Leadership and business development must be designed in tandem within organisations – and Business Schools can provide the education to support this, writes Aalto University’s Pekka Mattila
Leadership development is crucial in creating competitive business advantage. It improves financial performance, helps attract and retain talent, drives strategy execution, and increases success in navigating change. Leadership development should be seen as part of overall business development. In short, leadership and business development are two sides of the same coin.
But not all organisations have caught up with this view. This could be due to the fact that resources in both public and private organisations tend to fluctuate, and HR projects are the first to fall victim to cost-cutting. This causes the business to lose sight of the bigger picture. HR development and business development happen in parallel, but in silos – they are often very disconnected, even though they depend on each other.
When running a business, ultimately the main goal is to make a profit, and HR can contribute to this, but during periods of economic instability, the main aim is to keep the business afloat. Anything that is not needed to keep the business running takes a backseat. Developing employees is important, but ensuring they keep their jobs is even more so.
When an upturn eventually comes around, the business begins to address the maintenance backlog accrued during the cost-cutting period, and must start from scratch as HR projects were put on hold, or phased out. To avoid this chain of events, smart organisations will formulate an overarching trajectory for their leadership development objectives and activities.
For this to succeed, they need leadership development and business development.
Leadership development programmes offer external inputs as stimuli. However, growth does not take place in a classroom, it happens when leaders apply the skills they’ve learned in their work. By combining business development and leadership development, employees can apply these skills immediately. Only by combining leadership and business development will individuals be able to conduct experiments, implement experience and insights, and close the knowing-doing gap. It also allows them to validate what they’ve learned and see how it works in their own contexts.
Develop the right leadership programmes
Leadership development programmes often offer a ‘buffet-style’ experience. These programmes dish out a spectrum of coaches and facilitators with many tools and concepts. However, the selection is so varied that it could lead to ‘overeating’, where participants end up with huge piles of literature and other materials, but lack the opportunity to apply their learning to their work.
This approach can often overwhelm participants, but the goal is not for every individual to adopt every tool and concept on offer. Instead, a high-quality leadership development programme caters to many different skills and needs.
Here at Aalto University Executive Education, we strive to integrate a live business case into each programme so that participants can test their new skills and knowledge and see what works for them.
Leadership training with a vision
Leadership development programmes are linked to organisations’ long-term visions. In the best-case scenario, the strategy is also still in the making and the strategy dialogue takes place, in part, on the leadership programme platform. This way, the programme provides an opportunity to validate hypotheses on the go. Programmes make it possible to facilitate these discussions in a structured manner.
In strategy work, it is important to decide what we choose to believe as ‘truth’. All industries have become more challenging; they find competition in unexpected places, or notice their competitors innovating with revenue and business models.
Smart organisations will view leadership development programmes as voyages of discovery to uncharted territories, or as an opportunity to validate assumptions.
Support for strategy implementation
Many organisations will have already formed a strategy but not yet implemented it. In this scenario, a leadership development programme can provide outside support and guidance, or serve as a platform for launching projects. Having a programme means that projects don’t get buried under competing priorities. They have a structure, a timetable, a support system, and control points.
The challenge most organisations face is that people get excited about ambitious new strategies and visions, but ask what’s going to happen next. This places pressure on management to show that the vision will lead to action, and that they are serious about implementing it, not just trying to be trendy. In this situation, a leadership development programme may serve to prove that things are changing.
When implementing strategy, the timeline is important. It’s vital that the organisation gets moving in weeks, and achieves a concrete milestones within months. This may be as simple as announcing that a task force has been launched – another thing with which leadership programmes can help.
Goals provide focus
Leadership programmes are not only a great way to make people feel included, but also a way to channel the organisation’s energies in the right direction. But this only works if the programme is directly linked to the organisation’s ambitions – so the more concrete objectives organisation can present, the better. Effective goals are always measurable because it helps identify what must happen to achieve results.
Leadership skills impact the bottom line
As I’ve already stated, leadership development is proven to help organisations achieve their business development goals, but it also gives backing to the entire management team responsible for implementing the organisations strategy.
Research carried out by McKinsey and Egon Zehnder in 2011 revealed that while talent is always important, only exceptional talent makes a real difference. According to the report, there was a high correlation between executives with ‘excellent’ capabilities and the organisations financial performance, while merely ‘good’ performance showed no correlation.
In appraising leadership development, we should move from measuring intellection and cognitive skills to evaluating the concrete actions taken and the results achieved.
The real impact of a leadership development programme should manifest itself in improved business development performance.
What does this mean for Business Schools?
If more organisations adopt the idea that leadership development and business development go hand in hand, then they will start to rely on Business Schools more and more to provide them with the education to support this.
Combining leadership and business development benefits both the organisation and the Business School. It benefits the organisation because, as I said earlier, leadership development and business development are two sides of the same coin. By using leadership programmes to develop the leaders within a business, you will help the business to succeed, because a good leader will implement vision and values, ensure effective communication, and motivate employees.
It will benefit the Business School because more people will attend the School, but it also brings in a variety of different voices who have had experience in different industries.
Working together with an organisation allows them to bring in real-world problems, discuss and come up with a solution – which will then benefit the individual when they face a similar problem in their job. By combining leadership and business development, you are truly enhancing their education.
Pekka Mattila is the Group Managing Director of Aalto University Executive Education and serves as a Professor of Practice at the Aalto University School of Business.
Inequality, climate change, values and technology. Alison Watson, Head of School of Leadership and Management at Arden University, delves into four global challenges and considers what they will ask of tomorrow’s business leaders
Society is constantly evolving. In the past two decades alone, there have been some remarkable feats that have inevitably changed the way we live and how society works.
Little changes can also cause big waves in our everyday lives, such as the shift to remote working and the emphasis on wellbeing brought about by the Covid-19 pandemic.
If we understand how the world is changing, we will know what problems to expect and can help prepare the next generation of leaders to deal with them. Here are four major trends to consider.
* 1. The great rise of technology
The pandemic has sped up the use of technology and inevitably shifted the skills future jobs will demand. Staying competitive in this changing business environment requires new strategies and practices, with findings suggesting that most executives recognise technology’s strategic importance as a critical component of the business, not just a source of cost efficiencies.
Despite worries that certain jobs will become obsolete, many future roles will be created by, and revolve around, the fourth industrial revolution and the digitisation of the workplace. These in-demand skills will result in business leaders needing a set of foundational skills: cognitive, digital, interpersonal and self-leadership (including self-awareness, self-management and entrepreneurship) skills. With AI, tech developments and automation assisting the labour market, the talents employees bring to the table need to complement digital advancements.
We are already seeing the benefits technology brings. Being able to work remotely has changed the way people view the working day; rightly so, there is now more importance on maintaining a good work-life balance and more freedom to apply for jobs that were once out of reach simply due to location and inability to commute. It has given those with disabilities more options and has allowed parents to progress in their careers without having to sacrifice precious time with their children.
Technology, among many other things, should be allowing businesses to welcome a more diverse team. It will allow business leaders of the future to engage with people from a range of specialisms and sectors, allowing them to broaden their horizons and continually inform their developing worldview.
This interaction will help leaders adjust their perspectives, enable them to build strong, long-lasting relationships with key stakeholders and reinforce an understanding of people across various cultures and backgrounds, allowing them to become a keen advocate of diversity and flexibility.
At the heart of this, therefore, the businesspeople of the future must have a deep understanding of people – they need to know how to empower and get the best from their teams and have a deep emotional and social intelligence which enables them to understand and gauge the impact of the decisions they make on the people around them.
* 2. Values matter
One change that has gathered pace throughout the pandemic and shows no signs of slowing down is that people want to be involved in something that matters, something that aligns with their values and something that fulfils them.
