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The profound challenges facing the private, public and voluntary sectors alike suggest that the future of leadership will no longer necessarily be defined by a formal position or title; rather, leadership is how one experiences oneself and how others experience us as individuals (Quinn, 2005).
A study conducted by the Management Research Group (Nadaff, 2005) has shown a direct correlation between keen understanding of one’s essential self and leadership effectiveness. They affirm that leadership success can be tied first to “knowing thyself” and then to “expressing thyself” (Nadaff, 2005). Kouzes and Posner (2012) further add that if leaders can better understand their own values and strengths—they are better equipped to align employees around the mission and values of the organization, while also meeting the needs of the customers, clients and constituents that they represent and serve. The authors further assert that team and organizational success begins with creating an environment that supports leadership capacity within the individual to discover their natural strengths and to empower them to take ownership of outcomes (Kouzes, 2012).
There is no doubt that future leaders face great challenges as they forge ahead in the 21st century. Retirement waves, globalization, climate change, technology transitions, partnership programs, accessible services, accountability mandates and extreme financial pressures are all driving the demand for transformational change.
Changing Nature of Leadership in the Private Sector
In a world of disruptive digital business models, technological advancements, and globalization, citizen demands for social change are challenging private sector leaders to take a more active role (Volini et al., 2019). The single-minded pursuit of profit is eroding public trust, destroying the environment and causing civil unrest. United Nations leaders recognize these pressures command a response from business leadership towards a more socially responsible and sustainable business model for their survival (2015).
Traditional command and control models and mindsets of leadership in pursuit of market share, profits and growth are shifting. Business leaders once selected for their specific business acumen including their business-related knowledge and competencies such as marketing, finance, vision or strategy now require additional competencies to manage the rapid pace of change, harness the leadership potential of others and engage with external and internal stakeholders (Zigamari, 2018).
Globalization of the workforce, technology and changing consumer and citizen demands affect the pace and magnitude of change of how private sector organizations now operate. Previous transactional competencies of leadership focusing on day-to-day operations and establishing and controlling systems and processes to achieve set targets now requires competent leaders that support and manage transformational change within their organizations to ensure long-term sustainability. Transformational leadership requires vision, strategy, and a culture of shared values that supports the change strategy, and empowers, motivates, and inspires those who are involved or affected by the change (Chambers, 2011).
Leadership in the private sector is no longer finding effective results through the top-down approach to executing a company’s strategy. Business directives or strategy once delivered from the executive boardroom based on efficient utilization of resources, centralized decision making and bottom line financial results now requires a common leadership philosophy embedded in the organization’s culture that supports leadership at all levels, is collaborative and is more responsive to changing stakeholder needs.
Stakeholder values and expectations of private organizations are rising due to increased global competition, technology, social media, open data, environmental degradation and corporate scandals towards a more accountable and transparent governance model. In a traditional business model, shareholders primarily influence the organizations strategy usually with the sole objective to increase share value. These new stakeholder dynamics stress organizational leaders to be more accountable and transparent in the decision-making process through engagement, innovation, collaboration and partnerships.
Changing Nature of Leadership in the Public Sector
A survey conducted by PricewaterhouseCoopers indicates that trends such as rising customer expectations, budgetary constraints, competition for investment, public sector reform programs and changing demographics have transformed the environment in which the public sector now operates. This, in turn, has broken down old constraints and created new opportunities. Fundamental to the demand for better public services are the heightened expectations of citizens – expectations that transcend economic status, geographies and the different methods of funding, managing and delivering these services (2007).
In Canada, public service leaders are adapting to growing complexity. The role of the public service is becoming more ambiguous given the new global economy, the rapid pace of change, technological and digital advancements, measures of fiscal restraint, increased levels of transparency and heightened expectations. Canada’s Public Policy Forum report that to remain relevant and resilient, public services need to transform their cultures and modernize their practices in order to become flat, flexible and forward thinking (2014).
Over the past thirty years, the focus of government reform in Canada fixated on private sector management values of improving efficiencies and reducing costs in the administration of public services while maintaining accountability and flexibility to public needs. This aim of New Public Management (NPM) is to reduce the overall bureaucracy and cost of government and to tailor responsive service delivery to the citizens through the contracting out of services to the private and not for profit sectors. The concept of NPM created significant leadership challenges and public servant identity dilemma through the constant tension between accountability on the one hand and the need for creative, flexible management on the other. The NPM initiative underestimated the complexity of the environment and conflicting demands on the administrative component of government.
Although roles are priorities are shifting, preserving core values such as respect, integrity, accountability, service and teamwork provide a solid foundation for a consistent, whole of government approach based on shared goals (Canada’s Public Policy Forum, 2014).
According to Canada’s Public Policy Forum, transforming the public service to a flat, open, networked and horizontal organization that is collaborative inside and outside government requires a respectful, inspiring work environment where all employees feel engaged and empowered (2014). Adapting to the increasing speed of change, pressures from globalization, digitization and increased citizen demands, government is streamlining processes for information sharing, decision making and resource deployment. To support collaboration in government, the public service is recognizing innovation and a forward-looking approach than can effectively anticipate change, shape outcomes through new tools strategies and partnerships. The public sector now recognizes creativity and intelligent risk taking to develop new and better ways of serving citizens (Canada’s Public Policy Forum, 2014).
Changing Nature of Leadership in the Not for Profit Sector
Not for Profit (NFP) organizations play a vital role that contributes to the economy, public policy and laws that reflect the current needs and values of Canadians. The services they provide are critical and add social value – they focus on gaps in society not addressed by the corporate or governmental sectors. NFP’s have strong connections to the communities they serve and are able to mobilize the efforts of committed volunteers. NFP’s typically have a deep understanding of their communities and strong connections with other non-profits, governments, other public sector organizations and the private sector.
