April 19, 2014

Leadership 2030

The Six Megatrends You Need to Understand

to Lead Your Company into the Future
Georg Vielmetter and Yvonne Sell
2014 by Hay Group Holdings, Inc.
Adapted by permission of AMACOM, a division of American
Management Association
ISBN: 978-0-8144-3276-1

Key Concepts
Six big changes are afoot that will reshape the demands
of leadership going forward. Ranging from evolving
cultural attitudes to environmental degradation, these
megatrends will eliminate leaders who fail to adapt.
1. Globalization in the future will be more about
power shifting to Asia than it has been in the past.
The growing middle class in many developing nations will create new opportunities, but also challenges as multinationals try to serve highly localized markets.
2. Climate change will drive resource scarcity, forcing
leaders to fundamentally rethink their operations.
3. Rising affluence will drive demand for customized
products. Just as consumers seek out more individualized experiences, so too will employees whose
work need not be restricted by time and place.
4. The digital era will shift power to consumers and
workers, away from traditional management structures. Already, the digital world is blurring the line

between personal and professional lives, while increasing organizational transparency.

5. The aging population will shrink the workforce
and require leaders to cope with intergenerational
workplaces.
6. Several cutting-edge technologies will converge to
open new markets. Nanotechnology and biotechnology especially will challenge leadership to invest in R&D programs and to respond effectively
to societal worries.
Traditional, alpha-male leadership is ill suited to this
new era. Instead, leaders should focus on becoming
more altrocentric, empowering others as a way to
empower themselves and their organizations. Developing altrocentric leadership begins by leaders asking
themselves questions about style and goals. Are they:
Truly open and curious?
Able to engage colleagues in making meaning
rather than simply presenting one-way narratives?

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Leadership 2030

Providers of bounded autonomy?

Creators of loyalty and managers of the organizations reputation?
Willing to collaborate with partners inside and
outside of the company?

Introduction
In Leadership 2030, Georg Vielmetter and Yvonne
Sell provide a road map of the broad trends that are
reshaping markets, cultures, and companies. Based on
research with the Hay Group, a global management
consultancy, they offer insights into six megatrends:
the shift of economic power to Asia, the escalating war
for talent, environmental crisis, eroding customer and
employee loyalty, the melding of private and working lives, and technological convergence. The authors
show how these self-reinforcing trends demand
enlightened leadership with the skills to engage an
ever-widening circle of stakeholders. Gone are the
days of the egocentric, alpha-male leadership. To survive the megatrend storm leaders will have to provide
workers with greater autonomy while finding ways to
respond to the unique needs of every customer.

Daring to Predict the Future

Predicting the future can be a fools game, but Georg
Vilmetter and Yvonne Sell dare to predict six megatrends that will drive leadership in the years ahead.
Using social scientific foresight analysis (also known
as future research), they spent three years examining
the long-term, transformational, global processes that
will have a broad and dramatic impact on the future
of management.
They identify six megatrends:
1. Globalization 2.0: Power will shift to Asia from the
industrialized West, creating a new middle class
along with new threats and opportunities in highly
localized markets.
2. Environmental crisis: Climate change will drive resource scarcity and rising costs as organizations
make climate consciousness a fundamental aspect of
all of their operations. Oil, water, and even food will
become more expensive and the subjects of conflict.

Georg Vielmetter and Yvonne Sell

ized products from consumers and necessitate

individualized work routines for highly valuable
employees.
4. The digital era: Power will shift from organizations
to employees and consumers as digitization eliminates the barriers between personal and professional lives and increases transparency.
5. Demographic change: The aging population will
strain welfare states. Leaders will need to manage
intergenerational workplaces as older workers remain on the job alongside Millennial employees.
6. Technological convergence: Nanotechnology and biotechnology will create new and untold markets but
require expensive R&D programs.

The New Globalization

The globalization process has developed over centuries, but until recently it was characterized by the
exploitation of resources and labor from the underdeveloped world by the nations of the developed world.
In the new era of globalization, trade flows in many
directions at once, often linking developing regions to

Further Information
Information about the authors and subject:
www.haygroup.com
Information about this book and other business titles:
www.amacombooks.org

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3. Individualization and value pluralism: Rising affluence will create increasing demands for customBusiness Book Summaries April 19, 2014 Copyright 2014 EBSCO Publishing Inc. www.ebscohost.com All Rights Reserved

Leadership 2030

one another without going through a Western middleman as they did in the past.

