Essential

are you struggling to lead teams you rarely see in person? as remote work becomes the norm in the post-covid era and artificial intelligence reshapes business operations, traditional management approaches are falling short.

success today means viewing employees as human beings first rather than production factors. your success now depends on mastering a new set of skills – including building trust across digital distances. 

in this chapter, you’ll find out how to lead effectively in a world where corner offices have given way to home offices. you’ll discover why supporting employee well-being and autonomy isn’t just compassionate – it’s an economic imperative. and you’ll learn how to build genuine purpose and connection, whether your team is across the hall or across the globe.

let’s dive in.

what happens when 50 years of management wisdom suddenly becomes obsolete? this is the question that confronts today’s business leaders as they wade through an unprecedented series of crises – challenges that include managing distributed teams, integrating artificial intelligence, and navigating macroeconomic uncertainties.

over the past century, companies have shifted from prioritizing efficiency and productivity in manufacturing to emphasizing collaboration, knowledge, and creative innovation. this evolution has placed employees and their skills at the center of business value.

yet in the time it takes to read or listen to this paragraph, another dozen professionals will join the freelance economy – a stark illustration of how rapidly our traditional understanding of work is changing. between 2020 and 2021, the american independent workforce expanded by ten million workers, signaling a deep shift in employment relationships.

even organizations once considered exemplars of employee satisfaction face mounting pressure for change. companies like google and amazon, long celebrated as worker utopias, are now confronting unionization efforts. meanwhile, global antitrust authorities have launched aggressive campaigns against business consolidation, pushing for increased competition and stakeholder value. new legislation worldwide mandates more diversity and greater transparency around compensation, forcing companies into uncharted territory. 

the covid-19 pandemic may not have created these trends, but it has accelerated them. today’s employees demand more than competitive salaries; they seek autonomy, respect, advancement opportunities, and meaningful work-life integration. this shift represents a restructuring of the employer-employee relationship, with talent increasingly dictating the terms of engagement. much like how, in medieval europe, the black death transformed thinking and gave birth to renaissance humanism, our current era demands an equally radical reinvention of leadership principles. 

so how do we find the path forward? what we need is a reimagining of the leadership principles that have governed business for half a century. we need flexible, human-driven enterprises capable of adapting to rapid change while nurturing talent. this transformation marks the beginning of a new chapter in management, where human potential drives business success rather than the other way around.

at a leading medical center in boston, an ai system achieved near-perfect accuracy in detecting tumors from x-rays, outperforming human radiologists in speed and precision. yet during a routine review, a veteran doctor noticed some crucial things the ai had missed. what were they? evidence of fractured ribs – healed breaks that helped illuminate the patient’s medical history and explain their current symptoms. what does this distinction, between raw analytical power and contextual understanding, reveal about the future of work?

while artificial intelligence excels at processing vast datasets, recognizing patterns, and handling repetitive tasks, its effectiveness remains bounded by context and historical data. for instance, at a recent international conference where an ai translation system perfectly rendered every word of a japanese speaker’s joke into english, the audience sat in silence – the cultural context that made the joke funny was entirely lost in translation.

human intelligence brings unique capabilities that ai struggles to replicate: emotional depth, contextual understanding, and nuanced judgment. human beings integrate past experiences with broad awareness and can consider future implications. this temporal flexibility, combined with our capacity for ethical reasoning and empathy, enables us to navigate complex social situations and make value-based decisions that go beyond the immediate outcomes.

the limitations of current ai systems highlight the continuing importance of human involvement. like an orchestra conductor who knows how to adapt to the moment, effective leaders must learn to harmonize human and artificial intelligence. instead of asking what organizations need from their workforce, leaders must consider what human workers need to thrive in workplaces with technology. as we’ll see, this means creating environments that unlock human potential with the technology that’s deployed.

you might compare this moment to the introduction of calculators in mathematics. rather than rendering mathematicians obsolete, calculators freed them to focus on higher-level problem-solving and theoretical work. similarly, ai has the potential to elevate human work by handling routine tasks, making space for creativity, strategic thinking, and greater meaning.