NFP’s provide opportunities for individuals to express their beliefs and values to improve their conditions and create stronger communities. The sector has proven to be an important partner to governments in providing health, housing, immigration, child welfare and other essential services to Canadians. The NFP sector’s ability to provide its services has come under ever-increasing pressure with changes in public policy and significant client demographic shifts, governmental austerity measures, new commercial initiatives, and growing competition from for-profit providers. Although the sector has responded creatively in many instances, the increasingly complex environment is straining the skills and abilities of NFP leaders to meet such demands (Crawford, 2010).
Due to its non-economic constraint, leadership in NFP organizations presents a specific set of challenges. The primary difference in non-profit leadership is that it takes both paid and unpaid people to fulfill the mission. Traditional NFP leadership models recognize competencies needed to support varied and complex internal and external stakeholder relationships, commitment to mission-driven work, strong financial stewardship and collaboration (Ontario Non-Profit Network, 2017).
Converging Nature of Leadership in the Three Sectors
Distinct competencies within the private, public and not for profit sectors reflect unique values relative to the organizations operating environment and culture. Private sector competencies including: business acumen, visionary leadership, financial and human resources management, market acumen, client service, and timely and opportunistic decision-making vary quite differently than those competencies found in the public sector: managing competing interests, managing the political environment, internal and external engagement and adding value for clients. NFP competencies are mission driven; reflect complex internal and external stakeholder relationships and collaboration with individuals and the community. Environments exhibiting more complex and unresolvable problems and the need to respond to the public good drive public sector competencies. Private sector competencies reflect environments where goals need to be specifically defined and implemented in a timely manner related to making a profit and surviving in a competitive environment. NFP sector competencies operate in an environment that provides social value for citizens and communities where the private and public sectors cannot.
Working across sectors makes it possible to leverage each sector’s strengths. The private sector’s efficiency model towards shareholder value is its main strength compared to the public and not for profit sectors. The public sector strength of accountability and legitimacy is void of private sector profit motives that enable a longer-term view of delivering valuable public services. The NFP sector’s strength of its close relationships with local community stakeholders allows for a swifter response than government while also escaping the profit model of the private sector. As each sector has its own distinct characteristics and drivers, it provides for opportunities for the three sectors to work closely together and the potential to outperform each individual approach. Working across sectors can lead to the identification of new opportunities by bringing together different perspectives and experiences. New combinations of old concepts can generate creative ways of doing business (Rosen, 2013).
Succeeding in today’s globalized world requires a breadth of knowledge and an understanding of interconnectedness. With many issues overlapping sectoral interests, future organizational sustainability requires greater collaboration amongst the public, private, and non-profit sectors. The impact of globalization, technology and heightened citizen expectations demands a need for transformative change across the sectors. Approaches to leadership are converging in that effective leader’s must articulate their vision of the organization and connect with individuals within the organization. Leadership needs to appreciate how change affects individuals, minimize its negative impacts, and lead and sustain change in the organization. Furthermore, they must create an environment that supports employees in the organization to effect change.
- Canada’s Public Policy Forum (2014). Flat, Flexible, and Forward-Thinking: Public Service Next.
- Chambers, M. (2011, June). Effective Change Leadership in Organizations. Retrieved from http://www.cch.ca/newsletters/Business/June2011/Article1.htm
- Crawford, J. (2010, May/June). Profiling the Non-Profit Leader of Tomorrow. Ivey Business Journal. Retrieved from https://iveybusinessjournal.com/publication/profiling-the-non-profit-leader-of-tomorrow/
- Kouzes, J. M., and B.Z. Posner (2012). J-B Leadership Challenge. In J. M. Kouzes and B.Z. Posner Leadership Challenge: How to Make Extraordinary Things Happen in Organizations.
- Nadaff, T. (2005). Leading Authentically: New research into the link between the essential self and leadership effectiveness. In L. Coughlin, E. Wingard, & K. (. & Hollihan, Englightend power: How women are transforming the practice of leadership (pp. 301-314). San Francisco: Joseey-Bass.
- Ontario Non-Profit Network (2017). Leading Our Future: Leadership Competencies in Ontario’s NonProfit Sector. Retrieved from https://theonn.ca/wp-content/uploads/2017/07/ONN.Report.Leading-our-Future.FINAL_.pdf
- PricewaterhouseCoopers (2007). The Road Ahead for Public Service Delivery: Delivering on the Customer Service Promise.
- Quinn, R. E. (2005, July-August). Moments of Greatness: Entering the Fundamental State of Leadership. Harvard Business Review, pp. 1-13.
- Rosen, A. (2013, October). The Tri-Sector Athlete. Retrieved from http://pause-stiftelse.com/sites/default/files/Tri-sector%20leadership.pdf
- United Nations Global Compact. (2015). IMPACT: Transforming Business, Changing the World.
- Volini, E., Schwartz, J., Roy, I., Hauptmann, M., Van Durme, Y., Denny, B. & Bersin, J. (2019, April). Leadership for the 21st Century: The intersection of the traditional and the new. (2019, April 11). Retrieved from https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2019/21st-century-leadership-challenges-and-development.html
- Zigamari, D. (2018, August). The Evolution of Leadership Skills: Don’t Become Extinct. Retrieved from https://www.chieflearningofficer.com/2018/08/10/the-evolution-of-leadership-skills/
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