This ‘awakening’ that successive lockdowns brought on has resulted in society wanting more purpose behind their decisions – whether it is deciding to be more sustainable for the environment or changing jobs because they want to work at home full-time. This means businesses of the future will need a more holistic approach. There will be more emphasis on impact and inclusivity; it is not solely about profit.
Business leaders will need to keep this in mind. In order to survive, they will need to consider what people – consumers and workers alike – want. They will be held accountable for decisions that do not align with ethics, just as we have seen with some fast fashion brands, for example, in recent years.
As technology allows us to connect more easily, it will become simpler and more feasible for consumers and employees to go elsewhere if a business does not meet their needs. Things will become more competitive, so the business students of today need to prepare and think about how they will conduct strategies with people’s needs in mind.
*3. Climate change
A change we cannot ignore is climate change and its impact on society. It will undoubtedly cause colossal changes that span different areas, including business. For example, as the effects of climate change become more prominent, more and more consumers are looking to buy goods and services from businesses that operate in ethical and sustainable ways.
According to McKinsey, companies need to take climate considerations into account when looking at capital allocation, development of products or services, and supply-chain management, among other things. This will require a change in mindset, new operating models, and tools and processes to integrate climate risk into decision-making.
So, what does this mean for the business leaders of tomorrow? As mentioned earlier, they’ll be expected to be holistic leaders who make decisions based on sound moral and ethical principles. They’ll need to empower their teams and be innovative in order to revolutionise business strategies that will maximise sustainable and ethical practices.
The future business leader will be a sustainable leader – someone who will drive change by addressing the core social, environmental and economic issues affecting our planet. Instead of getting caught up on ‘everyday’ business matters, the leaders of tomorrow that have sustainability at their core will need to be able to ally short-term business objectives with longer-term, strategic plans that consider objectives relating to economic health, the environment, people and society.
They will need to have a comprehensive worldview that contemplates and understands humanity’s place as part of a global ecosystem and will need to be able to lead and influence others.
*4. The widening gaps in the workforce
Disparity in the workplace remains a big topic with many conferences dedicated to closing the gender gap, for example, and many movements trying to showcase the importance of a diverse workplace.
This final trend is continually evolving and impacting businesses and, as such, is also one that is influenced by the aforementioned points. As climate change takes its toll on Earth’s physical planet, for example, it will cause social, economic, and political chaos as refugees flee areas that can no longer sustain them.
Society is likely to become more polarised due to the impacts of climate change. With some areas losing natural resources, such as drinking water, and conditions either too hot and dry, or too cold and wet, livelihoods will be threatened and citizens will be displaced, causing a rise in people seeking asylum. A rise in floods and increased pollution will also cause public health concerns. Research has shown that social inequality is characterised by a vicious cycle, whereby disadvantaged groups suffer a disproportionate loss of their income and assets from the effects of climate change, resulting in greater, subsequent inequality.
With the rise of technology, we will again see disadvantaged groups missing out on key developments due to financial constraints. As life expectancy rates grow, many will continue to work long past the traditional age of retirement and yet they may fall behind if not included in the rapid developments that allow economies and businesses to thrive.
All of this will result in disparities if development and inclusion aren’t key aspects for businesses. Business leaders will need to consider how best to deploy this older, more experienced workforce, how to react to the movement of asylum seekers and disadvantaged groups, and how they can close the inequality gap.
Alison Watson is Head of School of Leadership and Management at Arden University.Alison has a wealth of experience in business and management having worked for a number of large retailers as an operations and project manager. Her recent research interests focus on inclusion and encouraging wider access to higher education.
Business isn’t capitalising on the benefits trust can bring, say HBS Professor, Sandra Sucher, and HBS Research Associate, Shalene Gupta. But students of management must be made aware of how trust relates to power and how leaders must govern themselves to retain it
Leaders have powers other people don’t. They get to decide (or lead a process of deciding) what products or services a company will offer, how many people to employ and what kinds of jobs they will have, which suppliers to partner with, and even how to interpret laws and regulations. On the flip side, this also means leaders have to make difficult decisions that may mean causing harm in order to preserve the greater good. One senior executive told us that, ‘the fair decisions are easy. My job is to make the difficult decisions.’
Leaders have the responsibility of making decisions which also means in order to keep this responsibility they must be trusted. ‘Trust’ refers to our ability to be vulnerable to an organisation or person that may have power over us. For example, customers are vulnerable to an organisation because they have no window into how a product or service is created, they must trust that the product or service will work as it is supposed to and that it is ethically created. Similarly, when employees agree to work for an organisation, they are trusting that they will not be abused and that they will have a reasonable amount of job security.
The benefits of trust
Research shows that teams that trust their leaders perform better. In a study of National Collegiate Athletic Association (NCAA) basketball teams in the US, researchers found that trust in a leader was more important to winning than trust in one’s teammates. Teams that trusted their coaches won 7% more of their games than teams that didn’t. And the team with the highest trust in its coach won the national championship, while the team with the lowest trust in their coach only won 10% of their games. As one player commented: ‘Once we developed trust in Coach___, the progress we made increased tremendously because we were no longer asking questions or were apprehensive. Instead, we were buying in and believing that if we worked our hardest, we were going to get there.’
The importance of trust translates to a company’s bottom line as well. In a 2002 study of Holiday Inns, 6,500 employees rated their trust in their managers on a scale from 1-5. An increase in trust of 1/8th of a point was correlated with a 2.5% increase in revenues. And at a macro level, this all scales up: a 1997 study of 29 market economies showed that a 10% increase in trust in the population was correlated with a 0.8% increase in GDP.
But as a community, business isn’t capitalising on the benefits trust can bring. According to the 2021 EdelmanTrust Barometer, CEO credibility is at an all-time low in several countries, including Japan at 18% and France at 23% (in terms of the proportion of people who rate a CEO as a very or extremely credible source of information about a company) making the challenge for CEOs even more critical as they try to manage today’s issues.
Because leaders have the responsibility of making decisions, leaders earn trust differently than organisations. Followers want first to know that a leader has earned her power legitimately, and second that she will use it well because she has the power to make decisions that will impact their careers and even the ways that they live their lives. They rely on their leader to make these difficult decisions with compassion and fairness. A leader who is not trusted will not hold on to their position for long as we can see in the case of companies, such as Boeing, that have suffered a major scandal where the CEO is later dismissed, or in the case of Harvey Weinstein, who was ousted after his multiple abuses were uncovered.
The American philosopher, John Rawls, calls that first act of earning trust by acquiring power legitimately at the beginning of a leader’s tenure (or the first exposure that you might have with her in her role) ‘originating consent’. There is then what he calls ‘joining consent’ – the fact that people continuously assess whether they want to keep trusting a leader with power.
Even if you come to your role through the right process, fairly carried out, people still want to know how it originated – on what basis you were selected. In other words, how, exactly, did you come into your role and get the power that comes with it? In democratic societies, we recognise the result of an election by consenting to allow the winning candidate to assume the job of mayor, governor, or president as our leader. In corporations, the process is less visible: boards of directors appoint CEOs, who we in turn, consent to allow to lead our organisations.
The process of earning trust, however, does not end with originating consent. Earning trust does not just happen when a leader first acquires power. It’s a status that is always being reassessed through joining consent, that is, trust needs to be earned over and over, throughout time.
However, leaders face an uphill battle when it comes to joining consent because it turns out that the very qualities that cause you to earn people’s trust in the first place are easily destroyed by acquiring power. Business students need to be keenly aware that part of retaining trust as a leader is governing yourself to resist the heady side-effects power can create, which paradoxically cause leaders to lose trust. The lexicon of business history is filled with stories of CEOs like Travis Kalanick, who created large companies and then got ousted due to losing touch with the public. But why does this happen?
