Friends,
I hope that all is well with you and yours, and that this e-mail finds you on a boat with shoddy connection, in the tropics, three months after I sent it.
In today’s guest columnist newsletter, my co-author Steven McCrone discusses leadership, the difference between living in a zoo and surviving in the jungle, and what ultimately matters.
Now accepting keynotes for 24Q4-25Q2
Every year for the last decade or so, I have created three main presentation decks. For 2025, however, I have (for the first time) added a fourth due to popular demand. They are:
What to Do When You Don’t Know What to Do: How to turn change into a competitive advantage. (Based on the new book by the same name.)
Leadership in a Time of Change: How to steer an organization through a sea of uncertainty.
Resilient Retail: How to build a profitable retail business in the modern marketplace. (Based on the 2025 follow-up to the highly praised 2022 white paper The Gravity of e-Commerce.)
Artificial Intelligence Beyond the Hype: How to understand the narratives, risks, opportunities, and best uses of a new technology.
If you want to book me for your event, corporate speaking slot, or workshop, merely send me an email. To make sure I am available, please do so at your earliest convenience; my availability is limited and the schedule tends to fill up fast. More information may be found here.
A couple of updates before we go-go
Once every blue moon, you are subjected to a pitch that is spectacularly uneducated in every detail; a disasterpiece of a business proposition so epic in proportion that one can only stand back in awe. Such was the case recently, when I was introduced to an agency that claimed to be able to predict human behavior “with 89% accuracy”.
It is, of course, a pointless claim without any added context. To illustrate, if I attempted to predict precisely what actions you would take across the course of a randomized day, I would come nowhere near that figure - nor would anyone else, for that matter. If I, on the other hand, were to predict what you would do if I hurled a large rock at your head, I would probably be right more than wrong.
Once I did a bit of research, I learned that what the agency in question actually did was to extrapolate brand tracking in real-time. For those who without marketing training, I can inform that doing so is entirely pointless. Partly because the zoomed-in figures vary depending on the people polled, but also because the zoomed-out pattern is such that the metrics (as a rule) barely move over the course of a year. This, in turn, is because perception is tied to penetration and market share; the more buyers you have, the more respondents will know of your brand.
Extrapolation is in and of itself also daft, particularly if you have a lack of data points. To reuse my favorite example, in 1977, the year when Elvis Presley met his untimely demise, there were 177 Elvis impersonators in the world. By the year 2000, there were 85,000. If one extrapolates these two data points - using exactly the same kind of formula and methodology that is standard practice - one will find that by March 3, 2031, every single person on the planet will be an Elvis impersonator.
In other words, if you encounter claims such as that made by the agency in question, run the other way and do not look back. Or at the very least, use expletives as you brusquely show them the door.
A couple of quick notes on the markets:
The Fed, as even nomadic tribes living in the far reaches of the large deserts must know by now, decided to cut the interest rate half a percentage point - which has caused a long line of big bank financial analysts (and small bank financial analysts looking to mimic them) to start talking about the certainty of a new “cycle”. This implies that once a cut is made, several more will automatically follow until the rate is as low as the market allows, after which several increases will be made until the rate is as high as the market allows, and so on.
If we (as one should) ignore the narrative and instead look at the emergent patterns over the last few decades, that is not how it usually goes. History shows that interest rates seldom move down, or up, in a smooth and predictable path. What instead tends to happen is that the Fed forecasts one likely path and then ends up doing the complete opposite the moment circumstances change.
Jason Zweig recently noticed the same thing. As he wrote for the WSJ, the Fed’s last policy meeting in 1993 gave barely a hint that interest rates might need to rise. Then, starting in February 1994, the Fed began jacking up rates like mad. Its policy meeting in August 2001 suggested that "the easing process probably would have to be terminated...relatively soon", but then the terrorist attacks of Sept. 11, 2001 forced the Fed to slash rates. In 2020 and 2021, the Fed insisted inflation would be "transitory" only to end up, in 2022, slamming investors with one of the sharpest sets of rate hikes in history.
Put differently, assuming that one cut heralds the beginning of a predictable decline (regardless of what might happen in the world) is not much better than an agency extrapolating real-time brand tracking data. Cycles are rarely so uneventful - something worth keeping in mind for any firm looking to secure capital.
