New "Ecological" leadership: What Management Concept Will Help Us Overcome the Crisis?

In today’s crisis situation, the subject of new leadership has taken on special relevance. An analysis of companies’ and businesses’ current situations shows that old approaches will cease working in large part because people communicate through virtual means.

But this is not the only reason why leadership is changing — there are other objective factors, too. The SIGNAL insights consulting agency and MADS creative school will share the story of the theoretical and practical foundations of this new approach to management.

THEORY U is one of the most hotly discussed contemporary leadership theories, according to Signal expert Olga Bochkareva. The minds behind the theory are scientists at the Massachusetts Institute of Technology, who have been collecting materials in Silicon Valley for more than 20 years. As part of their research, they worked with startups and studied the experience of about 200 tech companies that operated (and continue to do so to this day) in conditions of extreme uncertainty. Leaders in these businesses frequently have to predict trends, create a fundamentally new project and penetrate a market that doesn’t even exist yet. This theory explains how a contemporary leader can solve this ambitious task.

The theory is called “U” because its framework resembles the letter U. The first point is information gathering, which allows a leader to formulate their own vision of a given situation, product, market or industry. After this, they share their ideas with each member of the team, collecting feedback along the way. Then they immerse themselves deep in a process of reflection, which theoretically occupies up to 40% of their time at work. Having asked themselves the right questions from various different points of view — including “my future self, giving myself advice in the present — the leader finds all the answers they need, and only then returns to their team with proposals and projects.

Theory U distinguishes four types of systems and the leadership inherent to them, but in the context of the current economic crisis, two are of paramount importance: “Ego” and “Eco.” The former is authoritarian leadership, with centralized management and hierarchical structures, and prevails in Russian business. The opposite type is an “ecosystem”: collective leadership in a collaborative system, which leads to at least creative equality, if not total equality altogether.

An ecosystem should not be confused with a company’s “ecology,” which traditionally assumes a simple friendly atmosphere. Just like a natural ecosystem relies on a diverse collection of organisms to survive, including animals, plants, fungus, bacteria and more, a human organization needs a diverse group of people with its own positions to address different needs. For a leader, the most important quality in this system is the ability to acknowledge that their business doesn’t only need those people who share their values, but also those who take the opposite position. The task of an eco-leader is to unite professionals with different views and approaches, and make sure that each of their functions in the company can become collaborative, not toxic.

Nowadays, we can see a serious leadership crisis on all levels, from governments to corporations. Autocratic leadership raises more and more questions, while the new, ecological form of leadership has not yet acquired the optimum form to be able to respond to the challenges of the crisis period.

For a long time, an outdated model of business leadership prevailed in Western European and North American corporate practice: tenacious, authoritarian and with a dictatorial flair. Such leadership was symbolized by men like Lee Iacocca, the legendary executive vice-president at the Ford Motor Company and General Motors.

A great deal is changing now, but there are still few examples of new leadership. Elon Musk, the head of Tesla and SpaceX; Jimmy Wales, the ideologue behind Wikipedia; Joe Gebbia, the founder of Airbnb; Alex Ljung, the founder of SoundCloud; and many others—are they really creating a new mold of leadership? In studying their leadership styles through the lens of Theory U, it turns that they have all made great strides along the path of new leadership, but not a single one has created a true ecosystem.

In a time of crisis, it is difficult to make the transition from an egosystem to an ecosystem. The crisis does not permit companies to abandon those principles like “higher, faster and stronger.” The solution to such a problem can be found in the theory of leadership in General Stanley McChrystal’s book. In his best-selling “Team of Teams,” General McChrystal tells about his experiencing as Special Forces commander in Afghanistan, where he was able to turn Army bureaucracy and external, chaotic surveillance into a unified ecosystem. For many business leaders in Silicon Valley, McChrystal’s work has become a handbook.

In business, the “team of teams” works as follows: first and foremost is not centralized leadership, but its separate component teams, with all of their different functions and a high level of freedom — all of whom are connected with the leader through a loose hierarchy and a minimum of bureaucracy processes. What’s important is not the specific methodology of business processes that these teams use to carry out the tasks assigned to them; what’s important is the overall positive result.

It is considered by many that an autocratic style of leadership is required in times of crisis. On the other hand, the popularity of new leadership with more human oriented characteristics is rising. It is challenging to support eco-leadership ideas exclusively and abandon old styles of leadership entirely. Theory U, combined with the “team of teams” approach and contemporary conscious leadership practices, can help companies overcome deal with the economic results the consequences of the pandemic more efficiently over the long term.

The creator of the Creating Leading course at MADS, Maria Tiunova, and the school’s co-founder, Arina Avdeeva call this new leadership creating leading: a unique kind of leadership in which every leader creates for themselves based on the values and practices that suit them. Creative or conscious leadership is practiced by participants in the Creating Leading course, including representatives from tech companies like Yandex, Miro, Wargaming, Group and Rambler Group; the founders and leaders of creative agencies and production companies; and people who hold top positions in the marketing sector. However, this trend has also yet to become popular.

