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A Blueprint For Transformative Leadership: Key Questions for Leaders

Transforming in the face of adversity often hinges on the ability to effectively interact, relate and communicate—in times of crisis, the ability to leverage your EQ and “read the room” is critical.

Editor’s Note: On a recent webinar hosted by Chief Executive Group, AlixPartners’ Ted Bililies and Eric Koza answered questions about the role of a transformative leader in difficult times and how CEOs can leverage their EQ to achieve sustainable success.

AlixPartners’ Ted Bililies

“The good news is that there absolutely are ways for CEOs and Board members to increase their emotional intelligence and reap the benefits of being a truly transformative leader,” says Bililies. Here’s more from the session:

The real capability of a leader comes out under stress – how should CEOs efficiently manage pressures from stakeholders (especially their Boards) when faced with difficult macro and/or internal circumstances?

Eric: It’s a great question that many CEOs are living through today. A CEO must be in constant communication with key stakeholders, including employees, customers, suppliers, and the Board. During these times, difficult decisions arise whether it be plant or facility closures, furloughs, pay reductions, spending cuts, order cancellations, operating model changes or financing to shore up your balance sheet. For some companies, it’s about survival, and for others it’s about adapting and developing new operating models. It’s important to not only get this right, while clearly communicating the direction the company is headed. During times of stress — especially in our current state of limited face-to-face interaction — being overly communicative and checking in more frequently on safety concerns, career development challenges or balance sheet considerations, will help manage any pressure or expectations from others.

Ted: I completely agree with Eric and would tack on to that the necessity of decisive communication. Amid any type of change, people need to feel reassured that the person or people in charge are balancing the hard choices necessary for business survival or transformation success with empathetic messaging that acknowledges the difficulties facing the organization. I believe in a previous Chief Executive webinar that I was fortunate to participate in, I brought up the idea of the “Stockdale Paradox”, named after the famed Vietnam War POW, Medal of Honor winner, and American hero, James Stockdale. Imprisoned in the Hanoi Hilton for seven and half years, Stockdale never gave up hope that he would eventually be freed, but also had to realistically confront the brutal facts of his captivity. CEOs and Boards should remind themselves of the Stockdale Paradox and take it to heart when deciding on how they are communicating with their stakeholders: be direct, honest and transparent about the factors that are affecting your business, the hard choices that will have to be made, and of course the values that guide your decision, but never give a hint of doubt whether the leadership will give up from the objective of navigating the organization through tumult towards better outcomes.

To get more specific, what is the role of a transformative leader in the midst of a turnaround or restructuring? How does he/she leverage their EQ to navigate the organization to sustainable success?

AlixPartners’ Eric Koza

Eric: The primary role of a transformative leader is to establish the high-level goals of a turnaround or restructuring and ensure that the right people with the right resources are in place within the organization to effectuate a sustainable turnaround. These leaders are decisive and yet agile and have the ability to rethink traditional business models that may lose purpose and or become disintermediated.

For example, some executives are faced with new ways to work, communicate, sell, protect employees, or deliver goods and create distribution channels. Certain industries will be impacted more severely than others, so there’s no “one size fits all” approach to any solution.

Many successful leaders have found ways to transform in the face of adversity, and more times than not, it hinges on their ability to effectively interact, relate, and communicate. In times of crisis, the ability to leverage your EQ and “read the room” is critical.

Ted: In the middle of a turnaround or restructuring there are several things a leader can do to leverage their EQ to affect a better outcome. One very basic competency mentioned above is to overcommunicate. This means listening as well as speaking; soliciting the best ideas from members of the team and getting buy-in from key supporters. Second, it really matters to get the right people in the room and to be flexible and adaptive in both thinking and dialogue. Third, our work shows time and again that leaders who can think systemically – who see the complexity and interdependencies of the various points of view – lead more effectively than those who are making “one off” or separate conversations and plans. This last point is an important one and there’s a reciprocal benefit here as well: the senior turnaround expert should challenge themselves to explain their planning and decision-making process to a junior professional on their team. This is a valuable professional development experience for the junior, and it also serves a valuable forcing function for the senior to make explicit what might otherwise be intuitive but under-communicated decisions. 

Ted, given the importance of EQ in CEOs and Boards, are there ways to increase this through evaluation and coaching? What processes would you recommend?

Ted: The good news is that there absolutely are ways for CEOs and board members to increase their emotional intelligence and reap the benefits of being a truly transformative leader. We should begin by noting that there is quite a lot of research that shows that executives regularly overestimate their EQ, so it is important to get some sort of objective measure at the outset from an executive consultant, preferably one who has rigorous training in psychological assessment. Second, I would recommend reading some of the seminal work in this area; it is not hard to find. EQ is a broad concept, incorporating several different constructs like self-regulation, social sensitivity, empathy, and motivation. Make sure you get educated on what it is — and what it is not. Third, once you have chosen the specific areas to work on, get a qualified coach or consultant to work on a behavioral plan for you. Is it listening and taking the perspective of another person that trips you up? Are you an introvert and is showing personal vulnerability a problem? Do people know what you believe in and how you make decisions – do you need to practice how to discuss the “softer” side of your leadership? Developing your emotional intelligence is not only possible but it can also be very enjoyable, and the rewards can be truly life-changing – as many an executive’s spouse can attest!

Eric, you’ve worked on dozens of high-stakes turnarounds and restructurings, what leadership traits among the CEOs you partnered with really stand out as success stories?

Eric: We’ve seen success with those CEOs who have demonstrated empathy, speed-to-action, decisiveness and agility and, perhaps most importantly, continuous communication with the employee base and key stakeholders. Some companies have been more challenged when complicated by management teams that were paralyzed or slow to adapt, not people-focused or unable to anticipate changes to their end-customer needs. Having the right leadership and advisors can make or break a successful transformation.

Bringing our crystal ball out – how do you both see the evolution of leadership as organizations face continued disruption even post-Covid (technological advances, reskilling workforces / mass displacements, etc.)?

Eric: I think the successful characteristics of leadership – communicative, action oriented, decisive, agile, and empathic – will become even more critical in organizations facing the vicissitudes of corporate life. Pre-Covid-19, we saw a company’s ability to adapt to disruptive forces – technological shifts, environmental awareness, societal changes and regulatory considerations – as the primary economic driver of a company’s success. Now, public health has transitioned from a disruptive factor to the disruptive factor and the effect on business operations is unlike anything we’ve seen before – and leadership is critical. And as we move forward, I expect the criticality of effective leadership to only increase given the continued acceleration in business disruption.

Ted: I see the disruption of conventional leadership as the story-within-the-story of this pandemic and, indeed, of the many disruptions we are navigating around the globe. Old models of leadership – top-down, transactional, charismatic man or woman, etc. – are simply inadequate to meet the pace of change and the very acute needs of the human condition. The pace of change will never be slower than it is today. It will take transformative leaders to face disruptive forces head on while motivating and inspiring their people to increased returns for all stakeholders. Without leaders who can empathetically and decisively provide an evolving vision and purpose to organizations facing nonstop disruption, even the most advanced technologies or highest-paid workforces will eventually face friction, decay, and ultimately consignment to the dustbins of history.


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