Speaking of central banks, the People’s Bank of China announced a plethora of measures to support the country’s underperforming economy, stimulate the stock market, and help the real estate sector. This included cutting the interest rate, lowering the amount of cash that banks need to hold in reserve (theoretically enabling more lending), offering close to $70 billion in loans to funds, brokers, and insurers to buy Chinese stocks, reducing the rate on existing mortgages by half a mortgage point, and covering all loans required to fund local governments’ purchases of unsold real estate inventory. You cannot say that they are not trying.
If the Chinese economy kicks back into gear, it will have a significant impact on the world economy (the country represents, as far as I recall, around 13% of the global GDP). If you work for large international, it is worth staying up to speed on whether the measures have the desired effect; it will affect your business.
Moving on.
JP’s note: our guest writer du jour is none other than my co-author Steven McCrone. In a world filled with management consultants whose combined understanding of the business reality would fit on the backside of a postage stamp, Steve is the polar opposite; an expert in the true sense of the word. He also happens to be a pioneer in risk management, have a strategic mind that few can match, and is an all-round lovely guy. Today, he goes deep into the challenges of modern leadership. In accordance with the 3-1 cadence, this newsletter is available for all subscribers.
The Leadership Trap
“It is hard to survive in the jungle when you have been trained in a zoo.”
Sonja Blignaut
Organizations invest a lot of money in leadership development programs that, while well-meaning, ultimately create leaders who struggle to apply their new knowledge and skills in the real world. The primary reason for this is that the programs are delivered in the ordered, comfortable environment of the classroom; the case studies and behavior-based approaches used are entirely isolated from the rest of the organization.
It is, to re-use a metaphor by our colleague Sonja Blignaut, akin to taking a zoo-based approach to the management of animals. Patterns of life in the zoo are predictable and repetitive. Animals are fed at specific times, enclosures are cleaned, and species are kept separated. Over time, they become domesticated.
Leaders, similarly, have been taught to think and behave differently, but have no experience or training in how to interact outside of the safety of the cage; they lack situational awareness and adaptive capacity.
The rather serious problem is that, as most people know, you can’t just release zoo animals into the wild and expect them to survive; they do not know how to compete for resources, avoid predators or catch prey. Inevitably, therefore, they soon die.
The business world is a lot more like the jungle than the zoo.
Where do leaders come from?
The idea of a leader has been around for all of human history. Tribes have a leader; hunting parties have a leader. The concept is well understood, even though it remains difficult to define in precise terms. However, leadership – the study and practical understanding of leaders - is not only poorly defined, but mostly misunderstood.
The word is a relatively recent invention; it was not widely used before the late eighteenth century. At that time, society shifted from the unquestioned authority of kings, queens and feudal lords, to a more function-based relationship between elected officials, factory owners, and what one might call the common people. A new word was needed to describe this novel relationship.
Of course, language evolves as words are put into new contexts, and constantly interpreted and re-interpreted. Unsurprisingly, so also was the case for leadership, as a brief trip back through time reveals.
The birthright
In pre-first World War society, there was a very firm belief that leadership was a property vested in a social class. By pure coincidence this was the same social class where wealth accumulated. The time was thus one of “the great man” concept of leadership; it was a function of good breeding, and good breeding lead to the personality traits and behaviors that made leaders. That is to say, leaders (mostly males) were born and leadership was simply one of the things that those leaders “did”.
The trait theory
As more and more ‘leaders’ were gunned down in the European trenches, it became apparent that new leaders had to be found. Maybe leaders weren’t born after all? Perhaps leadership emerged due to a set of personality traits? The study of leadership shifted away from a few select individuals and instead began to focus on a set of general characteristics that, if learned and adopted, would increase leadership performance. Unsurprisingly, these traits included gems such as:
Honesty
An ability to be forward looking
An ability to be inspiring
Courage
Straightforwardness
Intelligence
A fair mind
Individuals displaying these traits would emerge as leaders; the cream would rise to the top. Unfortunately for trait theory, it was debunked in the 1940’s when research found that no single trait or group of traits was correlated with leadership.
The behavioral paradigm
In the 1960’s and 1970’s, attention shifted to what leaders do as opposed to who they are. If leadership wasn’t vested in the individual, maybe it was created by the interactions between leaders and subordinates? The question gave rise to the behavioral paradigm in leadership development.