The paradox of power
Dacher Keltner, a Professor of Psychology who heads up the University of California, Berkeley Social Interaction Lab has, for decades, studied power, which he defines as ‘one’s capacity to alter another person’s condition or state of mind by providing or withholding resources… or administering punishments.’ In his book, The Power Paradox (2016) Keltner describes his research and that of other leading scholars of power.
Power is a paradox in the following sense: the very behaviours that lead others to trust you with a position of power are (or can be) horribly transformed (think Dr Jekyll and Mr Hyde) into behaviours that are the opposite of what people esteemed in you before. For instance, leaders often gain their power because of their willingness to listen to others, but once attaining it, they frequently downplay or even refuse to listen to dissenting voices. That is because being in a position of power affects both the way you see yourself and how others perceive you and the way you act.
Now, the second half of this paradox is not exactly new news. There’s a reason why you have probably heard some version of the quote: ‘Power tends to corrupt, and absolute power corrupts absolutely’ – the famous opinion of the British historian, Lord Acton.
Let’s start with the first half of the paradox and Keltner’s description of the behaviours that lead others to trust you with a position of power. In this view, the road to earning and maintaining power and, ultimately, trust is paved by actions that show a caring focus on others. Groups create leaders. They ‘give power to those who advance the greater good, construct reputations that determine the capacity to influence, reward those who advance the greater good with status and esteem, and punish those who undermine the greater good with gossip.’ Keltner’s leaders demonstrate empathy, they give to others, and they show gratitude.
Characteristics of those who rise to power
Keltner conducted the research that first introduced him to these ideas 20 years ago. He wanted to understand why some people rise to power in a group, while others don’t. To get at this question, he designed a natural state experiment, which means an experiment that would allow him to interact with participants as they were living their lives and at home, as it were, in their own spaces. He got permission to study the students who lived together in one hall within a first-year dormitory at the University of Wisconsin, Madison, a public university with a heterogeneous student body.
At the beginning of the year, he met students and asked them to rate the amount of influence of each person on the hall. Students also completed a questionnaire that asked them to assess the extent to which their own personalities were defined by five social tendencies – a group that psychologists refer to as the ‘Big Five’: kindness, enthusiasm (reaching out to others) focus on shared goals, calmness, and openness to others’ ideas and feelings. He came back at the middle of the academic year, and then at the end, asking students to rate the power held by each of their dorm-mates each time.
He tallied the power ratings given to each student. He found that as early as two weeks into the year, some students already had more perceived power than others. He also found that each student’s power fluctuated throughout the year. He found that those who rose to power had the most enthusiasm, and that the other Big Five traits mattered as well for retaining power. Researchers replicated these results across 70 other studies, finding that all the people who rose to power had all of the Big Five personality traits. The studies were in settings as varied as hospitals, financial firms, manufacturing facilities, schools, and the military. This is overwhelming evidence that if you want to get power, you need to be someone who values others, who cares about the greater good, and who can help a group succeed.
The reason why Keltner’s book is called The Power Paradox, however, is that he goes on to describe how the actions that might lead one to be chosen to have power can disappear under the neurological and psychological effects that being in a position of power can have on individuals. Keltner calls power a ‘dopamine high’. Dopamine is a neurotransmitter that is released in our brains when we expect a reward. Keltner found that when people feel more powerful, they get dopamine highs. However, this makes them less aware of the risks associated with an action.
Perspective-taking and priming
This transformation from a focus on others to a focus on yourself is also a concern of Adam Galinsky, Professor of Leadership and Ethics at Columbia Business School, who is a renowned social psychologist. He and some colleagues conducted a deceptively easy-looking experiment to illustrate one of the worst effects of power on individuals, which is how it interferes with a person’s ability to take the perspective of others. A key component of empathy, perspective-taking, is the proverbial ability to walk in another person’s shoes, which means to be able to see, feel, and imagine how someone else experiences the world.
But if you literally can’t put yourself in someone else’s shoes, you can’t take their perspective into account. In Galinsky’s study of 57 undergraduates, he divided the students into ‘high-power’ and ‘low-power’ groups. Students in the high-power group were asked to write about a personal incident when they had power. In the low-power group, students wrote about a personal situation in which another person had power over them. The students were then taken into a separate room and given a series of tasks: high-power participants were asked to allocate seven lottery tickets to themselves and another participant; low-power participants were asked to guess how many of the seven lottery tickets they would receive from another participant. Students were then given the following instructions: Task 1: with your dominant hand, as quickly as you can, snap your fingers five times. Task 2: with your dominant hand, as quickly as you can, draw a capital ‘E’ on your forehead with the marker provided.
Here is the amazing thing that happened. The participants in the high-power position wrote the letter E on their foreheads as if they were reading it themselves, which meant that the E would be backwards from the perspective of someone looking at them and trying to read it. And the participants in the low-power position wrote the letter so that a person looking at them would be able to read it easily. In other words, they wrote it considering the perspective of the other person, whereas the high-power group wrote it from their own perspective.
The experimental process used by Galinsky is called ‘priming’. It refers to the common and well-validated research technique that finds that giving individuals tasks, like writing about a personal experience, will put them in a frame of mind to think of themselves in a particular way, in this case, as either a person of high power or someone with low power. So, just by being primed to think of yourself as high-power, you look at the world from your own perspective.
Preparing leaders for an internal battle
CEOs like Travis Kalanick from Uber (he of the toxic culture, never-ending scandals, and bad-boy fame) and Tony Hayward from BP after the Deepwater Horizon oil spill (Mr ‘I’d like my life back’) are first-rate examples of what leadership looks like under conditions of power-laced self-focus, an inability to empathise, and indifference to harm imposed on others.
What this comes down to is that leaders at any level in an organisation, or even in their personal life, must be prepared for the internal battle that awaits. On one side is the focus on others and the good of the group – the actions and beliefs that enable people to gain power and the respect and admiration of others. On the other side is the well-documented finding that being in a leadership role will pull you towards a focus on yourself and replace attention to others with an inability to care, understand or even be curious about the conditions of other people or groups, except those who serve your interests.
Describe, analyse and judge: notes on teaching trust and leadership
I’ve [Sandra J Sucher] taught at Harvard Business School for 23 years, including courses on moral leadership, and leadership and corporate accountability. Trust is a skill and therefore when teaching it, it’s important to use examples instead of lectures.
In the classroom, I draw on a mixture of cases (I recommend Dave Cote at Honeywell to illustrate a trusted leader balancing different stakeholder needs: ‘Honeywell and the Great Recession (A)’ and ‘Honeywell and the Great Recession: The Economic Recovery (B)’) and examples from real life and great literature to stimulate discussions (William Langewiesche’s American Ground (2002) is a fabulous example of how a group earned originating consent, for example).
Then using a line of rigorous questioning, I get students to put themselves in a leader’s position. First, we start with observation; I call that step, ‘Describe’. What is the incident that’s happened? What are the leadership challenges? Then we take it deeper; I call that step, ‘Analyse’. Why did it happen? What factors contributed to the present? What do we know and what don’t we know? And finally, I have the students assess and debate the right course of action; I call that step, ‘Judge’. The reality is that in the midst of a crisis or a scandal it’s difficult to know what to do and sometimes there are no clear answers, just tough choices. Students often come into class hoping for right answers – what I hope to give them is a process for thinking through difficult dilemmas.
Sandra J Sucher (left) is a Professor of Management Practice at Harvard Business School, where she has taught for the last 20 years. At Harvard, Sucher has studied how organisations can change and improve while retaining stakeholder trust and the vital role that leaders can play in the process. She is also an advisor to the Edelman Trust Barometer.
Shalene Gupta (right) is a Research Associate at Harvard Business School. She is a former Fortune reporter, writing about diversity in Silicon Valley, big data, and smart cities, before which she worked at the US Department of Treasury and had a Fulbright grant in Malaysia.
