Working with senior leaders in both a coaching and cultural development capacity, I often draw on the concept of leadership ego maturity to help explain and dig into the leadership, management, and cultural challenges their business is facing. For example, cultural issues such as lack of accountability or being overly self-serving can, at least in part, be explained by referencing the typical levels of leadership ego maturity in the organization[1].
Increasingly, conventional (i.e., lower levels of ego maturity) leadership has limitations navigating the complexities, demands and uncertainties of modern organizational life. These include parental leadership styles, prioritizing short-term KPI’s over sustainable success, having an over-reliance on rules not principles, and a focus on stability at the expense of agility. Today we operate in a beyond profit VUCA (volatility, uncertainty, complexity, and ambiguity) landscape and our most successful leaders (e.g., Elon Musk, Bill Gates, and Nelson Mandela) have/had postconventional levels of ego maturity – they are transformative, principles driven, systemic in their thinking, deftly manage the paradoxes, and are focused on serving society (as well as their shareholders).
With reference to Torbert’s framework, this article looks at why postconventional leadership is increasingly important for personal and societal success in a beyond profit VUCA world, as well as some priorities to support the development of postconventional leaders.
Leadership Implications in the Beyond Profit VUCA World
Stakeholders, including shareholders, customers, communities, and employees are seeking more than profit from commercial enterprises. They are placing ever greater emphasis on societal and environmental impact. This is driving a significant shift in organizations, who are increasingly taking accountability for their ESG (environment, social, and governance) responsibilities. This trend is best encapsulated by the shift from profit centered to purpose centered mindsets (i.e., serving society).
There has been a step change in attitudes towards ESG across society. Consumer and generational etc. activism is creating sustained beyond profit pressure. Major institutional investors e.g., BlackRock are increasingly assessing ESG factors as a predictor of sustainable profitability. Business leaders are both impacted by and are part of this activism. The net result is self-reinforcing and the drive to be purpose driven will continue to pick up pace.
In parallel, organizations are dealing with a plethora of threats from technology, the geopolitical landscape, disintermediation, and new business models. The VUCA world is unrelenting; most recently we have seen the scrabble by businesses to deal not only with the threat of the launch of generative AI but also the speed with which many have adapted to build competitive advantage (e.g., Canva and Shopify’s customer service bots). Indeed, Goldman Sachs contends that generative AI will result in up to 300 million jobs being lost or diminished with reinvested costs driving an uplift in GDP of 7%. Regardless of the eventual impacts of generative AI etc., the pressure on leaders to be transformational, for employees to be self-starting, for businesses to be agile and for organizational structures to be more fluid is uncompromising. These trends place pressures on the ego maturity of all employees and leaders if they are going to contribute fully to their personal and their organization’s success.
Tobert’s Leadership Transformations
Torbert’s Leadership Transformation model offers deep insights into understanding the stages leaders go through in their journey to reach their full leadership potential. Tobert’s theory belongs to a family of life-stage development theories that broadly map onto one another (Piaget, Kegan and Loevinger). By exploring the different stages of ego maturity we can build a picture of how leaders understand the world, how their assumptions shape their actions, their strengths, and limitations in a beyond profit VUCA world.
Typically, leadership development focuses on the acquisition of new knowledge, skills, and abilities. This type of development is broadening and deepening. In contrast, ego development theories focus on how our map of the world matures over time, with each stage of maturity building on and subsuming the previous stage. At each stage, leaders understand the world through a different set of Action Logics/assumptions. The use of different Action Logics results in changes in meaning, ethics, goals, judgements, and general experience of the world. Metaphorically, increasing a maturity level is like navigating with a more accurate map that helps in finding a safer and faster way across an infinitely complex landscape. It is not quite so straightforward, however; there are downsides when the map is too complex for the situation at hand and circumstances e.g., stress can still force us to use a suboptimal map.
The archetype of leadership at the more conventional end of the spectrum (Diplomat, Expert and Achiever) is a focus predominately on ‘self’ and the delivery of performance metrics. Leaders view their roles as bound by a defined set of accountabilities. The downsides of this narrow focus are short-termism, the need to ‘fit in’, preservation of the status quo, a focus on rules, slow responsiveness, and lack of flexibility to respond to changing requirements. At the more mature end of the conventional spectrum, leaders are effective at driving efficiency and performance within their defined operating environment.
Indeed, to thrive in a beyond profit VUCA world, the onus is on all employees to transcend conventional levels of ego maturity. At the conventional stage of ego maturity, employees are mainly focused on personal success and not that of their business or indeed wider society. So, there is a clear mismatch between values/behaviours and organizational expectations. Most of us, of course, are asked to adopt postconventional behaviours i.e., be ethical, make principle-based judgments, align our actions with changing business strategies, coach our teams, build safe environments and agilely respond to customer needs, emerging risks and opportunities.
