Welcome to the new leadership horizon

Aug 15, 2011

We all carry around a mental model of the economic environment in which we work.It may not be a carefully calibrated, sophisticated model – it may be simplistic in the extreme – and we may not even be consciously aware of it, but it’s there nonetheless, and it informs all the choices we make.

As best I can represent it, here’s the mental model that most of the people I interact with (clients, peers, advisors, friends) have, until recently, had as a backdrop to their key decisions:

How we thought it was going to be

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It’s pretty simple: things were good until about 2008, then we fell off a cliff for a couple years, and sometime earlier this year it should have started getting bearable again – in time to pull us back to some sort of ‘good’ by the end of this year, albeit not as ‘good’ as it was pre-2008.

In the last six weeks or so, it has become clear that this model is not how it’s going to be. However you want to define it (double-dip or no, recession or not) the reality is that we’re plumb in the middle of a 7-year cycle, one which is unlikely to bring us back to ‘good’ (however ‘good’ is defined – more on that later in the week) until around 2014.

What we’re in the middle of looks more like this:

How it's going to be

Because I’m 128 years old (well, actually because of the time I’ve spent working in both the UK and the USA) I’ve lived through 7 recessions in my business career, and one thing is clear: the duration and scale of what’s happening to the global economy during this seven year cycle is fundamentally changing the way business works; is changing the essence of business leadership; and in particular, is changing how we must lead our organizations to success.

In coming posts I’m going to explore the six most fundamental implications of the 2008-2014 cycle on leadership, business growth and the meaning of ‘success’, but for today, I’d like for you to answer the question:

What’s the single biggest implication for you – and your business – of the blue line above?