Navigating Leadership Challenges in the Modern Business world

In the past few months, I've been working with a manager, let's call him Ido for the sake of the story. Ido has been leading people for almost ten years. He worked in very reputable organizations, has an excellent grasp of how to manage according to goals, organize the team effectively, and maintain effective management routines - both one-on-one and group meetings. However, Ido, who was used to retaining at least 90% of his team, lost a third of his team in the first eight months in his new role. When I first talked to him, I found him embarrassed and mainly confused because he didn't understand where he was going wrong. He applies the same management principles he used in all the companies he led people in before, and something just doesn't seem to work for him this time.

A shift in the nature of "Attachment" between employees and the company

Much has been said about the changes in the "Attachment" between the "X" generation and later generations. Individuals of the X generation grew up in an environment characterized by high loyalty to the employer. They expect that an employee who invests many development efforts will be rewarded by the employer with loyalty. On the contrary, individuals of the Y and Z generation grew up in a different environment. The message they absorbed throughout their childhood is that they need to do what is good for them. They operate in an environment where it's entirely acceptable to "jump" between jobs and diversify. Moreover, they grew up in a period of employment uncertainty, witnessing how their parents were "burned" by employers who did not hesitate to terminate the employment of loyal workers with many years of service, indirectly teaching them a lesson.

Let’s get back to Ido. How does the challenge faced by Ido, dealing with younger employees today, differ from managing employees from previous generations? A significant portion of the workforce in the Israeli market, particularly in the technology industry, was born in the 1980s and 1990s (Generation Y + Z). From here, I am inclined to generalize, but it is evident that patterns cannot be fully understood without generalization. Generation Y grew up with a closer relationship to their parents compared to their predecessors. Their parents encouraged them to share personal matters, maintaining more open boundaries in general. We "pass on" our childhood experiences to our adult lives in various ways. My manager is essentially a figure of authority who once played the role of my parent.

Therefore, many employees expect significant closeness from their managers – that they will listen to them, keep them updated, be open to their ideas, more or less at any given moment 😀 and, of course, be sensitive to their needs. Employees expect that the organization will work for them – creating new opportunities, diversity in tasks, and personal development, introduction of innovative tools, aligning with ecological and social trends. The high demand for talented developers provides substantial momentum for these patterns.

But the challenge is even more complex – traditional managerial anchors do not work as they used to

In the past, the manager had more "control over knowledge," being more exposed to new information from customers, competitors, or technological advancements. Today, the flow of information in the internet and within the organization, significantly reduces knowledge gaps.

Symbols of authority that were once accepted (office size, company car, dress code) are no longer as relevant today. In technology-driven workplaces, it's challenging for an outsider to identify who the manager is solely based on appearances. While it used to be expected for managers to provide feedback to their employees, today almost every company has mechanisms for mutual feedback. In many cases, your employees are not only part of your team but also members of other organizational "communities," such as guilds or professional and volunteer groups. There is also an expectation of high flexibility in terms of time and space, considering that your shared time in the same physical space is often shorter.

Examining three sources of energy to motivate people: authority, power, and influence (Adizes, 1991), we see that the manager's reliance on power (based primarily on knowledge and the ability to reward or punish) and authority (the formal "right" of the manager to make decisions) is less effective. A manager, who previously heavily relied on authority and power, must now primarily rely on influence and the ability to persuade subordinates to take action without using authority and power.

It is not just adaptation to employees from a new generation – it's an adaptation to a new business reality

In order to compete in a fast and changing market, organizations must foster internal entrepreneurship and encourage innovation from every employee. Therefore, the distribution of knowledge and authority is critical for success. Gen Y and Z bring with them fantastic qualities to the workplace – they are independent, initiative, and very quick. They don't wait to be told what and how to do things; they create their own agenda, and can reach out to people both within and outside the organization for the necessary information to progress. They seek ongoing feedback, often shortening the learning process and maximizing collaborative efforts within the organization.

In essence, these employees bring significant value to innovative organizations seeking to adapt to a competitive and fast-paced world. Therefore, it is advisable to view them as a substantial asset that requires continuous development and adjustment from the organization and its managers.

So, what works?

One of the key elements of effective leadership is establishing meaningful connections with each of your employees. The more you involve them in significant events happening in the organization, in your decision-making considerations, the more you will gain their trust (a reminder: the parenting model has changed, and expectations from managers have evolved accordingly). 

In recent years, more and more organizations are adopting the Radical Candor model – a model focused on cultivating close relationships based on meaningful trust and transparency that enable faster business progress in a world where speed is the number one parameter for success. In the modern era, managers are expected to provide a navigational guide in this chaotic world, but equally important, they are expected to serve as mentors to their team. A mentor, not a boss – someone I can learn from through continuous feedback aimed at my personal development in the company and, overall, in my career.

In this context, a personally tailored development plan is preferred over generic organizational talent plans. Therefore, one should not expect generic development solutions; instead, a solution should be crafted through close dialogue with the employee.

Don't be afraid to be assertive and demanding

The primary impact of leaders must be based on Transformative Leadership that includes essential components such as personal example, vision, inspiration, and personal relations. However, I observe many managers who are very reluctant to adopt an assertive stance even when it is clearly needed. 

Just a few days ago, a manager at a startup shared with me the challenge of dealing with one of his employees who works from noon until very late at night (acceptable for both), but never attends the team meeting at 10am, once a week. We tried together to understand why it is so difficult for him to confront the employee and insist that he attend the weekly meeting at 10am. The fear is that it will create frustration or dissatisfaction in the employee, leading managers to avoid conveying an assertive message: "Maybe he will be demotivated... Maybe he will consider leaving...". It is normal to pay attention to the employee and to act with caution, but at the same time a firm and decisive stance actually creates confidence among employees, making them feel they have a responsible manager who knows what they are doing. 

Setting boundaries in childhood is critical for shaping a healthy personality, and the presence of boundaries in the workplace is crucial for personal and team excellence. An excellent leader is the one who demands high standards while expressing true trust and attentive listening.

Ido understood that he needs to develop himself as a leader, connect well with his people, and maintain a close relationship with them. Through such a close relationship that allows for direct and candid feedback, he has also granted himself more and more permission to insist on high standards without fearing that the employee will stand up and leave.

So, perhaps it is more challenging to lead people in the 21st century, or perhaps it is more exciting and motivating for the personal development of the manager? What is quite certain is that the ones who need to make the adjustment are the managers. Why? Because today's employees are much more adaptable to what the organization needs to compete and succeed.