Postconventional Leadership
Torbert identifies three postconventional leadership archetypes – the Individualist, the Strategist, and the Alchemist. The following section explores the strengths and weaknesses of each in the beyond profit VUCA world.
Individualist leaders are driven by personal authenticity and their independence of thought. They are effective at challenging organizational norms. Consequently, they can be effective at promoting ideas that challenge the status quo and at driving organizational change. Importantly, they align their actions in support of organizational strategy, effectively bridging the performance/strategy gap.
The Individualist’s focus is too narrow to comprehensively integrate and balance ESG considerations, profit, and strategy etc. Under these conditions, black and white judgements are too coarse, and fine trade-offs need to be made to successfully drive, navigate, and implement strategy. Their difficulties are compounded by their incomplete consultation, which can provoke resistance against their plans, and their emphasis on authenticity (true to themselves), which can lead too strong a personal perspective being taken so that their actions do not align sufficiently with the consensus view.
In a beyond profit VUCA world Individualist levels of ego maturity are suboptimal for success in senior leadership positions. Although development strategies should be in place to help as many employees as possible to reach at least this stage of maturity.
Strategist leaders are attuned to the complexities of a beyond profit VUCA world. Primarily they view their organization as mutable and, as a result, are less constrained by custom and practice. They are collaborative, inclusive and create shared meaning through comprehensive dialogue and enquiry. They deal effectively with resistance to change resistance and effectively leverage the collective thinking of all stakeholders. Consequently, they navigate complexities adeptly and make effective organization transformation leaders. They are attentive to both the short and long-term demands - effectively balancing short-term performance requirements with long-term sustainability. Further, they take a system-wide view and, consequently, they align organizational goals with ESG considerations.
The Strategist’s mental map is attuned to personal relationships, organizational relationships, and the macro global environment. They are driven by social conscience and are highly ethical. The result is a more principle-based mindset that guides decision making beyond personal and organizational needs when compared to an Individualist leader.
Strategist leaders are the first level of ego maturity that has a keen ability to analyze and synthesize information from diverse sources. Their systems-thinking capability allows for a more holistic perspective and balanced trade-offs between competing priorities, and hence they drive a sustainable beyond profit future.
Alchemist leaders are at the pinnacle of leadership ego maturity in Torbert’s framework. Their map is attuned to transforming the material, societal and spiritual realms for the greater good. Consequently, their focus extends well beyond profit; they have a comprehensive view of the role organizations needs to play to fully serve and positively transform society. They engage fully with all other leadership ego levels, identifying organizational tipping points, and creating metaphors that resonate across their organizations aligning the activities and efforts of all stakeholders. As such, they have a remarkable capability to reinvent their organizations without being overly hampered by their historical business model.
Alchemists are focused on the truth and possess high moral and ethical standards. They have a deep sense of purpose and are driven by an overwhelming desire to make a meaningful impact. They are adept at aligning organizational goals with broader societal aspirations, and in so doing seek to inform and drive the beyond profit agenda. As leaders they are likely to foster a culture that is striving to service customers and shareholders, fulfil its social responsibilities, and be a force for good.
The Alchemist’s transformational reach is wider than that of a Strategist; their actions are in service of a greater societal good and, as a result, they are legacy builders. Examples include the transformational leaders of countries - e.g., Nelson Mandela.
Aim High; Be More Alchemist
All postconventional styles will be successful in the beyond profit VUCA world. Strategists and Alchemists are more optimal for senior leadership and board positions. These latter two share five critical success characteristics with one another.
First, Strategist and Alchemists are driven by ethical considerations, truthfulness and principle-based decision making i.e., they can be relied on to do the right thing, regardless of cost to themselves. Second, they are both purpose-driven and seek to serve society by having a positive impact beyond their organization. Third, they are systemic in their thinking, they take a system-wide perspective, deftly deal with paradoxes, and make effective judgments which balance short and long-term needs. Fourth, they are less constrained by organizational convention and can effectively drive organizational transformation. And fifth, they can work effectively with all levels of leadership ego maturity - they collaborate with all stakeholders, deal well with conflict, and create shared meaning. Their comprehensive engagement with others supports both innovation and the cooperation necessary to drive sustainable change.
Fewer than 1% of leaders are Alchemists. The good news is that we can all move up the hierarchy of leadership maturity. Given an uncertain future and the unrelenting pressure on leaders to succeed in a beyond profit VUCA world, we should all aspire to achieve the ego maturity levels of the Alchemist.