Sandra J Sucher and Shalene Gupta are the authors of The Power of Trust: How Companies Build It, Lose It, Regain It (PublicAffairs, 2021).
Retail Marketing Group CEO, Lysa Campbell, on the importance for leaders of reflection, gaining trust, and having open conversations that ‘encourage people to have a better understanding of one another and the world around them’
‘Understanding how what you did yesterday will impact today and tomorrow is an important evaluation for any leader or entrepreneur,’ says Lysa Campbell, CEO at Retail Marketing Group and a firm believer in the power of reflection. Innovation and reflection are often key in my role,’ she affirms. ‘Adopting an approach of reflection means that as a wider company we are always learning…’
A leader with a background as the founder of a high-growth field marketing agency, Campbell covers the importance of gaining your team’s trust, and of diversity of thought facilitated by having open conversations, in this interview with Business Impact.
Can you tell us a little bit about your current role and what it involves?
As an experienced agency leader with a successful background in creating business growth and diversification, I’m currently leading Retail Marketing Group (RMG) as CEO for the UK, having joined the agency in 2018.
Innovation and reflection are often key in my role. RMG’s aim is to provide forward-focused solutions that meet our clients’ needs. Adopting an approach of reflection means that as a wider company we are always learning, refining how we operate to be at the top of our game, and making sure we are adapting to the changes happening around us.
My role specifically spans a wide range of departments and responsibilities. RMG offers field marketing and brand experience solutions as well as Storey, our newly launched video chat shopping service. I oversee all these propositions, manage the sales and marketing teams, and make sure every one of our clients gets the best possible service.
Did your Business School/university experience help get your business off the ground? If so, how?
People are often surprised when they learn that not only did I not attend university, but I also don’t have A-level qualifications. After I finished my formal education, I had to decide on the path I wanted to take and drive it forward myself. I am a firm believer that how far you get in life is all about mindset and making the most of opportunities, coupled with a steely determination to achieve more.
During my career, however, I have sought and undertaken courses that have contributed to my success, delivering a combination of immediate and long-term impact. Added to that, I have been fortunate enough to have benefited from having some brilliant role models and mentors from whom I learned a huge amount that I took into setting up my own business.
What single piece of advice would you offer undergraduate and postgraduate students of business and management who plan to start their own companies after completing their studies?
My experiences have taught me to stick to my principles regardless of how difficult the decision is. No matter what, you must believe in yourself and trust that the principles that have carried you so far will continue to help you make the right decisions.
The eight years I spent building and growing my first business were not easy. Through many mistakes and moments of doubt, I learnt that the most important thing that I could do was to make time for reflection. We can only learn in hindsight, so understanding how what you did yesterday will impact today and tomorrow is an important evaluation for any leader or entrepreneur.
What are some of the challenges and opportunities you’re currently facing, both as a leader and as an organisation?
As a leader, one of the best things I can offer my team is bravery, showing my team that I am prepared to make difficult decisions. I had to prove this trait to my team early on, when I had to make the choice to fire a client because they weren’t the right fit. My team had raised their concerns with me, and it was my responsibility to listen, understand and act to show my loyalty to the team. At that stage, our agency was dependent on [that client’s] revenue, however I was grateful to recognise the potential long-term impact my inaction would have, including a negative work culture or losing the trust of my employees.
Being vulnerable, open and honest with your team goes a long way to earning their trust, respect and loyalty.
Do you feel that leading a company has enabled you to make a positive impact? If so, how?
Without a doubt, yes. I hold strong to the fact that the most positive impact a leader can make is with the next generation of the workforce. An employee’s success – from their perspective of an industry and the decisions they make, to how they navigate their careers – are all heavily influenced by the types of leaders they can observe and learn from.
I take pride in leading a company that welcomes people from all walks of life, with a heavy focus on diversity and inclusion in our corporate strategy. We mostly do this through diversity of thought, bringing varying, diverse viewpoints to the table. Discussions that come from these open conversations encourage people to have a better understanding of one another and the world around them. Tech companies need to prompt these conversations wherever possible, starting with visible representation in leadership roles.
Outline the importance of diversity to your company’s strategy and why you feel it is important to business approaches as a whole today.
Over the last few years, diversity in the tech industry has slowly been improving. It is clear that companies are trying to take steps in the right direction to become more inclusive through various initiatives, although there is a lot more for us all to do.
At RMG, we are trying to ensure diversity is at the core of everything we do. We know we have a long way to go but are seeing positive results from ensuring our push for diverse thinking runs right through from the recruitment process, to offering individually personalised development plans and opportunities to grow. We treat everyone as an individual and provide the support and opportunities we feel enable everyone to develop at their own pace and be the best version of themselves.
Lysa Campbell is currently CEO for the UK at Retail Marketing Group. She started her own agency in 2008 with only two staff. Seven years later, that agency had a turnover of £9 million GBP, with more than 2,000 staff.
What traits do you need to be a ‘sustainable leader’? Alison Watson, Head of the School of Leadership and Management at Arden University, looks at qualities to embrace and develop, and outlines why businesses will need them
Our next generation of leaders are going to be under intense pressure to incorporate sustainable practices into everything they do. They will need to ensure that businesses around the globe are contributing to the social, environmental and economic issues impacting our planet. This article considers the skills that business graduates will need to develop to ensure they can become the sustainable leaders of the future.
Changing consumer demands require adaptation
Brands across a wide variety of sectors and fields are placing a huge focus on sustainability right now – and with good reason. With the effects of climate change becoming ever more prominent and a rising public awareness around the pitfalls of some of the elements of western life we take for granted, such as fast fashion and unnecessary food waste, many consumers are looking to buy goods and services from businesses that operate in ethical and sustainable ways.
In 2021, sustainability has become an issue that is impossible to ignore and businesses, in turn, have become compelled to act. The leaders of today must adapt quickly to meet this consumer demand – their businesses risk being left behind if they are unable to do so.
Meanwhile, the development of the UN’s Sustainable Development Goals has driven many businesses to think about how they can incorporate environmental, social and corporate governance (ESG) goals within their organisations to become cleaner, greener and more ethically minded.
But what about the leaders of tomorrow? How will these changes impact them?
Leadership the world needs
The leaders of tomorrow will be expected to be holistic in their approach and make decisions based on sound moral and ethical principles. They’ll need to empower their teams and be visionaries about the ways in which we can revolutionise business to maximise sustainable and ethical practices.
Put simply, they must become people who will drive change and help create a better world by addressing the core social, environmental and economic issues affecting our planet.
But what core traits will business graduates of today, and therefore the leaders of tomorrow, need to develop to be successful sustainable leaders?
In business, it’s all too easy to get caught up in the now – and that’s understandable when you consider the multiple pressures our business leaders are under as part of their everyday roles. CEOs are typically working in fast-paced environments and often don’t have the short-term stability to make sound, long-term decisions on projects which won’t bring about an assured uplift in profits.
The sustainable leaders of tomorrow, however, will need to be able to align those short-term business objectives with longer-term, strategic plans that consider objectives related to economic health, the environment, people and society.
At their core, sustainable leaders should have a comprehensive worldview which contemplates and understands humanity’s place as part of a global ecosystem. They will need to consider how we can minimise our impact on the world around us and ensure we are responsible stewards of the planet we call home.
Once they’ve identified their longer-term objectives, these individuals will need to be able to lead and influence others. Leaders will need to take others along on their journey in generating a commitment necessary to ensure everyone works towards a common set of objectives and goals.
As individuals with a strong moral compass, sustainable leaders must also focus on making decisions that are rooted in moral and ethical principles. They should also be able to back these decisions to the hilt – being responsible and accountable for the decisions they make and the outcomes that follow them.
