The change in the external environment brings opportunities or challenges for any individual or business.
Contextual leadership is a mindful and pre-emptive mind-set that enables the organisational leadership to understand and define the context and also to develop the anticipatory skills necessary to detect changes in its environment that may impact the organisation’s achievement of goals. In today’s VUCA world, a contextual leadership approach is essential to maintain an advantage or take the business lead
Many CEOs struggle to keep up with the changing trends or competition if they do not devise a well structure approach to tackle this challenge of a frequently changing environment.
Such situations can be dealt with more aptly if the leaders are more participative and contemplate and reflect on the following questions:
- In what context do I define organization’s success?
- In what framework of values and ethics, do I want to operate?
- What is the biggest challenge that I need to address to be on track to achieve the organisation’s goals, mission, and vision?
- What are my team’s views on a given situation?
- Why is my teammate’s view different? What is his/her perspective?
- What knowledge do the other members of my team possess that I do not? How might this affect the way they work?
Being more aware of the context helps leaders to avoid making assumption-based errors. Contextual understanding enables a leader to avoid trying to apply the same techniques to novel situations and circumvent the failure, loss, and, at the absolute least, painful bad reputation.
Context allows the management of resources in an apt manner. Leaders with contextual intelligence may focus their actions and solutions on the environment in an optimum way by communicating in the right way with all the stakeholders. It helps in conserving a lot of energy that otherwise is spent on miscommunications. These leaders constantly acquire information and make context-based decisions rather than applying the same formula to resolve all business issues.
How to Develop a Contextual Leadership Approach?
- Be Self-aware
- Enhance your strength
- Accept and Manage your Weaknesses
- Partner with Experts
- Invest resources to identify the right job-fit and culture-fit people
- Develop a culture of collaboration and high Performance
- Acknowledge the contribution of people and invest in their emotional development
- Be open to exploring new pathways and innovation
- Design new frameworks and models to explore new markets
- Be innovative to bring about change or manage change for market penetration and business growth
- Be a data Leader
- Develop the ability to sieve the data as per the business needs
- Analyze the data to identify and understand the apparent as well as the hidden needs of the customers
- Present the data not just for intellectual appeal but to establish an emotional connection with the client
- Use the information not to tell what you are but how you can create value for the client
We will understand contextual leadership from the banking examples:
Last year, the banking sector saw many changes and different leaders responded to the environmental changes.
One event that steered maximum attention was Citi’s decision to shut down its India retail banking business, which includes credit cards, savings bank accounts, and personal loans. Media was buzzing with the NEWS heading like- Citibank could not survive the Indian competition or Citibank failed in India.
But Jane Fraser, CEO at Citigroup, did not take this decision because she thought the bank failed in India but she took the decision to take their group business to new heights by shifting her focus to wealth management business so she decided to capture the strong growth and attractive returns on the wealth management business and created a strategy around those objectives and took the required actions and achieved the desired results. Citigroup raised more than any other bank for special-purpose acquisition companies that year, which helped the firm reap $876 million in fees from equity underwriting. Quarterly stock-trading revenue, typically less than $1 billion at Citigroup, surged to $1.48 billion.
A few examples from the banking industry, are where the banking leadership exhibited their contextual intelligence and contextual Leadership approach
Deutsche Bank, Germany’s biggest lender, has 16 branches in India. Kaushik Shaparia, its chief country officer, did not see much benefit in the subsidiary model. In 2022, the bank started operations at the IFSC Banking Unit at GIFT City, Gujarat, to serve as an international platform for Indian businesses.
Kaushik Shaparia, its chief country officer, does not see much benefit in the subsidiary model.
DBS Bank India, on the other hand, acquired Lakshmi Vilas Bank in November 2020. This helped the Singapore-based lender to scale up operations in India to nearly 600 branches from 34 following the takeover.
Conclusion: Contextual leadership approach enables a leader to develop insight into the dynamics of the environment which helps to adopt a leadership approach that helps them to design a winning strategy. Contextual intelligence is a crucial leadership competency that enables the leader to be present in the present and makes him feel a micro change in his environment and foresee the emerging tendencies and trends and empowers him capitalise on the information by taking the right decisions