Race to the Top
Organizations pay too little attention to the development of higher levels of ego maturity at early career stages. The focus is typically directed towards skill sets - performance management, agile working, assertiveness, and effective delegation etc. This type of training is helpful in moving leaders through conventional stages of leadership (Diplomat, Expert and Achiever). Indeed, cultural norms often reinforce Achiever Action Logic – KPI delivery, clear accountability, tight deadlines, and program plans.
At early career stages, for example, a focus on ethical decision-making and courage builds strong foundations for future development. The conventional leadership stages are driven by external validation and conformity. The ego shift in postconventional leadership has at its heart a reliance on ethical principles (e.g., truth telling regardless of cost) and an internal sense of purpose which aligns with the organization’s society-serving mission.
A parallel focus needs to be on broad stakeholder engagement, empathy and the practice of skill sets required to build a deep understanding of others’ perspectives (putting yourself in the shoes of the other).
The development of systemic and holistic thinking should be a priority. Conventional leadership thinking patterns are too narrow in their focus. The shift from short-term to long-term, from few variables to many variables, and from linear relationships to networks allow for levels of commercial judgment and identification of risk better suited to the VUVA world.
So far so good. Most of us, however, are not Alchemists and the development journey to this level of ego maturity sounds ethereal given our own Action Logic. Alchemists create value through their comprehensive understanding of the deep connectivity between all things. This covers the spiritual domain. Alchemists strive for the highest good, highest purpose and highest meaning. Most of us experience Alchemists as being slightly ‘other worldly’ – purpose driven, supremely wise, interpersonally serene, and higher-order ethics driven. They provide, without fail, a wider context to problems faced, making others aware of complex trade-offs, risks, and uncertainty, and yet calmly take balanced decisions when faced with paradox and chaos.
Beyond the Individualist stage, leaders have already developed the core skills to achieve success in their organizations. Their challenge is in shattering and rebuilding an already highly functioning and trustworthy mental map of the world (Action Logics). An Alchemist’s mental map is enhanced in four primary directions – higher order ethics, purpose/society driven, whole system thinking and stakeholder empathy[2].
The main avenue for development is peer-to-peer collaborative enquiry and personal reflection. Collaborative enquiry is typically through dialogue and building shared meaning with leaders, experts, role-models etc. from outside of the organization, although group-facilitated activities including psychodrama etc. can also help. Aspirant Alchemists also need to practice looking at problems from other stakeholders’ perspectives, comprehensively empathizing with their goals and their perceived costs and benefits. The explicit goal of collaborative enquiry is to disrupt and challenge one’s mental models and the assumptions held about the world sufficiently for reframing to take place.
Moving through postconventional ego stages, of course, requires continual learning. But this is not mere knowledge acquisition and skills practice. Building ego maturity is a mindset challenge. It requires the courage to proactively destroy today’s successful version of oneself and rebuild one’s Action Logic. This ego death may or may not lead to greater success but it, almost certainly, moves one further to the margins of pre-existing social groups. Courage in this context is part faith, a belief that sacrifice to the future will pay dividends, and the anti-fragility to deal with and thrive in the chaos of one’s mental models continually being destroyed and rebuilt.
A Final Word
The leadership landscape continues to evolve significantly under the pressures created by a beyond profit VUCA world. Conventional leadership styles, which are more narrowly focused on self and performance metrics have stark limitations. For senior leadership and board positions particularly, there is a performance imperative for leaders to be at postconventional levels of ego maturity.
Senior leaders should aspire to be Alchemists. Alchemists’ higher-order ethics, purpose-driven desire to serve society, ability to adopt a whole-systems perspective and navigate complexity, and their deft handling competing stakeholder views enable them to act as catalysts for change, transforming their organizations and positively impacting wider society.
The journey to become an Alchemist is challenging; most of us won’t make the grade. However, all the benefit is in the journey and not the destination. If you take on the challenge to become an Alchemist, then you will successfully navigate the VUCA landscape, transform your business, build a better future for your shareholders, customers, employees, and society. And leave a legacy.
Main References
Seven Transformations of Leadership, Rooke & Torbert, 2005
Making Business Personal, Kegan, Lahey, Fleming & Millar, 2014
Paradigms of Personality, Loevinger, 1985
Ego Development: A Full-Spectrum Theory of Vertical Growth and Meaning Making, Cook-Greuther, 2021
Antifragile, Taleb, 2012
End
[1] Leadership ego maturity – describes the ideal progression through recognizable stages of leadership sophistication towards high order morality, wisdom, care, and effectiveness.
[2] Higher-order ethics, purpose & society driven, whole systems thinking, and stakeholder empathy are further broken out in the diagram – “10 Developmental Priorities to be More Alchemist”