“Forty percent of today’s businesses will not exist in a meaningful way in 10 years.” That’s what John Chambers, Cisco’s recently retired CEO, announced at a recent conference here in San Diego. He may be right. More and more large businesses are failing to thrive. Not only do leaders have an outdated skill set, they also suffer from a bad mindset. And it’s epidemic.

As I have written before there are three basic paradigms of leadership power:

  1. Hard Power, which is the willful drive to get immediate, self-enhancing results.
  2. Soft Power, which is driven by empathy and collaborative skills to maintain high functioning relationships.
  3. SMART Power, which blends soft power collaboration with the goal achieving energy of hard power to create genuine human benefits. Put simply, a SMART Power leader is inspired to create a river of value to customers, employees and investors.

Exploit no one; improve the lives of everyone…that’s the mantra of a SMART power leader.

So what’s this got to do with lots of businesses going out of business? It turns out, everything.  The combination of MBA school training, Wall Street demands, and money-fueled politics have enthroned blindly competitive hard power as the mindset of success. But it’s not.

Just look at Volkswagen. The ego driven ambition to become the world’s largest car maker fertilized a culture that internally sneered at environmental regulations and exploited the brains of talented engineers to scam consumers into believing Volkswagen had actually developed high mileage, clean diesel cars. It is a screaming example of negative innovation that permeates today’s business management.

Immoral leadership is not the only result of hard power motives. So is stupidity. Just consider why John Chambers’ observation of mass business failure is likely to continue.

Mckinsey & Company’s new research on corporate performance gives six reasons for a steady slide of established enterprises as they try to compete with newer and more nimble competitors. Here they are:

  1. Resistance to the transformation necessary to succeed in a new economy. The new economy is driven by the digital revolution of business models, innovation, customer acquisition and engagement, and organizational processes and structure.
  2. Businesses that are organized as silos are internally competitive, rigid and change-resistant. Business agility requires both internal and external talent to be organized as networks, yet few leaders know how to lead talent networks.
  3. 90% of capital budgets of large companies are spent on old initiatives.
  4. Legacy systems, processes and products are huge roadblocks to new value creation and working relationships.
  5. New competitors can use the latest technological advantages to create and hyper scale customer value and convenience at very little cost. (e.g. Uber, Amazon, Airbnb, Etsy, etc.)
  6. Public companies that are driven by quarterly profitability cannot compete with venture-backed startups that are willing to over-invest to disrupt the market.

So, are you open to a radical solution? One that will shake up and wake up your leadership? Have you ever considered this?

Most companies already have untapped leadership resources who have the contextual, operational, relational and empathetic intelligence (CORE talent) that, according to brain science, is ideally suited to excel in hyper-competitive environments requiring constant adaptation.  This is talent that they already employ.

It is is the CORE talent of most women.

It’s true. We now have the scientific evidence of over 100 validated studies, including ones from the McKinsey Global Institute, that show that female brains are designed to better deal with complexity. The versatile design of a brain marinated in estrogen before birth makes it easier for most women to deal with a confusing array of interactive and paradoxical forces.

According to experts like Daniel Goleman, most male brains are typically designed for efficiency. We love shortcuts. Simplicity. Speed.Decisiveness. It’s easier to control the short-term than trying to influence the long-term. In business this can easily lead to the common hard power error that speed and continuous cost reductions are a strategy rather than acts of desperation.

The unprecedented challenges of our age are ideally suited to the CORE talent designed into women’s brains. They are:

  • Contextual Intelligence: This is the ability to continuously align short-term goals into the long-term big picture.  It’s the intuitive capacity to “see” the interactive effects of multiple decisions in complex circumstances.
  • Operational Intelligence: This is the holistic thinking ability to predict the time, talent and resources necessary to execute a project, improve the process, or develop a solution. (In comparative studies performed by Zenger-Folkman, women’s understanding of operational issues in matrix organizations is consistently better than men’s.)
  • Relational Intelligence: This is the ability to systematically improve group intelligence by carefully including diverse points of view and resolving competing priorities.
  • Empathetic Intelligence: Women are much more likely to create positive innovation that enhances customer’s lives because they have more vivid empathetic imaginations than most hard power leaders. This creates a stream of genuine, positive innovations rather than fake ones like Volkswagen’s.

In the war for talent what is so easy to overlook is that, according to Gallup, more than 67% of women are disengaged in their work because they feel unheard and undervalued. What I tell leaders is that if they really want to create a competitive advantage they need to unravel the invisible biases that disable soft power women and men to create an agile, SMART Power culture. It will require a revolution…a wholesale change of mindset. But it is absolutely necessary if you are to thrive in a new world full of unexpected technologies and unseen competitors.

It’s not impossible to change.  I have helped many hard power leaders adjust their behavior to act SMARTER. I have found that even the most hard-nosed, hard asses can be coached to collaborate if they are desperate for success. Better results create a mind shift that changes cultures. And a creative, SMART Power culture is the only way to constantly ignite innovation and deliver on promises that matter in our wild new world.

Who knows… had Volkswagen harnessed the soft power of their women’s CORE talent there might actually be genuinely clean diesel engines.