Seekers of collaboration
The best sustainable leaders are expert collaborators who seek involvement in networks that can broaden their understanding of the business landscape and the way it impacts our world.
By engaging with other leaders from a range of specialisms and sectors, leaders can broaden their horizons and continually inform their developing worldview. It can help to adjust their perspectives and enable them to build strong, long-lasting relationships with key stakeholders. These networks will also reinforce an understanding of people across various cultures and backgrounds, allowing leaders to become keen advocates of diversity.
At the heart of this, sustainable leaders must have a deep understanding of people. They need to know how to empower and get the best from their teams while having a deep emotional and social intelligence which enables them to gauge the impact of their decisions on the people around them.
By its very nature, being a sustainable leader means embarking on a period of change within an organisation. The best leaders take others along on this journey with them, not only by influencing and inspiring, but also by educating their teams so that they understand the reasons behind the decisions being made.
When it comes to managing their people, sustainable leaders must focus on coaching and mentoring, rather than dishing out commands and giving direct instruction. They should empower their teams to learn for themselves and hone their abilities so that they are able to address core challenges themselves – exploring, learning, and devising actions which can help them to address the common challenges they face.
All of this will help ensure that they develop their business’ culture in line with the objectives they have set out, embedding sustainability within the corporate culture and giving their organisation the best possible chance of supporting the world’s sustainability agenda.
Alison Watson is Head of School of Leadership and Management at Arden University.Alison has a wealth of experience in business and management having worked for a number of large retailers as an operations and project manager. Her recent research interests focus on inclusion and encouraging wider access to higher education.
Reining in pride is a crucial part of business education, says Rita Trehan, co-author of Too Proud to Lead
Business Schools are magnets for talented, ambitious people who are used to achieving what they set out to do. Usually, these driven students go on to become emerging leaders in organisations and their hard work is rewarded with success.
But too much success also presents possible pitfalls. After a string of accomplishments, young leaders may conclude that their successes prove that their decisions are always correct, and that their ideas are always the best. That attitude risks leading them to dismiss the ideas and perspectives of colleagues. The word for this is ‘hubris’, and it is equally dangerous for the person displaying the hubris as it is for those working with them.
The importance of well-functioning teams whose leaders prioritise co-operation, humility and open-mindedness are clearly demonstrated in my work as the head of a consultancy that helps CEOs and their organisations examine their culture. So, too, are the dangers of what happens when overconfidence is left to grow unchecked. Leaders’ overestimation of themselves and underestimation of others result in poorer outcomes and missed opportunities for both the business and the person who succumbed to hubris.
How hubris works and how to fight it
Too often in both corporate leadership and business education, we equate the drive to succeed with the pressure to succeed at all costs. The pressure on executives and students to achieve results can lead them to abandon any attempts to consult and co-operate. The pressure to meet and outperform, be it for a class or an earnings report, leads to short-termism and a relentless pursuit of success at the expense of broader considerations.
This results in leaders being wrongly admired for their overconfidence, drive and single-mindedness. It rewards autocratic decision-making by CEOs and boards, and the forgoing of consultation and collaboration. In the short term, the results from this approach might look good and indicate that things are working. In the longer term, it is bound to lead to problems. Poor collaboration leads to siloing throughout the organisation, which can lead to the creation of fiefdoms in which data is not shared but wielded for power against ‘competitors’ within the company. It is not a recipe for long-term thriving.
Companies concerned with legacy, long-term survival and staying relevant are broadening their purpose. Profit and shareholder value are no longer sufficiently broad aims — businesses need to develop a purpose- and values-driven vision for the future.
By doing so, they are democratising their purpose and creating ownership of it throughout the organisation. By adopting a shared vision, instead of a CEO-driven vision, companies will diffuse most of the risks of a skewed, hubristic approach taking root.
The trend towards ‘purpose’ as the key driver of a business’s vision for the future is a healthy one and involves all relevant stakeholders naturally – the board, employees and suppliers, as well as the customers and communities.
This broadening of responsibility creates a need for greater transparency and a wider set of obligations, which forces CEOs to adopt a more inclusive approach. In this way, ethical, equitable, environmental and societal values become a part of their decision-making.
Business Schools can take the lead
Hubris, like so many other issues, is easier to prevent than it is to reverse. That makes Business Schools the perfect place to curb overconfidence in the next generations of leaders. Fortunately for educators, teaching this is not an additional curricular goal to add to the heap — it can be integrated into the existing syllabus.
Not unlike other competencies in business education, teaching against hubris needs to include the development of critical-thinking skills and emphasise the values of collaboration, long-term thinking and the practice of welcoming alternative and opposing viewpoints.
Stopping hubris requires:
1. Being able to spot the warning signs — lack of collaboration, lack of humility and a lack of understanding (or willingness to understand) regarding the effects of their decisions.
2. Understanding why people fall victim to hubris, and which kinds of environments encourage it and how to avoid them.
3. Examining high-profile examples that illustrate the business consequences of hubris, both at the level of companies — such as WeWork, General Motors, Uber and Deutsche Bank — and at the individual level – among the executives whose overconfidence in their infallibility led to predictable failures that tarnish their otherwise brilliant careers. The lessons of history must be accompanied by education in anti-hubris values and skills to check overconfidence.
I doubt many readers would need more than a moment to think of several examples of hubris in business. There are cautionary tales among both individuals and entire companies: They’re blockbuster movies and 600-page biographies, or, in the case of Boeing, the subject of tragic TV news for weeks.
Educators can use these examples as case studies. In the 2021 book, Too Proud To Lead, my co-authors and I look at four cautionary tales. The We Company, once again rebranded as WeWork, shows us, ironically, how its name was belied by a failure to embrace true openness and collaboration, while its investors’ unquestioning faith in Co-Founder, Adam Neumann, constitutes its own form of a complementary, enabling hubris.
While Neumann was overconfident in his own abilities, and instilled that in his acolytes and investors, the subject of our second case study, General Motors (GM), is overconfidence in the permanence of the status quo. GM’s failure to compete with Japanese automakers in the 1980s and 1990s cost it market share and reputation. After its recovery in the late 2000s, aided by the US taxpayer, GM seems once more to be underestimating a new wave of competition — this time from Tesla and the industry-wide move to electric vehicles.
Travis Kalanick’s Uber, meanwhile, shows how building an arrogant corporate culture infects and undermines the reputation and potential for long-term success of a business founded on a great idea. Kalanick, Uber’s Co-Founder and first CEO, oversaw incredible growth at Uber but there have been multiple accusations of sexual harassment and unethical competitive practices at Uber during his reign. An air of invincibility, from the top down, continues to haunt the company.
These examples offer an indication of how some leaders – to their own detriment – close themselves off, assume the future will look the same as the present, and believe in their own invincibility. All these failures have their basis in some form of unchecked power, but none to the degree of our fourth case study, Deutsche Bank (Deutsche).
Deutsche’s expansion in the 1990s led it to becoming the biggest bank in the world, with assets of more than $2 trillion USD. Instead of seeing themselves as stewards of capital, Deutsche’s leaders interpreted this growing pool of wealth as proof that they could launder money and manipulate markets. Its scandals have cost it revenue and reputation; it has since been eclipsed by other lenders in the EU, not to mention US and Chinese banks.
Focusing on a positive vision of leadership
Hubris is not just a label for the defeated, to be appended to the loser as a badge of chastening. It is also important to discuss the hubris of iconic leaders, including Mark Zuckerberg and Jeff Bezos. What is there to be regretted in the careers of the most successfully acquisitive business figures of our time? Doesn’t their influence and wealth prove that their confidence was earned and that any arrogance, however unfortunate, didn’t get in the way of their success? Why shouldn’t students emulate their risk-taking and tenacity?
