Leadership, decision making, creative vision, flexibility, management, Shrader

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Earlier this year, I participated in a panel discussion on "Leading in a Networked World" at the World Economic Forum in Davos, Switzerland, and made the point that leadership attention is perhaps the networked world's most scarce resource. In today's technology-driven, real-time communicating, 24/7-accessible environment, the amount of information we receive, the compressed time frames under which we operate, and the global span of our extended enterprises can all be quite overwhelming.

I liken today's world to a liquid environment — fluid, continually changing form and adapting to shifting parameters. Liquid situations are inherently less predictable. Yet liquid is able to create strong connections without being rigid, and as such is powerful enough to change the course of time and nature. Therein is a lesson for effective leadership in the 21st century.

The very nature of the world in which we now live, work and play — one obsessed with instantaneous response — demands of its leaders a different, more fluid approach to how they focus their attention and make decisions. In the swirling vortex of e-mailing and text messaging, the leader's strong inclination is to try to arrive at fast paced, almost immediate decisions. But the fundamentals of solid leadership — clear vision, consistent measures of success, and informed yet timely and unambiguous decision making — haven't changed. Now more than ever before, thoughtfulness and clarity cannot be compromised.

There are certainly occasions upon which instant response is critical, and it is our job as leaders to be discerning and act accordingly. But more often than not, a thoughtful delay will result in a better considered and much better appreciated answer. And it can save us from unintended and widespread outcomes we might later regret. Today's leaders must recognize that "less instant" is often "more thoughtful" and "more solid," especially in a liquid world where every decision has the potential for a far greater radius of impact.

Even the most localized and seemingly innocuous decisions on a leader's agenda today have potentially immediate and far reaching implications. In a liquid world, immediate global communications and evolving public perceptions are such that even the most minor or temporary veering off course can be devastating for both the leader and organization. This creates the need for a coherent corporate approach to determining what is most important and how each matter must be weighed and evaluated.

For example, one area that has significantly challenged my own company, Booz Allen Hamilton Inc., is that of establishing consistent measures of success. Every market area and geographic region in our global firm seemed to have chosen metrics they believed positioned them in the best light. Some had focused on profitability, some on revenue growth; some chose two or three year horizons, while others concentrated on only the current fiscal year. This inconsistent approach to measuring success was, in effect, masking our true performance and hurting our effectiveness and ability to grow, especially in a liquid world in which budgeting and "next phase" decision making — based on current success metrics — needs to be done rapidly and continually.

So we learned. In the current fiscal year, we have sought to explicitly define measures of success and apply them across the board. These include: alignment with the firm's strategy; longer, deeper client relationships; top-line growth better than market; and profitability sufficient to cover compensation and operating costs and to invest in the future. Defining these as the consistent and only measures of success that we're going to track is a major step forward in better leading and managing our business.

In the final analysis, effective leadership in a liquid world simply comes down to following some solid principles. Accept change and uncertainty, but don't let them paralyze you. Be less rigid, consider all points of view, but do not abdicate responsibility for making decisions. Accept responsibility, but delegate authority and communicate honestly and frequently with those to whom you delegate. Slow down: The key to success in this roiling liquid world is, paradoxically, to cultivate a calm center. Maintain thoughtfulness and clarity while staying true to your company's values — the crosscurrents can swirl without you.

Ralph W. Shrader is chairman and CEO of Booz Allen Hamilton Inc., a global consulting firm based in McLean, Virginia. Comment on this article or contact the author through smrfeedback@mit.edu.

Leadership in a Liquid World