
The Evolution of Business
And, Subsequently, the Evolution of Leadership
The way business is being conducted today differs tremendously from the way business was conducted years ago. Subsequently, these dramatic changes have forced leadership to evolve, too.
Let’s start with the industrial revolution.
The industrial revolution is characterized as the transition from hand production methods to mechanical production methods. The rise of machine tools and the development of factory systems emphasized a need for operational effectiveness. Thus, a special type of person was needed to ensure that the systems or processes in place output the most that they possibly could.
The people to accomplish this would be tactical and hands-on. Their attention fine tuned to the here and now, with a special focus on internal factors (i.e., resources and machine efficiency). With high business acumen, they would squeeze every benefit from existing processes. Order and consistency were their two values. These people were called managers.
Managers have always played an instrumental role in organizational success. However, their emergence came in a time when things were relatively simple. It was this simplicity that allowed managers to directly impact organizational success through superior planning and performance.
The scientific community noticed this in their studies.
The consensus among researchers during the time of the industrial revolution was that organizations are best viewed as machines. The mechanistic model, based on predictable processes, linear exchange relationships, and hierarchal control structures, suggested that leaders had direct control over their organization’s success. A top-down approach was emphasized. From this, leadership theories that reduced organizational success as attributable to the singular actions, behaviors, and attitudes of a leader emerged.
Then something happened.
The internet. With the advent of the internet and the subsequent advances in communication and globalization, the way business was conducted shifted dramatically. Now, things are no longer simple. Organizations have become intricate, nonlinear, complex systems. Now, managers and leaders who once thought they could directly impact organizational success are finding it extremely difficult to do so, and are coping with factors they can neither anticipate nor control.
Enter the digital industrial revolution.
The digital industrial revolution, characterized by relentless technological advances and constant change, has caused an evolution in leadership science. In their continuing studies of leadership, researchers have noticed limitations in the application of traditional leadership theory to modern organizations. So, naturally, researchers began to question the assumptions and models that they previously relied on. Leadership is not what we thought it was.
In response to these limitations, researchers have created a new theory of leadership, Complexity Leadership Theory (CLT). CLT, based on complexity theory, approaches organizational matters holistically. Rather than viewing leadership just as interpersonal influences like traditional leadership theory has, CLT views leadership as a process of providing and developing organizational capabilities that ultimately lead to greater and rapid innovation. The idea, of course, is that the more innovative an organization is, the more likely it is to survive.
So what exactly has changed?
Then, business was conducted simply. The playing grounds rarely shifted. Even if they had, it would unlikely be a dramatic shift that would cause a frenzy. Now, business is conducted complexly. The playing grounds are constantly and dramatically shifting due to rapid technological advances and global communication.
Then, leaders controlled organizational success directly. External forces were minimal, so all a leader had to do was plan accordingly to the internal factors. Now, leaders can’t control shit. External forces are overwhelming and internal factors are too immense.
So how are today’s leaders supposed to cope?

According to CLT, leaders can cope with the unpredictability of today’s business world by developing their organization’s capabilities for innovation. For example, the development of a diversity initiative would attract a diverse workforce with ideas that could keep the organization in business for the next couple of years. Or, how about developing the organizations cross-functionality? Letting various departments and teams collaborate may have the same effect. At any rate, the end game for a leader in today’s world is to innovate and adapt — a grand step away from what it once used to be: order and consistency.