Georg Vielmetter and Yvonne Sell

through open communication. They can achieve these

ends by increasing the diversity of people within their
organizations and by collaborating intensively with
local partners. Ultimately, they will have to find ways
to earn the loyalty of talented employees and to cultivate the next generation of leaders.

The newly emerging middle classes of developing

nations have expressed diverse and novel consumer
demands. Regional competitors responsive to local
tastes are beating out Western multinationals hampered by their centralized
organizations and global strat- Globalization 2.0 is fundamentally different from version 1.0.
egies. This phenomenon of Goods, people, and capital will flow in multiple directions, not
glocalization has undermined just from West to East, but also very much from East to West.
the
competitive
advantages
of efficiency once enjoyed by multinationals. For
Confronting the Environmental Crisis
example, the Fillipino burger chain Jollibee has been
Economic activity has caused global warming that
out-competing McDonalds simply by offering rice
will soon reach catastrophic levels. Climate change
alongside pineapple-topped burgersmenu items
has already caused more extreme weather events such
popular in the Philippines.
as storms, floods, and droughts. The death, destrucTo thrive amidst Globalization 2.0, leaders need
to sharpen their cognitive and conceptual understanding of complexity. They will also need to create
contextual awareness by encouraging diverse ideas

About the Authors

Georg Vielmetter, Ph.D., is a member of Hay
Groups European leadership team and the
regional director, Europe, of its Leadership and
Talent Practice and regional director for the consulting practices across Europe. He works with
executives and top teams on leadership transformation, and he also publishes and speaks on
these topics. He is an alumnus of the German
National Academic Foundation, a member of
the German Sociological Association, and a
member of the German Society for Philosophy.
Yvonne Sell, Ph.D., is the director of Leadership
and Talent, UK and Ireland, for Hay Group,
where, as part of driving the leadership and
talent practice, she regularly provides press
commentary and conference presentations on a
wide range of leadership issues. She also works
with Daniel Goleman and Richard Boyatzis on
researching emotional intelligence.

tion, displacement, and economic damage from these

events will only increase.
At the same time, critical resources such as oil, rare
earth metals, and clean water are becoming scarcer.
Although there may be plenty of oil in the world, in
2006 the world passed the peak of oil supplied from
conventional sources. Rare earths, essential to modern
technology, have become more expensive and harder
to reach in recent years. A fifth of the worlds population suffers water shortages today, and the UN
predicts that fraction to grow by 65 percent by 2025.
To respond, organizations will need to organically
integrate corporate social responsibility (CSR) into
their operations. CSR cannot be a set of boxes to check
off after the fundamental goals of serving customers and shareholders have been met. Instead, it must
become part of companies DNA. To achieve this
transformation, leaders must exercise creative, strategic, and conceptual thinking to create the processes
and structures that will minimize environmental
impact.
Because the environmental crisis demands such
fundamental changes, leaders who excel at change
management will be in high demand. Leaders should
be especially skilled at executing transformational
plans by inspiring employees through visionary communications. Lofty language about environmental
responsibility will be less useful than translating environmental goals into practical, work-day guidance

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Leadership 2030

Georg Vielmetter and Yvonne Sell

about roles and performance. Leaders will also have

to collaborate across their organizations and with
external partners. Often they will have to find shared
solutions even with direct competitors.

way the brain develops. This reality has fragmented

the workplace because employees can now do much
of their work from anywhere, at any time. In so
doing, workers challenge the need for physical work
locations and traditional organiAccording to the IEA, new power stations that burn fossil fuels zational hierarchies. Leadership
must provide the robust and
are being built around the world at an alarming rate. At this secure technological infrastructure
rate, the global warming effect will be beyond 2C (3.6F) by to enable this method of work.

the year 2017. Two degrees Celsius is thought by scientists to be

the safety limit for avoiding truly catastrophic climate change.
The goal is to prevent average global temperatures from rising
more than 2C.
Responding to Emerging Affluence
The rising wealth of middle classes in countries
such as Brazil, India, and Indonesia exposes them to
ever more diverse cultural influences. These in turn
encourage people to express individualized tastes and
values. Large organizations will have trouble serving
balkanized markets, but agile companies can exploit
niches. Nevertheless, as options increase, loyalty from
both customers and workers will diminish. Younger
employees especially will want greater flexibility to
define their own work/life balance.
Indeed flexibility and openness should define leaderships response to these trends. For example, since
staff retention is no longer guaranteed, a leader should
learn to develop and maintain lasting relationships
not only with current employees but with former
employees who have moved outside the organization. Managing a diverse workforce means helping
team members appreciate each others strengths and
differences while treating each member as an individual. Flatter hierarchies and flexible work practices
will define the future.
Similarly, the structure of management should be
such that organizations can sense changes in the
market. Leaders should demonstrate a genuine curiosity about what makes each customer tick.