DECONSTRUCTING DISCOURSES. Leadership is formed by numerous factors, from one’s personal surrounding in childhood to the political situation in your country. Today we see the rise of other leadership concepts entirely. When all of these ideas are influencing people at once, it becomes even harder to meet all expectations simultaneously. We have to choose only those strategies that suit a particular person to help them understand their purpose and mission.

DEFINING VALUES. They help us survive and get our bearings, no matter when and where we’re living. It’s important to trace the connections between the sources of a person’s strengths, their skills, their ambitions and their dreams. For example, many leaders took cues from Brené Brown’s Dare to Lead, which reflects the popular concept of values-based leadership. It also shares the stories of how contemporary leadership can be vulnerable and fight against outdated ideas that leaders must distance themselves and should not talk about their feelings.

SELECTING PRACTICES. Sometimes a lack of role models from childhood, youth and early career periods means that a person may want to practice new leadership, but doesn’t understand how to do so in a non-ecological environment. Targeted, deep work with values and practices can help these intangibles become truly powerful guidelines.

Work in the immediate influence zone. Unlike the “mentor from the future” concept, which proposes sudden breakthroughs and an enormous leap of faith, the immediate influence zone allows a leader to act progressively. This idea, which first appeared in practice thanks to Soviet psychologic Lev Vygotsky, is used today in adult education. The immediate influence zone in leadership is the distance between confident know-how and those skills that a person can master with the help of their experience and community support.

Every leader needs their own creative path, even in harsh, authoritarian leadership. The most important thing is that it suits the specific leader and their surroundings.

THE FIRST CHALLENGE is when values have yet to be determines. Society is currently experiencing one of the most complicated situations seen by humanity in recent years. Leaders who initially failed to define their values are now losing their bearings, while those who base their leadership on values feel fairly sure of themselves. There is a belief that this present crisis is not the best time to try new things; innovation should be put to the side and actions befitting this emergency situation should be taken. However, the opposite might be true: now may be the very best time to start focusing on one’s values, as they will help us move forward.

THE SECOND CHALLENGE is when practices have yet to be defined or implemented. A person may well have found their values, but cannot put them into practice due to a lack of role models or a suitable environment.

THE THIRD CHALLENGE is in a person’s inability to incorporate values into their life to an extended period of stress, combined with unexplored personal traumas. All different kinds of situations arise: some experience an increase in workload, while others try to gather the pieces of a failed business. In this case, it is recommended to turn to special workshops and master classes to relieve stress through work with a psychologist, physical exercises or consciousness work. It is extremely important to work with your present state, and it must take priority. If you have to choose between eating well and going to therapy, it’s better to go to a therapist — especially since their services are now available online.

This means that in order to avoid challenges, a new leader has to first deal with stress, then determine their values, and only then choose and implement practices in their immediate influence zone.

1. PLAN MODESTLY. Nobody knows what the world will look like after COVID-19. The furthest possible horizon for planning right now is 3-6 months. If you are a leader, don’t try to answer all the questions before you at once. Every new day will bring new information, and a leader’s strength lies in their ability to learn and interpret data every day.

2. SYNCHRONIZE. All theories tackle the subject of a conscious approach to yourself, your family and your teams. Synchronization helps you to determine just how well you understand the present situation. It might be that you’re more pessimistic, while your family and your team have a more optimistic view on the future — or vice versa. Only after synchronization can you all move further.

3. ASK QUESTIONS. During a crisis, you first must turn to your inner resources, asking yourself at least three questions for a leader. Theory U assumes that a conscious leader will spend at least one day on this exercise.

Imagine that your future self is speaking to you right now. You already know what the coronavirus has done to the world and its economic consequences. If you had had this information 3–6 months ago, what would you have done differently? Maybe you made a big mistake by signing too many contracts with new suppliers, or spent too much money on business travel.
What did you personally do quickly and accurately when you found out about the crisis, maybe with an intuitive sense of change? Maybe by moving some of your purchasing contracts, you saved a part of your business. Maybe you backed up your sales by creating new online channels or marketplaces.
What part of your business or life can already be transformed to meet your needs during the crisis right now? This is the most important question of the three. There are no clear examples of answers here: only you can answer them personally.

New theories of leadership and an ecological approach are finding more and more support right now. In the near future, we will see more and more HR and IT professionals, who are demonstrating a high level of management empathy and elements of conscious leadership right now during the crisis, in top management or even CEO positions within global corporate giants. We will also see “LEGO leaders”, who construct their own personal leadership style with building blocks of creating leading theories and practices, and simultaneously make progress in their immediate influence zone and long-term investments in themselves and their team by treating their inner resources with support and care — all in order to come out of this crisis alive and well.