Under this paradigm, researchers would identify a set of typical behaviors found in seemingly effective leaders, or a set of differences in behaviors between poor leaders and effective leaders; aspiring leaders could then be taught to emulate the “correct”behaviors and improve their leadership. Subsequent leader behavior could also be assessed against this newly minted “best practice” and corrective action be taken.
The simplistic model of leadership that followed was one easily codified, copied and repeated. It also enabled leadership training to be delivered in the classroom by people with little to no real-world experience. This represented a huge benefit in terms of efficiency and cost, which in turn meant that consultants loved it. As a result, the corporate world experienced a rapid rise in the market for leadership training. All companies had to do was to follow the recipe. Behavioral approaches to leadership turned into the conventional wisdom.
Soon, however, organizations started to realize that a single leader’s behavior didn’t occur independently of group behaviors, nor did it cause a particular group behavior in a uniform and predictable way. The problem was, and unfortunately remains, that conventional wisdom moves at a pace much slower than that of empirical evidence - and this was been proven true yet again, somewhat unsurprisingly given how many made (and still make) money from behavior-based programs. Indeed, despite the apparent lack of practical usefulness, a large number of organizations still anchor their training on the behavioral paradigm to this day, fully “supported” by the consulting community.
Culture and transformation
In the late 1980’s and 90’s, the focus shifted from the individual and the group to the “organizational culture”. Perhaps good leadership was expressed not as a function of group productivity or output, but rather a more amorphous concept? The focus of leadership subsequently thus shifted from extrinsic motivation to intrinsic motivation. An organization with a “good culture” would not only be more productive, but people would enthusiastically embrace their work. Employee engagement started to become a focus for aspiring leaders.
In this paradigm, the task of the leader was to establish a clear vision and mission for the organisation, and then focus their attention on empowering individuals and teams to achieve them. Leadership was a function of inspiration, charisma and proactive decision-making.
In fairness, there is merit to this paradigm of leadership in that it acknowledges that leaders cannot directly influence the organization through their social status, decrees, traits or behaviors. Rather, they may do so by setting expectations, managing constraints, and acting to amplify positive outcomes and mitigate negative outcomes.
Unfortunately, though, most aspiring leaders are also taught to plan and lead in a way that ultimately traps them in the zoo. They lack the situational awareness needed to be adaptive and responsive. As Sonja once wrote, we have “ended up with siloed organisations filled with complacent, cynical and disengaged employees who have become “domesticated” to such an extent that they simply do what they’re told or what they’re measured on. This may have been acceptable when people weren’t expected to bring their creative selves to work and mostly had to engage in routine work; but now, in a world where automation and AI are replacing these kinds of roles, it simply won’t do. In this so-called creative economy, we need inspired, creative and thoughtful employees. We need people who are situationally aware, able to spot risks and opportunities and make wise decisions.”
The most common traps
Today, leadership training, coaching, and so on, has become a saturated market. Whatever your particular fancy, there will be someone willing to satisfy it. Knowing who to trust can consequently be difficult. Having said that, there are three groups of consultants that you want to steer clear of:
The Slide Deck Experts
As noted above, people who teach leadership often lack the relevant practical experience. But while anyone could teach the theory of bike riding if they had the appropriate slide deck, no one ever learned to ride a bike in the classroom from understanding the relevant physics. Even though the training is delivered in a coherent and confident way, aspiring leaders therefore inevitably struggle to apply the domesticated zoo version of leadership theory in the jungle of the real world.
This is true even though the programmes have been developed by “experts” and delivered by people trained in facilitation so long as they lack any real experience in the application of the theory. A tell-tale sign is the one size fits all approaches that have little room for detecting and responding to context; the success of the program is measured by the retention of the knowledge as opposed to the application of the skills.
The ex-
There are also those who do have real world experience, but often lack context. The best example is the proliferation of ex-military leadership trainers who, through years of working with subordinates over whom they hold immense power, have come to believe that they are anointed with special leadership qualities - and that these qualities can be distilled and sold through an intensive leadership program.
Oftentimes, these “leaders” cannot shift the context away from their previous military experience. When I was an officer in the army, as a bomb disposal expert, if I gave a lawful order, it was literally illegal for a subordinate to refuse to follow it; that I was the youngest and least experienced member of our platoon did not matter. It would be easy for my ego to confuse begrudging compliance with motivational leadership.
