There are two intertwined revolutions at play: a digital one and globalization. At first, the digital one mostly reduced the costs of communication and enabled faster reaction to price differentials, besides the ability to manage across greater distances.
Consequently, management became more global, this increased trade, foreign direct investment and migrations. In turn, these brought up rekindled nationalisms and associated populism bursts everywhere. Those are the real side products of the revolution. Yet, there is another dimension to it all: change is becoming faster, and by encompassing different people, more difficult to lead.
The concomitant revolutions, digital and globalization, has forced organizations to be mindful of new demands. Now we need more flexible structures; capable of responding faster to integrate the new diversity of opportunities and aspirations.
Breakdown of hierarchical organizational structures
The organizational response to faster speed was flatter organization charts. There was also a strong empowerment of people closer to customers, now able to take initiatives and respond more quickly to demands. More compact organizations have also resulted from better quality and lower cost of digitizing communications, including international ones. At the same time, organizations began to favor shorter deadlines, long careers in organizations were replaced by shorter careers in more companies, and giving rise to employees called swallows because they migrate.
The greater focus on consumer interest and attention to alternatives have produced employees who are more attentive and quick to offer answers. Yet, this deepened empowerment is a challenge to building organizational alignment, requiring greater effort in coordinating different initiatives.
Scalability, much sought by investment funds, presents new challenges for leadership, such as overcoming the initially constrained circle of entrepreneurial trust. Increased scalability also adds to the challenge of managing geographically dispersed teams, also differing on trust levels. Dispersed teams over several time zones might even require asynchronous communication, to be mediated by charisma-deprecating computing systems.
The diminishing role of charisma in the leadership of virtual teams could be counteracted by distributing leadership in the groups, thus adding to the current trend towards decentralization and empowerment. Populism is a primitive response to tribal oriented-behaviour, but it is one that business leadership must learn to contend with. Populism expresses the longing for protection among those people who see themselves as vulnerable, and who are willing to exchange loyalty for protection. Employees may see themselves as vulnerable under so much change, particularly the older ones, under the looming widespread adoption of Artificial Intelligence.
Language barriers in a global world
Though frequently neglected, there remains the problem of the language of communication in teams, virtual or not. Because fluency in any foreign language is expensive, it significantly restricts the availability and selection of team members, particularly when virtual; at least until effective simultaneous interpretation systems are disseminated. Leaders have shortcut the recruiting restriction by hiring and promoting those fluent in English, at the expense of limiting the permeability of their organizations. In fact, most of the current longest living corporations have lasted ten to twenty times less than the Roman Empire or the Catholic Church.
Populisn is a primitive response to tribal-oriented behavior, but it is one that business leadership must learn to contend with.
Need for new skills from the leadership
The new scenario demands new skills from the leader. Traditional elements of leadership, such as knowledge derived from experience, will lose ground for skills that are essential to interpersonal relationships: perception of attitudes and behaviors that promote shared goals that foster engagement in teams.
New leaders will need to be more influencers than bosses were. Influencers sprout daily in collaborative environments such as LinkedIn, YouTube, Facebook and others. They are individuals without command positions but with high impact perspectives and a large following. Even within companies, the growing availability of communications network analytics makes it possible to identify who are the main opinion makers, and often have not been bosses.
It is in this sense that the term e-leadership is emerging, a process of influencing riding on digital technologies that can still produce changes in performance-oriented attitudes and behavior, providing populism does not take over business management as well, a risk all to present, giving the current old-boy-network-based leadership of so many corporations.
Future of leadership
The theory of e-leadership has yet to be developed, just as a "business model" needs to be developed to reward influencers, in open networks or in corporations.
New leaders should still be mindful of cultural relationship styles. Ethnic, gender and religious discriminatory practices will still hide behind the digital curtain and may hinder the full realization of the new potential for leadership in bridging gaps.