The Digital Era

Internet connectivity has become increasingly ubiquitous, no longer tethered to the computer or even a
WiFi connection. Today people are always on and
studies suggest that this phenomenon even affects the

Younger people, so-called digital

natives because they have grown
up not knowing a world without
smartphones, may be more comfortable with digital culture than
their older colleagues. Leaderships job is to bridge
the gap between old and new. They must help older
workers become comfortable with the new technologies while also acclimating digital natives to the
culture of corporate life.
Of course all of these things become more difficult
when employees do not share a physical space. But
leaders must find new ways to foster loyalty and to
manage and motivate teams that rarely meet.
The digital world also puts a premium on reputation
management. On the one hand, indiscretions that
might once have ended a career have been losing their
punch as ever more of them show up on Facebook
walls. On the other hand, the organizations reputation is always at risk in a world where anyone with
an Internet connection can disclose corporate peccadilloes. To defend against such incidents requires
openness, integrity, and consistency of values, words,
and deeds.

Demographic Megatrend
The rising world population is also getting older,
particularly in developed nations. This accelerating
megatrend is coupled with rising international migration; an aging population tends to pull young people
into the workforce.
Fewer working-age people will also intensify the
war for talent among corporations and even nations.
Owing both to demographic shifts and to younger
workers eschewing management, many organizations are having trouble finding quality leadership.
One strategy in this war for all kinds of talent must

Business Book Summaries April 19, 2014 Copyright 2014 EBSCO Publishing Inc. www.ebscohost.com All Rights Reserved

Leadership 2030

Georg Vielmetter and Yvonne Sell

be to diversify the search, recruiting people of various cultural backgrounds from around the world. HR
policies will evolve in response and managing diversity will become a core talent for leaders.

becomes essential. As in other areas, boundaries must

be dismantled to allow interdisciplinary work to
occur, and leadership needs to promote knowledge
exchange even with competitors.

Aging populations threaten the welfare states of the

West because of falling support ratiosthere are
fewer workers to support more retirees. Both the West
and China now face a future in which they will not be
able to perform as effectively in socioeconomic terms.

Finally, leaders must learn to live with the uncertainty

inherent in any new technology. They will need to
keep abreast of the relevant fields of endeavor and
the potential consequences for the company and its
customers, but they also must appreciate the highly
unpredictable nature of technological convergence.

Technological Convergence

Advances in the fields of nanValues-driven engagementchoosing your work, lifestyle, interotechnology,

biotechnology,
information technology, genetics, ests, and purchases according to your personal valuesgraduand robotics will drive innova- ally becomes the norm. As a consequence, people make decisions
tion. Nanotechnology, based on that challenge traditional societal structures and the cultural
the manipulation of individual
status quo.
atoms, has already created new
chemicals and materials. BiotechThe Perfect Megatrend Storm
nology, as ancient as traditional plant breeding, today
The megatrends will develop not in isolation but
encompasses genetic engineering, biochemistry, and
together in ways that create even greater challenges
bioprocess engineering. And cognitive science, though
for business leaders. There are five key reinforcers,
also a discipline with a long history, is on the cusp of
or consequences that arise from several megatrends
major breakthroughs in understanding the brain and
at once:
behavior. Each of these is an exciting area of the sci1. Stakeholder proliferation: The number of vested inentific frontier on its own, but combined together and
terests that need attention will multiply just as
with the application of information technology, they
leaders seek to simplify operations.
herald even more profound changes. For example,
nanotechnology, robotics, and biotechnology have
2. Power shift: Leaders ability to influence others will
all converged to develop tiny machines that can be
fall as that of the stakeholders rises.
injected into the blood stream to detect and eliminate
3. New working practices: New social practices take
illness. Some even predict the end of disease.
hold at work as mobile technology destroys the
Of course with technological advances comes any
boundaries between the personal and professional
number of ethical dilemmas. Some worry that nanoand as younger generations resist formal authority.
technologists might create a self-replicating army of
4. Cost explosion: The scarcity of talent and natural
bots that will rearrange all manner of material leavresources, as well as the high price of advanced
ing nothing but a gray goo in their wake. Where is
technology, will significantly drive up the costs of
the line between using genetic engineering to prevent
doing business.
birth defects and using it to create designer babies?
Because of the potential, or perceived potential, for
5. Ethicization of business: Environmental concerns,
harm, leaders must ensure that organizations innoworries over the societal implications of new techvate ethically. They need to keep an eye not only on
nologies, and digital-era transparency will detechnical advancement but also on the societal debate
mand that companies adhere to the highest ethical
surrounding new technologies.
standards.
New forms of collaboration within the company
and with other companies and academic institutions