the future of work isn’t about replacing humans – it’s about leveraging both forms of intelligence to create something greater than either could achieve alone.

on black friday in 2011, most retailers were screaming “sale!” meanwhile, patagonia took out a full-page ad in the new york times with a stunning message: “don’t buy this jacket.” the outdoor clothing company explained the environmental cost of their best-selling fleece and urged customers to think twice before buying things they didn’t need. in what seemed like a violation of every marketing principle, patagonia was actively discouraging sales of their own product. the result? sales jumped 30 percent during the following year.

perhaps no company exemplifies purpose-driven leadership more clearly than patagonia. in 2022, founder yvon chouinard made the unprecedented decision to donate his company, valued at $3 billion, to a trust and nonprofit organization dedicated to fighting climate change and protecting undeveloped land. this dramatic move represented the culmination of decades of putting purpose at the forefront. 

patagonia has built a culture where employees can take time off for environmental activism (the company will even pay their legal fees if they’re arrested at peaceful protests), pursue education, or simply enjoy the outdoors. this has resulted in a remarkably low 4 percent turnover rate and consistently strong business performance.

people want more than a paycheck today. they need to know their work matters, and they increasingly demand that their organizations’ values align with their own. consequently, companies with strong purpose show measurable improvements in both retention and profitability.

however, the rising importance of corporate purpose has also led to widespread “purpose washing” – companies making lofty statements about values without backing them up with action. this phenomenon has become particularly visible in the age of social media, where corporate responses to social movements are quickly scrutinized for authenticity. organizations that rush to make public statements without first examining their internal practices face backlash and lose credibility.

for leaders seeking to build genuine purpose into their organizations, the key lies in aligning words and actions. research shows a troubling “purpose gap” – while executives generally feel they can live their purpose at work, most employees say they can’t. bridging this gap requires leaders to invest time in understanding how individual employees can uniquely contribute to the organization’s mission. 

ultimately, purpose isn’t just a statement on a website; it’s a framework that should guide everything from strategic decisions to daily operations.

we’ve seen how employees increasingly seek purpose-driven work that aligns with their values and interests. but beyond meaningful work, they’re also demanding agency – which isn’t just about the impact of work but their ability to influence it.

this push for agency is playing out at multiple levels, perhaps most visibly in how people want to work. we can see this in two contrasting examples. in 2024, dell abruptly ended its decade-long flexible work policy, declaring that remote workers would no longer be eligible for promotions. the backlash was immediate, with employees pointing out how the policy disproportionately affected women, who often bear primary caregiving responsibilities. 

in contrast, companies like sanofi demonstrate the value of empowering policies. the pharmaceutical giant guarantees employees a year of salary and complete flexibility around work arrangements during cancer treatment, ensuring they can prioritize their health without fear of losing their jobs. this approach both fosters trust and reinforces the value of agency in creating a supportive workplace.

the power of collective agency was also starkly illustrated in late 2023 at openai. when the board of directors fired ceo sam altman, 730 employees signed an open letter demanding his reinstatement and the board’s resignation. they argued that the board’s actions had undermined the company’s mission and demonstrated incompetence. within days, altman was back as ceo – a vivid illustration of how coordinated employee action can reshape even the highest levels of corporate governance.

these examples point to a crucial reality for modern leaders: fighting against worker agency is both futile and counterproductive. research shows that employees who believe their voices matter are over four times more likely to feel empowered to do their best work. and study after study demonstrates that organizations which embrace worker agency – whether through flexible work policies, meaningful input into decision-making, or support for collective action – consistently outperform those that cling to traditional command-and-control.

the most successful leaders today recognize that their role isn’t to maintain control, but to set a clear direction while empowering their teams to determine how to get there. 

here’s a stat that might surprise you: nearly 70 percent of employees report that their manager affects their mental health more than their therapist or doctor does! while many leaders care about the mental health of their employees, a dangerous perception gap exists. while 91 percent of executives believe they demonstrate care for employee well-being, only 56 percent of employees agree. employee burnout costs global businesses $322 billion annually in lost productivity and turnover.

