What Makes a Good Leader and How You Can Become the One?

What True Leadership Looks Like?

Ajay Banga knew the payments industry was about to undergo a radical change when he became CEO of Mastercard in 2010. However, he chose to concentrate the company's expansion on the 85% of global payments that were still made by cash and checks rather than fighting for market share within the 15% of payments that were already electronic. He saw the financial inclusion of people and small enterprises without access to the formal financial system as a social duty as well as a business necessity. It suggested new ways of thinking and acting about the government, market, talent, clients and technology.

Employees at Mastercard had to grow and diversify their core in addition to starting fresh businesses to innovate for a customer base that was becoming more and more diverse. However, those workers ranked "innovation" 26th out of 27 factors critical to the business's success going forward at the time. Banga therefore gave one of his executives, Garry Lyons, the mission of bringing innovation into Mastercard's culture. Lyons seized the chance to be what Banga called a “catalyst of change” with a sizeable additional investment and unrestricted use of the funds. 

Lyons created Mastercard Labs, a global research and development network to show stakeholders, customers and employees the "art of the possible." Over Banga's ten-year tenure, Mastercard Labs played a pivotal role in expediting the organization's metamorphosis from a charitable group of banks to an independent worldwide technology enterprise operating in the payments domain. As a for-profit company, it felt a more than 360% increase in market capitalization.

21st-century leadership has become more difficult due to rising stakeholder expectations, more complex global execution, the necessity of digital transformation, and the increasing importance of innovation for long-term success. However, according to Harvard University, Banga and Lyons illustrate the kind of leadership the world needs today - a blend of abilities that foster innovation both inside an organization and across external organizations and ecosystems.

Leading Innovation: Collective Genius 1.0

Linda, Greg Brandeau, Emily Truelove and Kent Lineback presented initial findings from their 2014 book Collective Genius, which examined the relationship between innovation and leadership.

The book expressed a paradigm shift in the qualities of effective organizational leadership and how the business world was about to enter a new era where competitiveness was primarily driven by agility, innovation and digital technology. In this new world, a leader's role was to invite people to co-create the future with them, rather than to force them to follow them. Teams made up of people with a variety of backgrounds and experiences who were open to working together, trying new things and learning from mistakes were the driving forces behind this process.

Every leader in the book was a visionary who understood that creative thinking rarely came from a single "aha" moment from someone with talent. As a result, they embraced an inclusive definition of leadership and made every effort to make innovation more accessible to everyone. They thought that each person had a unique "slice of genius" that could be used to solve problems and achieve goals for stakeholders by releasing their talents and passions. They established rules, performance measures and limits to reduce excessive risk-taking and maintain alignment while promoting bottom-up creativity, initiative, and improvisation - accounting for the paradoxes that come with innovation. 

They also created what we call "community cultures," where people were united by shared values, a common goal and mutual ground rules that formed the basis for collaborative creation. These created environments also eliminated obstacles to creative problem-solving. Leaders learned to set the stage and foster an atmosphere where others were willing and able to undertake the challenging work of innovation, as opposed to taking the lead and showing others the way. To maximize diversity of opinion and manage possible conflict, experiment and iterate a course forward with many false starts and missteps along the way along with keeping options open so that even opposing ideas could be integrated in innovative and helpful ways, that required an enormous amount of emotional resilience, courage and patience. 

Scaling Genius: Collective Genius 2.0

Following the publication of Collective Genius, Linda teamed up with Emily, Jason, and Karl to carry out another qualitative research on leaders across 21 industries and 18 countries who desired to turn their companies into hubs of innovation. Linda and Emily also partnered with Sunand Menon and Ann Le Cam to conduct executive roundtables in thirty countries and surveyed over 1,500 executives in roughly 90 countries regarding the most important issues facing leadership in the digital age. 

When these two research streams came together, the most important finding was how effective leaders were able to create networks and ecosystems that allowed them to collaborate across organizational boundaries in addition to creating innovative organizations. These individuals mastered the skill known as "scaling genius," which is also the working title of their next book. They took the roles of three interrelated roles - architect, bridger and catalyst.

Leader as an Architect

To achieve scaling genius, leaders must establish an environment and culture that will motivate all employees, from entry-level staff to top executives, to be willing and able to innovate. It was the main leadership responsibility that Collective Genius examined. The difference is that stakes are higher now - innovation is more important and digital tools and data are crucial co-creation enablers. The leadership style, talent, structure, operating model and tools are the five levers that architects use to design, build, and evolve their organizational architectures to support innovation over time, as they outline in their new research. By using these levers, they break down obstacles that hinder creativity and grow the mindsets and actions necessary for working together. 