These reinforcers in turn create four significant dilemmas:

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Leadership 2030

1. Mobility: Rising affluence creates demand for more

travel just as the environmental concerns and fuel
costs put limits on that travel.
2. Resources: Diminished resource availability coincides with an increased demand for resources.
3. Hierarchies: Individualization demands flatter organizations, but rising complexity calls for more
intricate organizational structures.

Georg Vielmetter and Yvonne Sell

Instead, it is relational and contextual. First, leaders are only leaders in relation to a set of followers.
Second, leader and follower are not fixed categories;
they depend on the context in which they operate.
Rather than a fixed skill set inherent in certain individuals, the authors define leadership as a social
practice, a communal activity that develops shared
knowledge and meaning.

The nature of leadership is at the heart of decades

of research by the authors. They note that the alphamale leader may realize success in the short term and
that a general view that equates
With ubiquitous Internet connectivity, the proliferation of egocentricity with leadership
may be allowing egocentric leadmobile devices, and the popularity of social networking, we are ership to outlive its usefulness.
now always on, at home and at work. This is eroding tradi- But it will prove ill-equipped to
tional boundaries between our personal, private, and profes- meet the challenges of the year
2030. The power shift from leadsional lives.
ers to employees, for example,
will
demand
dialogue
rather than the one-way style
As an example, the problem of stakeholder prolifof communication typical of egocentric leaders. The
eration creates a hierarchy dilemma. Gone are the
need for transparency and the ethicization of business
days when only customers and perhaps shareholders
will require leaders to be open and ready to listen
were stakeholders. Increasing diversity in the cusnot common traits of alpha-male leaders.
tomer base comes with globalization, and a growing
4. Horizons: Environmental challenges demand sustained action just as the digital era erodes patience.

desire for individualization follows global affluence.

Moreover, the workforce itselffrom line workers
to regional managershas become a diverse menagerie of stakeholders. Technological convergence adds
competitors to the stakeholder pool, and the environmental crisis makes a stakeholder of society at large.
To cut through this complexity, leaders must deliver
clear and consistent messages. But having a single,
global message violates the principle of glocalization.
In short, leaders face a difficult choice between the
opposing needs for greater organizational complexity
and simplicity.

A New Kind of Leader

Traditionally leaders have been alpha males who put
themselves at center stage and lead either through
coercion or pacesettingthe practice of showing
people that they are the best players on the team. This
model is based on a false picture of the nature of leadership and will suffer in the face of the megatrend
perfect storm.
Research shows that leadership is not a set of fixed
attributes possessed only by certain individuals.

The leaders of the future will have to be altrocentric

rather than egocentric. A focus on and concern for
others defines the altrocentric leader. This does not
mean that altrocentric leaders will be unremarkable
beta males. They will have confidence and strong
personalities, even strong egos, but they will also
know when to keep their egos in check.
The core competencies and skills of the altrocentric
leader begin with an appreciation of the interdependent nature of power. Rather than merely exercising
independence, altrocentric leaders understand the
importance of interdependent power, power that
relies on others. They take a longer view, recognize
the ambiguities of leadership, and empathize with
others even when they do not share their goals.
Such empathy is a core competency of intellectually
curious, emotionally open, and mature altrocentric
leaders. They also value high ethical standards and
diversity. They exhibit contextually aware strategic
business thinking through stakeholder recognition.
Through their interactions with stakeholders they
create meaning, rather than merely providing meaning.

