Developing the Henry Fords of the new economy

Great leaders will figure out how their new organizations can excel in new business environment.

Larry Baldachin is very excited about the new economy.

The Internet is completely changing the way people conduct business. And never mind the years of hype or more recently the anxious hand wringing over dotcom failures, this thing is only getting started.

“It is a baby,” says the recent appointment to the newly created position of e-Executive in Residence at the University of Toronto’s Rotman School of Management. “It’s absolutely just beginning.”

It may not be clear exactly where the Web is taking business, but far from being daunted, Baldachin relishes the opportunity to figure out what it all means. “It’s like being in the car business in the early 1900s,” he says.

What is obvious is that performing in this new context will require a new kind of leader.

For one thing, there is likely to be a much greater emphasis on customer satisfaction.

If there is one thing the dotcom meltdown showed, it is that products and services will be more important than ideas without substance.

“What you are seeing is a much more mature approach in this area. You need to approach the Internet from a business perspective first. You need to be looking at existing processes that can be streamlined or providing services that are of real value.”

More than the basics

Basic leadership skills that are part of decision-making and implementation are changing because of technology, says Baldachin. The ability to find and sift through vast amounts of information quickly to make informed decisions will become indispensable to good leadership. And operational execution will be dependent upon a better grasp of technology because so many projects are technology driven. Those are the functional prerequisites to good leadership in the new economy.

But leaders will need more than just good functional ability. There is an attitude shaping the new economy that leaders have to adopt or at the very least become comfortable with in others. It is in a word — speed. Things happen quickly and it is both an opportunity and a challenge. Successful leaders will figure out how to excel in that environ- ment. They will have to do more in less time, and the great leaders will figure out how to do it.

If these e-business days are akin to the early days of the automobile, successful leaders will emulate Henry Ford and forge new processes and products, coming up with completely new ways of doing things to enable their companies to succeed.

There are invaluable opportunities to capture information on customer habits for example, but the leadership has to know how to capture it, says Baldachin.

Today if a business wants to launch a Web site they can have several models developed so that clients and customers can try it before launching the final product. The more hypotheses you can develop and test prior to finalizing a decision, the better, he explains.

Paradoxically, the abundance of information also poses a danger.

New economy leaders also have to be much more risk-oriented, they can’t be afraid of making mistakes and have to have the confidence to make decisions quickly. It’s possible to drill down forever looking for evidence to support a decision. “At some point and time, you just have to say, ‘That’s enough,’” he says. “Sometimes taking too much time means missed opportunities.”

It is one of the biggest challenges with people coming from a traditional business environment, getting them to make decisions. They tend to want to consult too much. “You can’t get into this analysis paralysis phase that you do in traditional business,” he says. Leaders have to be taught that it is not wrong to make a mistake, he says.

“Give them a project with a broad scope and that requires a fair degree of collaboration as well as individual effort and you give them a timeline.” Mistakes will happen, the key is to coach them based on their performance and give them feedback so they become accustomed to working in that setting.

Hire people better than you

There is an important difference between leaders and managers, says Baldachin. Managers focus on the details and are more concerned about execution, while leaders are typically not as adept at the details —“The trick in leadership,” says Baldachin, “is always hiring people that are better than you are in the areas you’ve hired them.” Leaders will set the vision for the business and serve as the beacon to guide employees toward the goal.

But leaders will also need to be aware of the dangers that a net-speed business world entails.

It’s a big challenge because the burn-out rate and the stress rate is huge, says Baldachin. A lot of people tend to be harder on themselves than their employers, he says. So leaders have to be mentors for people and ensure they are have parameters about what they are doing and set a pace that somebody can survive on.

Employees have to be taught how to manage the scope and time-frame of what they are trying to do because while things are already happening fast, they are only going to get faster.

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