One leader who they identified as sticking to the principles of leading for innovation is Rakesh Suri, the former CEO of Cleveland Clinic Abu Dhabi and a pioneer in the field of robotic cardiac surgery. Since its establishment, Cleveland Clinic has been at the forefront of medical innovation and expanding to Abu Dhabi was a risky move to increase access to high-quality healthcare everywhere in the world.

Suri and his executive team collaborated closely with Cleveland Clinic CEO Tom Mihaljevic, colleagues in the United States and Cleveland Clinic Abu Dhabi board chairman Waleed Al Mokarrab Al Muhairi, who represents Cleveland Clinic Abu Dhabi's joint owner, the investment company Mubadala. This collaboration began as soon as Suri got the role of CEO. Together, they worked to establish a healthcare environment in which each caregiver (a term they used for any employee working in the hospital), possessed the mentality and technological resources necessary to be agile, creative problem solvers for the benefit of patients, other caregivers and the community.

In March 2020, when researchers spoke with Suri, he was facing his most difficult leadership challenge yet: running the hospital from home while spending the required 14 days in quarantine due to travel. Even though he was physically away, his coworkers carried on changing the hospital's operational model as Covid-19 started to claim lives, overtake healthcare systems and collapse economies all over the world. 

When his quarantine was over, Suri was struck with humility at the achievements of his caregivers. In a matter of weeks, the team established a fully functional telehealth system that conducted 1,500 virtual consultations daily and increased the number of visits to the emergency room from 200 to 1,000. Caregivers are now able to be “contemplative and creative, rather than reactive, problem solvers,” said Suri, thanks to the efforts of the leaders. "I had never seen people step up, respond and collaborate in such a big way in my leadership career," he continues. The fact that they were given more power was even more incredible.

Leader as a Bridger

Encouraging innovation across business units, geographies, and functions within an organization is difficult enough but getting staff members to collaborate closely with individuals outside the company is an even bigger challenge for a leader. However, that is precisely what a bridger needs to do: methodically acquire access to skills and resources that are not available within the borders of a single division, department or business.

To facilitate diverse parties' co-creation, this is frequently attempted by constructing distinct innovation labs, incubators and accelerators. Effectively bridging organizations, sectors, industries and countries requires the bridger to build social connections based on mutual trust, influence and commitment.

Leader as a Catalyst

Scaling genius often requires the co-creation of people outside of the organization from individuals and groups within its larger ecosystem. It is the catalyst's responsibility to promote and quicken these multiparty collaborations to bring ideas to reality more quickly. 

Mastercard discovered that certain financial institutions lacked the internal resources necessary to implement the digital payment solutions it was creating for their clients as it moved forward with its digital transformation. The company then went ahead and used its ecosystem to link legacy organizations with fintechs that could help them see new opportunities and develop new capabilities to catalyze co-creation. Tim Murphy, the chief administrative officer of Mastercard, described the company's transformation from a gatekeeper at the heart of commerce to a cooperative facilitator of commerce and economic opportunity as coming from its ability to "stitch partnerships and ecosystems together."

An organization's complex web of relationships is proactively managed by catalysts. They identify the need to empower other organizations to operate differently to enable the organization to achieve its goals, so they map those connections, energize and activate key players. These others are frequently "unusual suspects" - businesses, governments or people from outside the sector or industry that the catalyst has little direct control over. Leaders risk harming their organizations' innovative efforts if they are unable to recognize and collaborate with these unusual suspects.

The Ability to Let Go of the Formal Authority

A growing number of leaders will need to act as catalysts, bridgers and architects. A different perspective on leadership than previous ones creates the basis of all three. When people first start working as managers, the majority of them think that their position in the hierarchy gives them power. However, they quickly learn that none of their team members, especially the most talented, follow instructions. Additionally, commitment is what they require, even though they might believe that compliance is what they want. People won't take the initiative or the necessary risks to carry out or participate in even small-scale innovation if they aren't committed.

Nowadays, even the most experienced senior executives are becoming more and more constrained by these realities. Since innovation is a voluntary action, formal authority is a very limited source of power when it comes to leading innovation. Even in positions of authority, command and control are ineffective, instead, leaders should encourage innovation and provide the necessary room for it. To be a good leader, one must be willing to change for the better. It involves feeling comfortable using their influence beyond the scope of their formal authority. It also involves interacting with odd suspects both inside and outside of their organizations to experiment, collaborate and learn. Leaders who avoid situations where there are "too many cooks in the kitchen" are no longer practical. In today's competitive environment, the researchers stated that you can never have too many cooks: a leader's role is to "get many top chefs to cook a delicious meal together that others will want to pay for."

To conclude, we face an existential leadership challenge and humans tend to turn to our muscle memory in times of crisis. However, you cannot get where you want to go with the way you have led in the past. It's time to welcome a new breed of leader, one who is ready to embrace the challenge of creative problem-solving and who is able and willing to harness the plethora of passions that surround us to improve the world.