Some principles of great leadership never change--but others do, in response to evolving technology and work force demographics. Here are three timely leadership tenets to keep in mind for the new year.

1. Innovate relentlessly around your value proposition. You're thinking: Yeah, I already know that. But too many leaders aren't doing it, says Patrick Stroh, author of the newly released book Advancing Innovation: Galvanizing, Enabling, and Measuring for Innovation Value. "If you're not reinventing your value proposition every three to five years, you'll become irrelevant," he says. 

You need to take steps toward making sure you're innovating at the proper pace. For starters, listen directly to your customers to learn about the weaknesses in your current value proposition. Ask them: If we developed this idea, would you be thrilled?

Also, don't feel as if every innovation has to be a game changer. Stroh is a fan of the innovation approach used by Malibu, the boating manufacturer based in Loudon, Tennessee. At Malibu, inventions can fall into one of three buckets: breakthrough, distinctive, or incremental.

Just because an innovation falls into the distinctive or incremental bucket doesn't mean it's not a great way to revamp a value proposition. In Malibu's case, an incremental innovation might be reclining seats, a stereo equipped with Bluetooth, or a no-spill cup holder. None of these is redefining or "disrupting" the boating industry. But they are all innovations that Malibu's core customers have been happy to pay for.

"It's smart, because they don't bet everything on one big idea. They do a broad range," says Stroh. "A lot of businesses miss out on smaller, profitable ideas, because they're trying to be the next Uber."

2. Anyone in your organization can be a leader. Here's another one you've heard before. This time, you ought to pay attention, because office cultures are becoming more democratic. Flat organizations and systems like holacracy define employees by their role, rather than prescribed title. Collaborative technologies like Slack prevent the hoarding or siloing of information on the basis of an employee's department or position in the hierarchy. There is even a body of academic research downplaying the CEO's impact on a company's performance. 

What's more, leadership is no longer being taught in business schools the way it used to be. The definition of leadership is shifting from what you could call the Steve Jobs model--the veneration of a singular individual who is founder and CEO--to a definition that has almost nothing to do with your name or station.

"We start with a fundamental premise: that leadership is an action," says Jeff Klein, executive director of the Wharton Leadership Program. "Leadership can be contributed by any member of a team or an organization. It's that set of actions that will align, excite, or propel a group toward a common goal. It's not the sole responsibility nor the sole right of those in positions that carry authority."

In other words, you're a leader if you're good at spurring successful collaborations. Simple as that. To explain the difference between old-school leadership and new-school leadership, Klein borrows a metaphor from the Harvard Business Review article "Understanding 'New Power'" by Jeremy Heimans and Henry Timms. 

As the authors describe it, old power is like a currency. Held by few. Jealously guarded. Closed, inaccessible, and leader-driven. By contrast, new power is like a current. Made by many. Open, participatory, and peer-driven. Like water or electricity, it's most forceful when it surges. The goal with new power is not to hoard it but to channel it.

"Leadership, if you really think about it, has nothing to do with titles and org charts and everything to do with the ability to influence people," adds Harry Kraemer Jr., clinical professor of strategy at Northwestern University's Kellogg School of Management and former CEO of Baxter International, a $12 billion global health care company. Kraemer believes that a leader with an understanding of new power will have an edge when it comes to retaining young talent. "The younger generation of employees have the desire and need to feel part of something--and to know what they're doing is worthwhile," he says. "They won't stick around if they don't think the right things are happening." 

Where does all of that leave you, if you're a leader with old power but you want to helm an organization that embraces new power? Klein suggests you alter your thinking about hiring, talent assessment, and leadership development. Instead of focusing so much on an employee's individual talents, evaluate the way your employees collaborate with others--especially across departments and hierarchical strata. Also, consider which employees always seem to be a part of successful teams and projects. Who are the teammates everyone else wants to work with? Those are your organization's leaders, regardless of what their titles are. 

3. Recognize that small data is just as powerful--if not more so--than big data. Fashionable as it is to decree that 2016 is the era of analytics, there is no substitute for the firsthand observation of customer behaviors. Sometimes, a close study of 30 or 40 customers can tell you far more than what you'd learn by crunching the data of a million customers, says branding expert Martin Lindstrom, whose book on the subject, Small Data: The Tiny Clues That Uncover Huge Trends, is due out in late February.  

Lindstrom's client list is long and impressive. It includes McDonald's, Nestlé, Procter & Gamble, Lego, Cisco, the Walt Disney Company, iRobot, Red Bull, Unilever, Coca-Cola, and Lowes. And in almost every case, he says, he has to convince a board or a leadership team that what he and his team have noticed--by closely watching a small set of customers--is often more insightful than what you'd learn from a sophisticated set of analytics. 

For example, Lindstrom's work helped turn Lego around in the 1990s. He and his team observed that an 11-year-old boy was exceptionally proud of the beat-up sneakers he used while skateboarding. The particular scuffs and usage marks of the sneakers, the boy said, were evidence--to anyone who knew anything about skateboarding--that he was an exceptional skateboarder. This exchange, seemingly unrelated to Lego, helped Lindstrom and his team realize that social proof--a form of storytelling--was the lifeblood of Lego's target customers. By revamping its online-offline strategies, Lego found a way for kids to share the stories of the Lego structures they'd designed and built. Lego once again has become as beloved as a kid's favorite old pair of sneakers. 

How can today's leaders bake such attention to customer detail into their everyday business? "It's very simple, actually," says Lindstrom. "When you hire a new employee, the starting point should be to force them to spend time in a consumer's home. Just like you have an onboarding process with [new employees] running around the office and seeing everything." Ideally, he adds, the new employee will spend one or two days in a customer's home, preferably with a long-term employee from the company as a guide and sounding board. "This makes everyone get away from their screens," he says, "and wake up to the customer reality." 

Published on: Dec 28, 2015