In some cases, the backlash against their hubris is in progress: Domination at all costs appears to have put Facebook, Amazon and other tech masters, such as Google, en route to being broken up or otherwise subdued by governments around the world. In other cases, the damage is measured in what could have been: If Amazon was less focused on bending its commercial partners, employees and yes, even its customers to its will, who knows what else the business could achieve? Better pay for workers and better terms for suppliers would cost Amazon money, margin and profit to fix, but probably not enough to wound it or slow it down appreciably. It would also thin the ranks of Amazon boycotters and the desire of its critics to rein it in.
Hubris, of course, thrives beyond the c-suites of the world’s largest corporations. Being ‘too proud to lead’ can cause the downfall of leaders in organisations of all sizes, as well as the downfall of lower-level managers and business students who have bought into their own early hype. Leaders of organisations you once worked for may come to mind. We do not need to dwell on these examples. Instead, we can focus on a positive vision of what kinds of leadership business education can hold up. Leaders who think through their purpose and align this to a wider purpose for their organisation are broadening their aims and aspirations to be more inclusive, more in touch with the wider world and more in tune with changing trends and sensibilities. These leaders regard this not as a demeaning activity, but an empowering one. With the emphasis on empathy, nurturing relationships, and collaboration, leaders are driven by group focus rather than self-focus, which leaves little opportunity for the self-centred nature of hubris to set in.
Holistically successful leaders do something that I call ‘walking the hubris tightrope’ – they attempt to balance ambition and drive with purpose and service. This art form is more of a process than a destination — avoiding hubris is not a box to be checked off but a value to be imparted. Whether educators choose to teach this will profoundly shape the next generation of business leaders.
Rita Trehan is a business transformation expert and the Founder of consultancy, Dare Worldwide. She is also the co-author of Too Proud to Lead: How Hubris Can Destroy Effective Leadership and What to Do About It (Bloomsbury Business, 2021).
Drawing on his experiences as a consultant during China’s period of explosive growth, the University of Bath School of Management’s Stephen Wyatt considers the capabilities required to thrive in the highly dynamic context of the fourth industrial and the value of a saying commonly attributed to Lao Tzu
I worked in China in its period of explosive growth, from the early 1990s to 2008, when the country went from bicycles, Mao-suits and new cities dusted with sand swept in from deserts, to being the biggest market globally for luxury goods, having the biggest television audience globally for an international polo match (the so-called ‘sport of kings’) and a place where 21 is the average age of a Maserati driver.
Growth of economies in China and Southeast Asia
As a strategy and business consultant, I sought to bridge the gaps between the expectations and operating practices of many major western corporations and also help navigate the opportunities, risks and dynamics of business in China. As China’s economy surged ahead, data was always lacking, there were continual shortages in skills and experience, and regulation lagged far behind, resulting in occasional episodic ‘course-corrections’ that incumbents usually lamented. In the excitement of this bubbling cauldron, huge fortunes were made by those with an impressive ability to make sense of the unfolding changes, who had the decisiveness needed to seize initiatives, and who were able to fluidly reconfigure operations and reposition offerings.
Capabilities were hard to replicate for many western corporations, whose decision makers were far from China and who first needed to first analyse reliable data before deciding. I had been schooled in western business practices so, to help me understand how Chinese business leaders might be thinking, a colleague introduced me to an extract of Chinese philosophy, reputedly from the sixth century BCE and attributed to Lao Tzu (although others have said it was from either Confucius or Xunzi): ‘Those who have knowledge don’t predict. Those who predict don’t have knowledge’. [Lao Tzu is the reputed author of the Tao Te Ching and the founder of philosophical Taoism.]
Executives in China and the ‘tiger’ economies of Southeast Asia were immersed in and focused on highly dynamic volatile, uncertain, complex and ambiguous (VUCA) contexts of business. They knew the weakness of forecasts (predictions). Yet many a corporate system, optimised for more stable market conditions elsewhere, depended on periodic formalised forecasting, budget allocation and decision-making processes. In my work with clients, I started to focus more and more on developing the management and leadership capabilities to thrive in highly dynamic marketspaces, rather than seeking only to resolve tensions and complications due to the different paradigms between headquarters and local operations or joint-venture partners. An executive at the agrichemicals company, Syngenta, once told me: ‘Here we are [in the tiger economies], but Harvard didn’t teach us how to ride tigers!’
The new context of business
Over the past 20 years, the fourth industrial revolution has gathered pace globally. The development and application of new technologies (for example, the Internet of Things, AI, robotics, biotech, nanotech, blockchain, and machine learning) is facilitating significant acceleration of business, making disruptions and highly dynamic VUCA contexts increasingly accepted as the norm. Leading firms are shaping the future as it unfolds, new business models are emerging, sector boundaries are being breached, incumbents are collapsing while unprofitable startups, known as ‘unicorns’, are being valued at more than $1 billion USD.
Strategic decisions have to be made relying on data of the past and present, even though it is recognised as decreasingly representative of the future. Regulators struggle to keep up with new norms of corporate behaviour, leading to inquests (for example, the repeated appearances of Facebook before US Senate Committees), remedial actions (for example, China’s 2021 ruling against ride-share company, DiDi Chuxing) and substantial fines (for example, EU fining Google $5 billion USD for abuse of power with its search engine). The dynamics (pace of evolution, disruption, rate of wealth creation and destruction, scarcity of data for strategic decision making, lagging regulation) that face business leaders in the fourth industrial revolution are reminiscent of the dynamics some faced when China and Southeast Asia were the booming frontiers. So what are the capabilities required to thrive in these contexts?
Possiblity not probability
The first and perhaps most important difference between traditional approaches to strategic decision making and those required in the accelerated VUCA context of the fourth industrial revolution is to embrace ‘possibility not probability’. We can’t gather and analyse data on the future. However, as Canadian scholar Henry Mintzberg pointed out, it is equally wrong to depend on the precision of a forecast for decision making as it is to not predict a possible future.
My research with executives at corporations that do thrive in the dynamic fourth industrial revolution shows the importance of adopting a compelling vision of the future; the possibility, to set often audacious growth objectives in the pursuit of a societal purpose. This forward-leaning strategic posture establishes the orientation to shape the future. It provides directional guidance for where the organisation is heading, course correcting as the future unfolds, encountering both the expected and unexpected challenges. ‘Possibility not probability’ requires executives to think more broadly than unifying on a singular view of the future – what could the opportunities and threats be? The next step is to then decide on which of these to act and on which to keep a watchful eye, ready to act if they actually manifest. A most useful strategic planning technique in these dynamic marketspaces is ‘scenario planning’, through which ideas for action are both identified and placed into one of four categories: ‘Do it’; ‘Be ready to fast-respond’ (if it unfolds); ‘Create an option’ (i.e. lay the foundations for an alternative initiative, but don’t commit just yet); ‘Have an alternative back-up plan’ (what would we do if our main beliefs about the future are proved wrong).
The second set of capabilities are those required for the corporation to adapt in a timely manner – the ‘what it does’ and ‘how it does it’. This requires: developing a heightened ability to sense the future, and make sense of it, as it unfolds; being attentive to weak (and stronger) signals and early indicators; and being able to determine the ‘so, what could this mean for us?’ In this sense, the ability to quickly formulate and implement new initiatives and responses to unfolding opportunities and threats, combined with the ability to replicate them and scale rapidly, is important.
The third complementary capability in this group is the ability to fluidly reconfigure the resources of the corporation to enhance flexibility and efficiency in support of the adjusting array of initiatives; for example, outsourcing or in-sourcing, changing organisation structure, adjusting or duplicating supply chains, and so on.
