The Leadership Dilemma

When Times Change and Generations Collide

Your leadership style is heavily influenced by the leadership you have experienced yourself. The way how you run and build a company is the result of the companies you have worked in, your experiences, and your considerations.

This leads to the following observation in our work with founders and startups: The average founder is somewhere between 35 and 55 years old and has experienced at least one company and one leadership style before. Their leadership is therefore often influenced by an even older leadership style, often based on assumptions from 20 or even 30 years ago. (Of course, exceptions exist.)

At the same time, the needs toward leadership, defined by our current times and the people we lead, have fundamentally changed. The result? Founders struggling to lead effectively, working harder and harder, doubling down on the same patterns that lead them into the dilemma. A vicious cycle.

Today, we companies need to react and evolve much faster than 30 years ago. This is impossible to achieve long-term and at scale in a top-down managed company. Furthermore, younger generations crave more autonomy, independency, impact, and purpose in their work, which is in stark contrast with taking orders. The why is more important than the what. People want inspiration, rather than management. At the same time, younger generations are also overwhelmed with a plethora of decisions they can make in the presence of absolute freedom while not prepared for this during education.

Education does not prepare people for good and effective decision-making as individuals and, even less so, as groups. To the same extent generation Z desires impact and autonomy, they struggle with making good decisions fast due to an overwhelming number of options.

Furthermore, how we evaluate decisions, is broken. Most leaders evaluate decisions based on the outcome, not on the decision-making process. Which leads to people fearing decision-making as they can't guarantee a good outcome. This leads to a decision-paralysis at the bottom, usually "solved" by someone higher up the ranks stepping in and taking the decision. This is a band-aid for broken decision-making, which increases dependency and decreases the organization’s ability to make good decisions fast.

In other words, the systemic issues in organizational decision-making are patched by doing more of what created the systemic issues in the first place. Kind of like reinstalling Windows 95 on an M4 MacBookPro. — It will likely not solve your issues.

Understanding Generational Differences

Traditional leadership is based on a top-down divide-and-conquer approach and on the mindset, that people at the bottom know less, are less informed, and are less smart than the people higher up. Decisions are mainly made at the top and passed down the chain of command.

Knowledge is shared on a need-to-know basis. Even more progressive companies often fall back on this "tried-and-tested" (aka "we always did it like this") approach, when under pressure. This is especially harmful as it teaches people that they are not trusted with the difficult decisions and in critical situations. Teams can decide whatever they want while the sun is shining, but when clouds arise, top-level orders are given.

Younger generations, but not only them, struggle with this. They want to have a say in their work, what they work on, how they work on it and with whom. They need to understand why they are doing their work. There is the myth that generation Z does not want to work or is too sensitive and not as productive as older generations. From my observation, it is more like younger generations are less okay with doing bullshit work. They are great sensors in your organization to detect unclear purpose and meaningless busy-work. Furthermore, their desire for a good "work-life-balance" is a reminder that organizations should exist to improve peoples lives and not just for profit only.

In an organization with a clear purpose, strong relationship and a good alignment between personal and organizational values, people are willing to give much more, and it will feel less like work. Everybody wins.

The opposite is equally true: The more leaders resort to traditional leadership approaches, the less effective and outright harmful their leadership becomes.

The Need for Change

Apart from the generational differences, times are also different. Technological advances happen faster than ever. The world is more globally connected and changes at the other end of the world influence us actually within seconds or days.

This is too much for an individual leader or a small leadership team to handle. The amount of data is endless. The conflicts between context and the organizational setup are also not immediately visible to founders or management. Change driven from the top usually comes too late and happens in the wrong way, leading to an organizational setup already outdated, once the company transformed.

This results in missed market-trends, lost business-opportunities, overwhelmed founders, burnt-out management, and irritated employees, and a huge number of people in the organization who do not think for the business.

To be successful in the long-term, organizations need the opposite: Effective, purpose-driven decision-making and entrepreneurial thinking in every position of the company. Clear processes, how to drive and inform change from every role and position in the company. A way to handle and influence this organic and dynamic organizational evolution that might seem like chaos to leaders who are used to more rigid structures and org charts with crystal-clear, well-defined responsibilities. Only the flexibility coming from these degrees of freedom paired with an understanding how to handle this freedom and responsibility will lead to an organization that can adapt to changing circumstances fast. Organizational resilience and adaptability at its best.

The Challenge of Freedom

The desire for freedom and autonomy among younger employees is often at odds with the necessity for accountability and responsibility. This paradox presents a unique challenge for leaders who must find a way to unleash their teams while ensuring that organizational goals are met.

THE PARADOX EXPLAINED

Younger generations, particularly Millennials and Gen Z, crave a work environment that offers flexibility, creativity, and self-direction. They seek the freedom to make choices about their work, including how and when to complete tasks. This desire for autonomy is rooted in their upbringing, where they were frequently encouraged to express themselves and take initiative. However, with this freedom comes the challenge of responsibility. Many younger employees have not had extensive experience in managing their time and decisions, leading to potential struggles with accountability. School and university do not prepare people for this adequately.

THE ROLE OF LEADERSHIP

Today, leaders need to assume more of a coaching role, than a management role. While setting clear expectations can help to give guidance and direction, being too specific and be considered controlling and harm the relationship.

