21st Century Skills

Our 20th century thinking is outdated. Now more than ever, business leaders need to complement analytical skills with imagination, inclusion, and qualitative judgment.

 

Business and policy leaders might view the past 20 years as evidence that the world is becoming what many describe as volatile, uncertain, complex, and ambiguous—or VUCA. Evidence for this perception started at the turn of the century with the threat of global terrorism in the post-9/11 world. Then came the global financial crisis, where society teetered on the brink of an economic depression. Now, we face a once-in-a-century pandemic, which has disrupted nearly every aspect of our lives.

These events presented unique leadership challenges. However, more research, including our own, suggests that the problem with managing in a VUCA world stems not from our struggle to keep up with an ever-changing external environment, but from our outdated 20th-century thinking.

 

 

 

 

 

 

 

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Most business leaders who pursued management degrees in the 1980s and ’90s were trained in scientific management theory, a powerful philosophy that was critical to 20th-century economic development. First introduced in the early 1900s by Frederick Taylor as a way to optimize large-scale manufacturing, this foundational theory emphasizes managing inputs and outputs to ensure optimization and efficiency. This approach has benefited society greatly, because it shifted business leaders away from using haphazard guessing to drive their business decisions. It instead encouraged them to adopt evidence-based approaches that led to more effective allocation of resources.

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However, many critics believe Taylor’s reliance on efficiency is unsuitable for today’s fast-moving business environment. Take, for instance, the flawed rollout of the COVID-19 vaccine. While the world’s reliance on scientific management contributed to the rapid development and deployment of the vaccines in many advanced economies, it also led to the vaccines’ erratic and inequitable global distribution.

Many business leaders have blamed VUCA for the distribution problems. But the truth is that scientific management is too narrow a tool to address problems that require ethical leadership and pragmatic imagination.

It’s time for us to revise our thinking. Scientific management is necessary, but cannot on its own support effective management and leadership in the 21st-century business environment. We must now turn to other disciplines—history, literature, philosophy, and the arts—to inform our decisions. In these disciplines, thinking is dominated not by the desire to maximize efficiency and outputs, but by the need to fully understand how the world works.

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There is a reason why Leo Tolstoy’s War and Peace cannot be reduced to a tweet, just as there are reasons why great works of art can generate in us such a wide range of experiences, emotions, and ideas. If leaders are to address VUCA challenges that arise over the next century, they must adopt alternative theories. Today more than ever, the world needs its leaders to leverage far more nuanced skills. Three, in particular, are critically important: imagination, inclusion, and qualitative judgment.