Winning the race for talent
The third set of capabilities addresses the constant shortage of skilled and experienced talent. In fast-evolving marketspaces, the talent and skills required for a corporation to thrive tomorrow are constantly evolving, i.e. the idea that ‘what got us here is insufficient to take us there’. Over the five years from 2020 to 2025, the World Economic Forum estimates that more than 97 million people will need to upskill or reskill due to the new technologies and working practices of the fourth industrial revolution.
‘Winning the race for talent’ is more important than ‘winning the war for talent’, as an external pool of talent with relevant skills and experiences simply does not exist. To win the race for talent requires constant investment in training and development, fluidly deploying and redeploying talent to the roles requiring those skills as the roles change, and retaining the wellbeing of that valuable talent within the corporation, through human-centred policies and practices.
For some executives, the skills that are required to thrive in the highly dynamic context of the fourth industrial revolution may echo skills they first explored in the once-tiger economies of Asia. Others will need to free themselves from the false precision of forecasts, or the comforting – yet constraining – periodic strategic planning processes. They might also do well to reflect that: ‘Those who have knowledge don’t predict. Those who predict don’t have knowledge’ and to instead think about possibility not probability.
The first months are crucial to a CEO’s tenure, but bold and decisive action designed to leave your mark may not be the best way forward. Marianna Zangrillo and Thomas Keil, co-authors of The Next CEO, present five tips to help new CEOs build the foundation for later success
The long-desired job as CEO finally arrives, after years of hard work and sustained performance. Yet, for many new CEOs, it is actions in the first months that can make or break their chances of success. In this, traditonal advice may not always be the most effective and instead, seemingly counter-intuitive measures may bring a better outcome.
For example, new leaders are often advised to take bold actions during their first 100 days. While this may be the best option when a company faces financial distress, or in the case of an internal CEO appointment, this often increases the risk of failure.
With that in mind, here are five principles for new CEOs to take on board as they seek to take charge of an organisation successfully.
1: Preparing for day one
Successful transition into the role of CEO relies on preparation. New CEOs are well-advised to use any time between the appointment and starting the job for intense preparation. For external CEOs especially, this is a time to get to know stakeholders, the future management team, and the financials of the organisation. However, CEOs appointed from inside the organisations are also well-advised to deepen their understanding of areas/departments they have not previously been actively involved with, as surprises can often surface.
The more prepared the incoming CEO is, the better their actions will be early on. For example, when Olaf Swantee was appointed CEO of UK telecommunications company, EE, he identified a business challenge the organisation was already grappling with before day one. That allowed Swantee to establish his focus on getting things done very soon. Similarly, Vas Narasimhan, the internally appointed CEO of Novartis, used the time between his appointment and day one to engage leaders across all businesses and start defining the strategic agenda that drove his first year at Novartis.
2: Day one: every word counts
You usually get just one opportunity to make a first impression, and this general rule holds true for new CEOs too. When a new CEO is appointed, everybody has expectations and carefully listens to every word the new CEO says. As a result, communications on day one can be a powerful device to set the direction and agenda of the CEO’s tenure and should therefore be carefully planned out and never delegated. However, this is also a moment when a new CEO, especially one hired externally, may still have limited knowledge about the organisation and the directions to be taken. Communication should therefore focus on setting the personal tone and signalling the strategic focus of the CEO.
3: Define your CEO brand
CEOs will always be identified with the themes they promote and with the approach they take in delivering messages and driving their agendas. Initial communication, and initial actions in particular, signal what the CEO stands for and define a CEO brand.
Communication is relevant both for strategic themes such as growth, transformation, or cost focus, and also for personal values such as approachability, communication style, humility or aloofness, arrogance, and inability to take criticism. To establish the CEO brand, actions always speak louder than words. For instance, when Jonathan Lewis joined [the now defunct] UK oil services company, AMEC Foster Wheeler, he not only communicated from the outset a focus on cost but also sent a wider message on what he stood for in terms of acceptable behaviour by refusing the brand-new company car and cutting executive dining and flight privileges. This is very different from the case of another new Fortune 500 CEO who declared a focus on cost at the same time as posting a job ad for a personal hairdresser for the company jet. This story naturally made headlines well beyond the organisation.
4: Listen rather than speak
From day one, the appointed CEO will be looked to for decisions and direction. The first months, however, should be about listening and learning rather than speaking to gain a deeper understanding of all parts of the organisation. To do this, new CEOs must engage with all stakeholders, including customers, partners, suppliers, employees, board members, shareholders, and bankers. The learning process should also be complemented by conversations with staff who are not their direct reports, to ensure that they gain unfiltered information from across the organisation.
5: Controlled action
Finally, while the initial period for any new CEO should be focused on learning and preparing for what is to come, some carefully planned action is advisable. Some may simply be forced on the new CEO by the situation, for instance, when the resignation of a top management team member requires a fast replacement. Other, symbolic actions may also be pursued to establish the CEO brand and signal their strategic agenda. However, any action taken early into a CEO’s tenure should be designed to focus on quick and needed wins and not constrain future options while a new vision and broader strategy are still being formulated.
The initial months may very well be the most important time of a CEO’s tenure. The pressure is on, expectations are high, and there is little room for error. While most CEOs are action-oriented and eager to leave their mark on the organisation, this may be the time to control their reflexes and measure both what is said and done. Instead of making a splash that may backfire rapidly, this is the time to build the foundation for later success.
Marianna Zangrillo is a business angel and investor with experience in companies that include Nokia, Swissport, and Infront Sports. Thomas Keil is a Professor at the University of Zurich, where he teaches strategy and international management. Marianna Zangrillo and Thomas Keil are co-authors of The Next CEO: Board and CEO Perspectives for Successful CEO Succession(Routledge, 2021).
High-quality social connections aren’t just a predictor of happiness, they can also help people flourish at work and develop their leadership ability, say the authors of Everyday People, Extraordinary Leadership
The new currency of the Internet Age and the IoE (internet of everything) is not intellectual capital; it is social capital – the collective value of the people you know and what you will do for each other.
When social connections are strong and numerous, there’s more trust, reciprocity, information flow, collective action, and elevated wellbeing. Having strong social relationships is the best predictor of human happiness, trumping wealth, income and material possessions; and research has shown that those who fail to achieve this most basic need experience loneliness, anxiety, depression, low self-esteem, obesity, and anger.
You need to find ways to get connected to the information, resources and influence you will need to make a difference. In doing so, figure out substantive ways to connect your colleagues with one another and with those outside the boundary of your group or team who are part of other key networks.
The importance of social connections has been dramatically illustrated during the Covid-19 pandemic. While nearly everyone around the world was ordered to maintain ‘physical distance’, the yearning for social connection increased. People invented all kinds of ways to continue to interact with their fellow human beings. Virtual coffee breaks and cocktail hours popped up immediately after people had to shelter in their homes. Residents stood on their balconies and sang to each other. Friends and family organised drive-by birthday and graduation celebrations. The demand for virtual gathering services nearly broke the internet. There was seemingly no end to the creative ways that people invented to stay connected to each other, even in the worst of the crisis.
Strengthening the bonds of connectedness
The most well-connected individuals are typically those who are involved in activities outside their immediate job function or discipline, and who avoid being too strongly typecast in one field, function, administrative body, or community. Find ways to meet people from a wide range of units, departments, projects, and professions. While specialisation has its benefits, from a leadership perspective you don’t want to get stuck in a rut. If your connections are only in your specialty, you will be less influential than if your connections cross a lot of boundaries. When it comes to social connections, there’s a payoff in mining deep and wide.
Greater connectedness can also be fostered when you and your colleagues have enough confidence in one another’s relationships to ask for help when needed. The impulse to give help when requested has been shown to be a powerful, automatic, and emotional response formed early in life. However, in many situations people underestimate how willing others would be to provide assistance when requested. There is a social cost to saying ‘no’ when someone asks for help. The person can be seen as uncaring, unreasonable, insensitive, and even cruel. Saying ‘yes’, by contrast, is a more positive and rewarding experience, and agreeing to help or cooperate strengthens the bond of connectedness between people. By making someone else happy, the person who has agreed to help also feels good about himself or herself and strengthens the bond of connectedness between them.
