Schlesinger & Keifer 2010). While leaders can use numbers and historical information to guide decisions in an uncertain environment, the only way to lead in an unknowable environment is through action.
Tosuccessfully lead in both uncertain and unknowable situations, we need leaders who rely upon a fundamentally different rationale for the existence of business and are leveraging a different logic of business decision making. Profit maximization and shareholder value creation, long considered an adequate basis for businesses, are no longer sufficient. Maximizing the common good and minimizing socialinjustice and environmental impact is the order of the day. Similarly, the logic of business decision making that emphasizes prediction and analytics as the way to handle “uncertainty” must come to grips with how to discern and respond to “unknowability” as well. In our recent survey of more than 1,000 global organizations, we found that leaders are not simply trying to “analyze their way out” ofuncertainty through traditional predictive, quantitative models; rather they are “acting their way out” by behaving like startup entrepreneurs and redefining the context (Wilson & Eisenman, 2010). In the future, we will need leaders who can shape and make opportunity amidst social and economic unknowability.
We refer to this conceptualization of leadership as entrepreneurial leadership.Through an understanding of themselves and the contexts in which they work, entrepreneurial leaders act on and shape opportunities that create value for their organizations, their stakeholders, and the wider society. Entrepreneurial leaders are undiscouraged by a lack of resources or conditions of unknowability as they experiment with new solutions to old problems. These individuals do not cynically orlethargically resign themselves to the problems of the world. Rather through a combination of self-reflection and resourcefulness, they find ways to inspire and lead others in taking on seemingly intractable problems. Perhaps most importantly, entrepreneurial leaders are needed in spaces far beyond the traditional boundaries of business organizations and the discipline of entrepreneurship....