Leaders can help their employees to become better at decision-making by role modeling and being transparent about their process, and by encouraging self-reflection. Furthermore, more than ever, it is important for leaders to create a safe environment where people can experiment, fail, and learn.

Offer training and support where needed. The directive should always be how to prepare people for more freedom, rather than restricting their freedom to achieve the desired results.

Observation from our work with startups: Not only younger generations, but people of all age struggle with collaborative decision-making. We usually do not learn this at school, and therefore the only tools available to most teams are:

• HIPPO – Highest-Paid Persons Opinion wins

• Loudest person wins

Train people in decision-making, give them additional tools and enable them to make decisions collaboratively and also come up with ideas collaboratively (also here, "brainstorming" is not the answer). (P.S.: We run trainings on this topic, online and in-person. ;) – Talk to me, if you would like to learn more.)

SOLUTIONS AND STRATEGIES

The solution is simple, but not easy:

As leaders, we need to shape organizations through less control and more inspiration. We need to establish processes and structures that enable self-organization and self-evolution. We must train people to thrive in these environments. And most importantly: We must trust in the good of people and the collaborative intelligence of the group. We must let go of our own power and embrace the discomfort of not knowing and not being in control.

We have to resist the urge to compensate for lacking experience of employees with more control and structure but answer this demand with more coaching and training. You can read more about this topic here.

It is probably noteworthy, that the servant leadership approach can be as harmful as it is promoted. A leader who continuously unblocks their people might not necessarily enable them to unblock themselves going forward, and thus fails to bring forward new leaders. The organization of the future needs leaders in all positions – people who feel responsible for the shared purpose and bring forward their best to contribute to achieving this shared purpose. In this environment, conflict is healthy and supports good decision-making. When everybody sees themselves as a leader and takes responsibility, the question might be: How do we coordinate change to not drown in chaos and conflicting initiatives? — A tension-based proposal process can be part of a solution. It is usually better to let friction arise and solve it then than trying to predict future issues and build systems for problems that never manifest.

Organizational culture plays a pivotal role in shaping how employees experience freedom and autonomy in the workplace. A supportive culture not only encourages self-organization but also ensures that employees feel empowered and accountable for their work. As organizations strive to adapt to the evolving needs of younger generations, it is essential for leaders to cultivate a culture that fosters this balance. Here are some actionable tips for leaders to create a supportive culture that facilitates a successful transition to greater freedom and autonomy.

1. Define and Communicate Core Values

Articulate the core values of the organization that promote autonomy, trust, and collaboration. Leaders should communicate these values consistently through various channels, including onboarding sessions, team meetings, and internal communications, and live them daily. When starting out, define the values in collaboration with your team, so everybody understands them and feels connected to them.

2. Encourage Collaboration and Teamwork

Build a culture of collaboration by creating opportunities for team members to work together on projects. Encourage cross-functional teams to leverage diverse perspectives and skills. The ultimate goal of each company should be to serve its customers in the best possible way. Everything else (think: departments, conflicting initiatives, lengthy backlogs, deadlines, politics, …) is a fluffy distraction.

3. Promote Transparency and Open Communication

Establish open lines of communication where employees feel safe sharing their thoughts, concerns, and feedback. Leaders should model transparency by sharing organizational goals, challenges, and successes. Default-to-open. This will enable people in all positions to make better decisions for the company.

4. Encourage Risk-Taking and Learning from Failure

Cultivate a culture that views mistakes as learning opportunities rather than failures. Leaders should encourage employees to take calculated risks and support them in experimenting with new approaches.

Experiments that never fail, are not experiments but “playing it safe”. Remember: You cannot judge a decision based on its outcome, but only based on the underlying decision-making-process.

5. Provide Professional Development Opportunities

Invest in training and development programs that equip employees with the skills needed to thrive in a self-organizing environment. This could include workshops on time management, decision-making, coaching, and leadership development as well as training on tools and processes you use.

6. Empower Decision-Making at All Levels

Delegate decision-making authority to employees at all levels, allowing them to take ownership of their work. Leaders should trust their teams to make decisions that align with organizational goals. When somebody wants a decision from you, you might ask them what they need to make the decision themselves. Is it information? Is it permission?

Many leaders fail at creating an environment where people can confidently make decisions. This often results in founders / top-level leads becoming the bottleneck for organizational decision-making and performance. At the worst stage of this, the founders are constantly busy, neglecting their private lives, and still not having enough hours in a day to make sure everything happens properly. See yourself in this? Let’s talk, we can solve this.

7. Solicit Feedback and Adapt

Regularly seek feedback from employees about the organizational culture and their experiences with autonomy. Use this feedback to make adjustments and improvements to policies and practices.

CONCLUSION

Leaders need to reflect on their leadership style and where it comes from. Unfortunately, a lot of leadership advice is based on past centuries and generations who already retired a while ago.

Leadership development programs regularly lack behind with their curriculum, teaching approaches to leadership that used to work in a very different environment.

The challenge for leaders today is to question this advice and contrast it with their reality, their people, and their context. Leadership requires courage. — The courage to act, think, and lead different.

Reflecting on your leadership today: What is your biggest leadership challenge? Please let me know in the comments!