Researchers have demonstrated that people underestimate by nearly 50% the likelihood of receiving a positive response when requesting assistance, and this leads to lost opportunities, like prospective friends, colleagues, and clients going uncontacted, and squandering chances to increase connectedness. When you feel a sense of connection with someone else, you are more likely to volunteer your assistance, as is often demonstrated by onlookers who are most predisposed to help emergency victims if they feel they share something with them.
Developing leadership ability through high-quality connections
Feeling connected to the people you are working with enhances feelings of wellbeing and fosters greater commitment to colleagues. Research documents that high-quality connections contribute to people flourishing, resulting in better health, higher cognitive functioning, broader thinking, and stronger resilience. Individuals with high-quality relationships also have a better sense of whom to trust and not trust. They are more open, and they more fully understand themselves and the viewpoints of others.
You can more effectively develop your leadership abilities by connecting to people who can teach you about the skills you would like to acquire and the things you would like to achieve. Find out about their struggles, hardships and mistakes as well as their accomplishments.
Consider connecting with people who are not particularly well known but who nonetheless exhibit deep competence, unswerving dedication, and a good sense of who they are. Most importantly, select people who make you feel good about yourself. After all, the purpose of these relationships is to encourage and inspire you to be your best version of yourself.
Travis Carrigan, a senior engineer, told us that he’s been doing exactly this for years, which has led to some great opportunities and collaborative work. ‘These relationships,’ he says, ‘are phenomenal at helping me become a better leader, listener, and engineer.’
Limitations of virtual connections
What about virtual connections? Aren’t they a good way to foster collaboration and build trust? There is no question that virtual connections are prolific, and in a global economy no organisation could function if people had to fly halfway around the world to exchange information, make decisions, or resolve disputes. Proof of this can be found with the exponential growth in virtual communications during the global Covid-19 pandemic, and that demand has led to the development of new apps and platforms to meet the need. With a large percentage of people working from home and almost all educational institutions’ classes going online, virtual connections became the most frequent way in which people communicated, learned and conducted business.
That said, the stroke of a key, the click of a mouse, or the switch of a video doesn’t get you the same results that an in-person conversation does. In an era that is becoming more and more dependent on virtual connections, there’s a temptation to believe that such connections automatically lead to better relationships and greater trust. Unfortunately, virtual trust is much more difficult to both build and maintain than is trust developed in-person. Even among Gen Z employees, who make up 20% of today’s workforce, 72% indicate they prefer face-to-face communication at work.
Virtual trust, like virtual reality, is still one step removed from the real thing. People are social animals; it is their nature to want to interact face to face. Bits and bytes and pixilated images make for a very fragile social foundation. As handy as virtual tools such as email, voice mail, apps, and texts are for staying in touch, they are no substitute for positive face-to-face interactions.
Making the shift to a successful hybrid workplace demands a different leadership approach – one that moves away from micromanagement and towards a culture of trust and transparency, says Hult Professor, Vlatka Hlupic
The global economy has been left in a fragile state following lockdown measures, many of which have been prolonged at the time of writing this article, leaving further uncertainty on how businesses will recover. What is certain, however, is that business leaders and organisations must adapt and recalibrate to survive and thrive in the post-pandemic world and create high-performing hybrid workplaces.
Instead of a traditional top-down leadership approach based on command and control, hierarchical decision-making and micromanagement; high-performing hybrid workplaces will need a different leadership approach which is more shared and distributed. This type of leadership corresponds to levels four and five of a framework, called ‘The Management Shift’. In this framework, there are five levels of an individual mindset and a corresponding organisational culture at every level. Each level is characterised by specific thinking patterns, behaviour, language used, leadership style and organisational outcomes.
Five levels of overriding mindset and organisational culture
At level one, a dominant mindset is ‘lifeless’; culture is ‘apathetic’, based on fear and employees are isolated and disengaged. At level two, the individual mindset is ‘reluctant’; culture is ‘stagnating’ and people do the minimum they can get away with, just to get paid. There is a blame culture, and employees feel overwhelmed. At level three, the mindset is ‘controlled’ and culture is ‘orderly’. The leadership style is based on traditional command and control, employees are micromanaged, and they do what they are told to do, but they are not purposeful, fully engaged, or passionate for their work.
At level four, the dominant mindset becomes ‘enthusiastic’; culture is ‘collaborative’ and there is a strong teamwork ethos. Collaboration, integrity, purpose, transparency, accountability, and a caring culture are embedded in this level. This is also the level where a ‘Big Shift’ takes place and where highly engaged and inventive performance begins.
At level five, the mindset becomes ‘limitless’; culture is ‘unbounded’ and anything seems to be possible to achieve. This is where great innovations are developed and big problems for humanity are solved. However, this level can only be sustained for a limited time, as employees will ‘burn out’ if they work continually at this pace.
So how do leaders make the ‘Big Shift’ in their leadership styles to ensure their organisations are led in a way that gets the best out of their people in this new hybrid workplace?
Practices and behaviours that leaders should embrace
Leaders should support autonomy and collaboration and encourage experimentation with new ideas. They can influence employees indirectly through empowerment and inspiration, and create the conditions for change, where they delegate responsibilities, not tasks. Delegating tasks is micromanagement. When leaders delegate responsibilities, they show that they trust their employees to do their work well and employees will decide when, where and how they are going to do their work. They will be accountable for the deliverables – this is the key because, during a time of remote working, it is impossible to micromanage and control how and when the work gets done.
Leaders should also decentralise decision-making based on knowledge rather than a formal position in organisational hierarchy. People with the best knowledge, with the best insight into customer’s needs and requirements are best suited to make certain decisions, rather than somebody at the top of the hierarchy who doesn’t interact with customers.
Leaders need to develop cultures based on trust and transparency. This is particularly important for the hybrid world of work. It is vital to give a clear strategic direction for employees and communicate that well. That will create a sense of security and resilience, which will then also support the wellbeing of employees. Leaders also must support reward mechanisms that are based on contribution and meritocracy, especially as they cannot closely control employees that work remotely. They should focus on the results achieved, not on the time spent in the office or time spent at work.
Leaders need to use, and act, on feedback – and that should go both ways. In hybrid workplaces, feedback is even more important, not as a traditional yearly performance review, but rather as a continuous feedback conversation. Leaders should hone and use their social intelligence and emotional intelligence to get, and act on, the clues when something is not right even if employees are not directly sitting with them in the office all the time.
Successful leaders of hybrid workplaces allow some flexibility with procedures, rules and regulations, within reason. Even in heavily regulated and compliant environments, such as financial industry, there are still parts of the business that need to be creative. Here, leaders can relinquish control and allow employees to take their own initiative, make decisions and pursue some of their own initiatives for the benefit of an organisation, especially when innovation is important part of what organisation does. Without that, no progress and no innovation will emerge.
Leaders that embrace a level four mindset and behave like level four, and occasionally level five leaders, will create the conditions that are conducive to successful, highly productive and engaging hybrid workplaces.
To this end, it is important to allow people to work from home for at least half of the working week. At the same time, leaders should create office environments which entice people to spend some time there, interacting and networking. Human connections often lead to the creation of the best ideas.
Every change starts with one single step that creates ripples. What is one action that you can start implementing from next week to help create a high-performing hybrid workplace?
Vlatka Ariaana Hlupic is a Professor of Leadership and Management at Hult Ashridge Executive Education, Hult International Business School. She is the founder and CEO of the training, coaching and consultancy firm, Management Shift Solutions as well as the author of The Management Shift and Humane Capital.