this disconnect isn’t just about feelings – it directly impacts the bottom line. according to research, companies that invest in employee wellness programs see an average return of six dollars for every dollar spent. johnson & johnson, for instance, saved $250 million in health-care costs over a decade through their wellness initiatives. 

let’s look at their program in more detail. in a comprehensive approach to mental health support, the company created a global standard for mental health benefits across all their locations. this ensures that employees worldwide have access to at least eight therapy sessions annually, along with digital mental health tools and on-site counselors. the initiative showcases how organizations can create systemic support for well-being rather than piecemeal solutions. in contrast, other companies still resist flexible work arrangements or implement superficial solutions like basic surveys that fail to address underlying issues. 

studies show that effective workplace well-being rests on four key pillars. first, leaders must create predictable environments while allowing flexibility in how the work gets done. second, organizations need to provide comprehensive mental health resources and make them easily accessible. third, leaders should model healthy behaviors themselves – it’s not enough to encourage vacation time if managers never take it. fourth and finally, genuine relationship building between leaders and teams creates the psychological safety necessary for people to voice concerns and seek help when needed.

the message is clear: supporting employee well-being isn’t just compassionate leadership. it’s a strategic imperative that directly affects an organization’s ability to innovate, hold on to talent, and stay competitive.

imagine a plate of cookies being passed around a business meeting. who’s going to take the last one? now imagine that the boss, without hesitation, not only grabs the cookie but eats it messily, dropping crumbs everywhere. believe it or not, this exact scenario has played out again and again in the so-called cookie monster experiment. it reveals a certain truth about power: the very qualities that help people rise to leadership – empathy, awareness, consideration for others – often vanish once they achieve authority. 

and yet these “soft” skills are, if anything, more important to leaders than ever. according to one survey, 49 percent of ceos believe ai could automate most of their current responsibilities. and indeed, other research has found that one in five employees says they’d trust artificial intelligence more than their boss to understand their needs. 

take uber ceo travis kalanick. he built a $71 billion company at breathtaking speed, but his leadership style created a culture so toxic that a viral video of him berating a driver became a symbol of everything wrong with tech leadership. “i need leadership help,” he finally admitted, but by then the damage was done – to both his career and uber’s reputation.

the problem isn’t just about individual leaders losing their way. our whole understanding of leadership needs to shift. in today’s remote workplaces, where corner offices have given way to identical zoom squares, traditional displays of authority mean nothing. what matters is the ability to inspire, connect, and build trust across digital distances. these “soft” skills are now the real power of leaders.

the challenge, though, circles back to the cookie monster experiment. maintaining these human qualities becomes harder as leaders gain more authority. the digital age makes this disconnect more visible than ever – and more costly. every leadership misstep can be captured, shared, and scrutinized worldwide. the most effective leaders recognize that lasting power comes not from authority, but from improving others’ lives. they stay mindful of the cookie monster within – the tendency to become self-focused with success – and actively work to remain connected to their people’s needs and experiences.

in the end, the leaders who thrive won’t be those who can compete with ai on efficiency or technical skills. they’ll be the ones who can do what no machine can: inspire shared purpose, make people feel seen, and build genuine human connection. that’s not soft leadership – it’s smart leadership.

the main takeaway of this chapter to essential by christie smith and kelly monahan is that traditional top-down management principles aren’t cutting it in the post-covid era.

paradoxically, successful leadership in the age of ai requires shifting toward more human-centric approaches. by balancing ai capabilities with uniquely human skills like emotional intelligence and ethical reasoning, organizations can create more resilient and adaptable workplaces. 

in a time of changing employee expectations, leaders must foster a sense of purpose, embrace worker agency, and prioritize well-being alongside efficiency. they’re no longer nice-to-haves; they’re strategic imperatives. 

ok, that’s it for this chapter. we hope you enjoyed it. if you can, please take the time to leave us a rating – we always appreciate your feedback. see you soon!