Leading with this kind of immense directness might have be useful if the tasks were clear, and the outcomes were safe and predictable. Our context was different. When we were conducting bulk demolitions involving tonnes of high explosives, there could be a dozen or more soldiers preparing the demolition site. Any one of us could make a small mistake that would kill everyone. So, I had to cultivate a leadership style that kept the soldiers focused on the task but provided the psychological safety necessary for even the most junior soldier to be able to point out potential problems, raise concerns and ask questions. Unquestioning compliance could be deadly.
The military is, in other words, a really good place to learn leadership, but copying what works in one context and expecting it to work in another is dangerous. Leaders need to understand how to navigate changing contexts and adapt their style to suit.
Hero worship
Leadership inspiration can easily turn into hero worship. We all know of leaders who were thought of as saviors, conquerors, and winners (most of us also know leaders who would like to thought of as such), but one must be careful not to fall victim to halo effects and confuse great results with great leadership; luck has a part to play, but context is far more important.
The term charismatic leadership is relevant. A solid non-leadership example is the hero worship of Warren Buffett, the chairman and CEO of investment company Berkshire Hathaway. There is a huge amount of information, fact and fiction available on the internet about what Warren Buffett does or does not to in order to grow his wealth. Has copying his approach led to a proliferation of billionaires? No. Buffett is undoubtedly a very skilled investor, but copying his methods without understanding that the context of his journey is unique and non-repeatable is unlikely to lead to success. Statistically speaking, you are far more likely to go bankrupt than reach even close to his level of wealth.
Copying heroic leadership harks back to the “great man” era. You can celebrate their success, but you can’t copy their journey.
What to do instead
As we have established, leadership training that focuses on behaviors, fictionalized case studies, and one-size-fits-all models treat those in their audience as if they were animals in a zoo. Their advice may be fine when the world is calm and predictable, when change is planned for and controlled, and the response to unexpected events is to “get back to normal”. But the real world is wild. In a fast changing, complex and uncertain world, leaders can’t just share a vision, establish a mission and focus on culture. The ground is shifting, missions need to change; what works today may not work tomorrow. Leaders need the skills and techniques that allow them to embrace this uncertainty and turn it into a strategic advantage.
As a result, people such as JP and myself developed adaptive strategy to provide the organizational infrastructure needed to be adaptive and responsive to change. Activation of an adaptive strategy means that leaders need to learn the skills that allow them to survive in the jungle. The adaptive strategic approach is premised on a view of leadership that isn’t constrained by the conventional wisdom.
Instead, we take the scientifically established view that leadership is an emergent property of the interactions between people and systems. Behaviors, intentions and traits play a part, as does the situation; it is all dynamic. At AGLX, we teach complexity thinking as part of the adaptive leadership approach. Leaders need to understand how to shift their response based on the context of the situation and lead in the moment.
Certainly, universal principles may exist (though one should stress that principles and precise instructions are two different things). One often hears organizations talk about specific leadership situations such as safety leadership, leading change, leading culture, project leadership, etc. In adaptive strategic leadership, we think about these situations as substrates on which leaders get to practice, learn and develop their leadership skills. The notion that safety leadership is different from leading change may be good if you are selling safety and change programmes, but in reality, these are just different opportunities to utilize the same foundation. The context and technical skills needed are different, but the principles of leadership remain constant.
Understanding the underlying principles and their supporting science properly enables the starting point of contextual adaptation, after which experience may be built. To illustrate, a chef has a deep understanding of food, taste, heat, and so on, and can use this to create unique recipes or substitute ingredients depending on what is available. A recipe book follower has precise instructions, but no capacity to adapt if an ingredient or utensil turns out to be missing.
The key lies in application. It has to. And as such, all that which leadership encompasses cannot be learned in the classroom.
So, at the end of the proverbial day, whether you are teaching leadership or looking to take a course, remember that one cannot train animals in a zoo and then release them into the wild. Theory matters, but the most important thing is to implement it in practice; to figure out what is relevant to the context and how to adapt. To live in the jungle that is the corporate reality.
Ultimately, even though the same or similar principles may apply, everyone’s leadership journey is unique.