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Leadership 2030

Finally, in executing strategy, altrocentric leaders will

provide bounded autonomy and share authority with
a strong leadership team rather than trying to operate
alone.

Developing Altrocentric Leadership

No specific steps will transform an individual into
an altrocentric leader. Therefore, rather than a set of
prescriptions, the authors conclude with twelve sets
of questions leaders can ask themselves. Answering
these questions begins a perpetual journey toward
altrocentric leadership:
1. What is your self image? Self knowledge is a fundamental first step. Do you consider yourself a
leader? Are you able to overcome stereotypes?
Can you question your own preconceptions?
2. What drives you? Appreciating underlying motivation is key to developing the kind of socialized
power that undergirds altrocentric leadership.
What motivates you to go to work every day? Do
you try to develop others strengths?
3. How well do you know yourself and your limitations? Self-awareness and self-control are key
emotional competencies for the altrocentric
leader. An emotional intelligence assessment or
psychometric test can help reveal psychological
traits. Are you aware of your limits? Are you in
control of your emotions?
4. Are you open? Are you a curious person? Do you
listen carefully to others? Social awareness and
empathy are also critical emotional competencies.
5. What leadership styles do you use? Altrocentric
leaders draw on a wide range of styles. Again,
diagnostic tools can help uncover your own. Do
you share the big picture and provide clarity for
people? Do you rely on command-and-control?
6. How broad is your perspective? Do you scan the
horizon? Do you incorporate all stakeholders?
Altrocentric leaders depend upon strategic thinking, which demands a broad perspective.
7. Do you create loyalty and manage reputations?
Do you value people as individuals, recognizing
the needs of different generations? Do you appreciate the implications of digital transparency on
the organizations reputation?

Georg Vielmetter and Yvonne Sell

8. Do you engage in meaning-making with colleagues? Do you know your organizational narrative? Do you know what creates meaning for
your co-workers? Employee engagement surveys
can monitor the alignment and engagement of the
workforce in the meaning-making process.
9. Do you collaborate and partner with others? Paying lip service to teamwork is not enough. The
megatrends of technological convergence, climate
change, and resource scarcity will all demand increased collaboration. Are you willing and able to
share power?
10. Do you take ownership of the human resources
of the organization? Altrocentric leaders focus on
people first. They recognize the strategic value of
HR and keep personally engaged with the key
people issues.
11. Do you provide bounded autonomy? Leadership
must provide freedom of action to achieve the
flexibility necessary to face a fast-changing world.
Do you ensure that such freedom is provided
throughout the organization?
12. Have you created the right top team? The top
managers must function as a team and the leader must provide the development feedback and
coaching to achieve that end.
g g g g

Features of the Book

Estimated Reading Time: 23 hours, 244 pages
Leadership 2030 reviews the six global trends that
will shape the nature of leadership for the foreseeable future. Drawing on their experience and research
with the Hay Group, a global management consulting group, the authors explain how current trends
will work together to demand ever greater levels of
openness, emotional intelligence, and comfort with
complexity. Each of the first six chapters reviews a
particular megatrend, followed by a chapter that
explores how these trends will reinforce one another.
The final chapter describes the model of altrocentric
that will define effective leadership in the future. The
conclusion offers a set of questions and tips to begin

Business Book Summaries April 19, 2014 Copyright 2014 EBSCO Publishing Inc. www.ebscohost.com All Rights Reserved

Leadership 2030

Georg Vielmetter and Yvonne Sell

the journey toward altrocentric leadership. Anyone in

a leadership position will find much value in the book,
which is best read cover to cover. The confluence of
megatrends will disrupt traditional management,
so this book is a good place to start for anyone who
hopes to thrive by adapting to new realities.

Contents
Acknowledgments
Introduction: Empire and Manure
1. Lost in Translation: Globalization 2.0
2. Less Is More: The Environmental Crisis
3. Power to the Person: Individualization and Value
Pluralism
4. Remote Possibilities: The Digital Era
5. Social Insecurity: Demographic Change
6. Great Expectations?: Technological Convergence
7. Reinforcers, Dilemmas, and the Perfect Storm
8. Footnotes, Not Headlines: The Altrocentric Leader
Conclusion: The Journey to Altrocentric Leadership
Endnotes
Index
About the Authors
g g g g

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