New trends in leadership for the 21st century (I)

The global challenges of our time need a holistic form of humanistic leadership capable of combining the care for individuals, corporate reality, and the common good into a single management style.

Alberto Núñez
Cristina Giménez Thomsen

Many articles and books are currently being written about the need for a more humane new style of leadership and management. They come from both scholars and practitioners alike: the specialized financial press like FT (Business leaders feel pressure to keep their skills up to date or Turbulence ahead: new leaders required), strategic consultancies, such as McKinsey (Hubert Joly on unleashing human magic) or BCG (Human-centered leaders are the future of leadership), or even international institutions such as the World Economic Forum, that emphasize the importance of education in order to prepare future leaders.  

This turnaround has been caused by a wide array of factors.  

On the one hand, many are now perceiving the drawbacks of a very scientific, efficiency-driven, shareholder-only based mind frame. In this perspective, human resources are more a cost to manage than an asset to develop. No surprise, then, that employee engagement and retention levels are going down in many industries and sectors. Facing what has been called the “great resignation” and a tight labor market, many companies have sounded the alarm. Suddenly, the “old,” but still present in many companies, management playbook looks short-sighted and short-terminist.  

But this move has deeper roots. For some authors, this has happened because “(g)lobal challenges and crises including environmental degradation, distributional inequality and societal distrust point to the need to rethink business strategies as well as management theories and practices”. Others emphasize global uncertainty and pervasive polycrisis.  

Employees’ talent is becoming the most important asset of a company

It should be noted, however, that new technologies, such as AI, are rewriting the rules of the game to an extent so far unknown. On the one hand, the value of critical employees and partners has gone up.  

Employees’ talent is becoming the most important asset of a company. On the other, technology and human management do not match automatically. We are certainly no Luddites, but the integration of both has to be made with care. While very few people question the need to invest in the last technology, hiring a new person or developing a new training program is often more challenging.  

New leadership and management styles are then needed.  

What is humanistic leadership?

We can define humanistic leadership as a kind of leadership characterized by “its well-rounded purpose: it treats people as holistic individuals with multiple needs and motives; it strives to simultaneously develop the leader as well as the followers; and most of all, it aims to take care of the interests of multiple stakeholders, while striving to pursue the common good.” For this article, we make no distinction between management and leadership.  

It should be noted, however, that while conceptual papers on humanistic management topics are not lacking, more practical and effective ways to put it into practice are needed. In the rest of this article, we first point out areas of particular importance related to its implementation; second, we review the main theoretical contributions proposed so far; and third, we finish with some conclusions.  

Humanistic leadership treats people as holistic individuals with multiple needs and motives

Our research has identified several areas that seem to be particularly important in the field of humanistic leadership implementation. Since 2021 we have been tracking those conversations in the press and management reviews that speak about the real challenges and experiences of managers when trying to manage in a more humane way: 

1. Self-knowledge 

There is unanimity that a humanistic leader must know him/herself well enough to lead others. It is not just about being intelligent or professionally competent, nor about taking the last course or seminar in the area of leadership. It is about listening to the inner voice of both the strengths and the own contradictions and weaknesses, accepting you cannot control and know everything. You have to know how to achieve internal peace and put it into practice rather than transferring your frustration and struggles to the people around you.  

2. Having a work compass 

The humanistic leader knows where the organization goes and is able to transmit it with passion and conviction to their colleagues. Work is, for many people, what we devote more time to in life. Strong effort and dedication should be rewarded enough and be worth doing. Moreover, the leader should be able to connect every team member’s purpose to that of the organization, ensuring an alignment that it is a key source of creativity and commitment.  

3. Capacity to generate trust in the team

Trust is built through a combination of factors: autonomy, mutual responsibility, constant dialogue, delegation, and good feedback. Humans are over-responsive beings. This means that we tend to multiply what we are given. The example set by the leader is thus essential.  

Trust is closely linked to empathy. Empathy can be measured by how every team member feels at work. It implies understanding the personal and collective challenges that team members are facing. Trying to anticipate them. It helps to create a sense of personal safety, to ask and to answer. Some people intuitively act in this way. For others, personally knowing every team member and having good communication skills is very important.  

All this fosters a culture of care. Humanistic leaders care for the lives of the people they work with and know and take into consideration their personal lives and circumstances. When care is real and trust is high, a means to offset any possible drawback or unforeseen circumstance is surprisingly easily found. And often, even more than offsetting, precisely for the same reason mentioned above that we are over-responsive. Care refers to all dimensions of life, including the professional and the spiritual.  

4. The will to have an impact 

It means understanding that it pays to have a bigger impact, and that the organization can achieve a real and relevant impact in society. It is instilling a sense of good pride in the organization and the team. Our work and commitment will not be in vain, nor will it be diluted in actions that the passage of time will reveal as mere greenwashing.  

Different types of leadership  

How do current leadership theories integrate these aspects? There are different leadership theories that can be classified under the humanistic leadership label, as they tend to emphasize different elements of the Humanistic management creed. They all have some degree of connection.  

Transformational leadership  

According to Bass and Steidlmeier (1999), transformational leadership strongly focuses on the individual and its capacity to significantly outperform given the adequate context of psychological safety, and both organizational learning and organizational justice (Bose and Patnaik, 2015). It focuses on the employee output and the internal processes and conditions to ensure that the individual potential is fully developed and deployed. As weaknesses, self-knowledge, qualitative outputs, and the impact on the wider society context are not prioritized.  

Authentic leadership  

Authentic leadership focuses on the coherence of organizational and individual means and outcomes (Walumbwa et al, 2008). The emphasis is on moral values, balance and transparency between leaders and followers, including not only the professional but other well-being dimensions (intellectual, psychological and spiritual). Social impact issues, or the wider context in which the organization carries out its activities, are not prioritized. It also risks confronting a moral with a more professional perspective rather than finding a balance between the two.  

Ethical leadership  

Ethical leadership emphasizes principles in decision making (Brown et al, 2005). There is a strong accent on moral values, processes, trust, and individual care. The effect of decision making on both individuals and society is key. Therefore, effective communication is also part of this approach. The weakness of this perspective lies in its strong cognitive emphasis, leaving potentially aside self and spiritual knowledge.  

Sustainable leadership  

According to Ruiz (2021), sustainable leadership focuses on purpose and the positive impact on society that corporate decisions should have. A key stakeholder is the environment. Questions regarding developing awareness and social justice are also essential, as well as decision making and social impact measurement. As a weakness, an excessive focus on the environment could leave aside other important elements, such as internal optimization and professional competence.  

Towards an integrated humanistic leadership  

A more humane leadership and management style is “a sign of our time.” From many constituencies and perspectives, “business-as-usual” can no longer mean just focusing on cost efficiency and higher profits for the shareholders. Despite that, there is not yet an accepted and holistic enough humanistic leadership theory.  

Business-as-usual can no longer mean just focusing on cost efficiency and higher profits for the shareholders

The most relevant theories proposed so far emphasize several elements but risk failing to fully integrate the three elements of the equation: the individual (human flourishing and well-being), the corporate needs (profit and economic sustainability), and the common good (contribution to social justice and the regeneration of our planet).  

In Esade we want to follow this road as we think that an integrated perspective can be found. 

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