In the first part of this two-part series, authors of BEYOND GREAT: Nine Strategies for Thriving in an Era of Social Tension, Economic Nationalism, and Technological Revolution (October 6, PublicAffairs), offered four steps CEOs can take to enable their companies to achieve a state of “always-on transformation.” The book outlines nine strategies for incumbents to thrive when the very notion of outstanding business performance is being reinvented. In the excerpt below, they explore the leadership traits CEOs need to thrive in this new era of social tension, economic nationalism and technological revolution.
Let’s say you’re the new CEO of a global firm, or you’ve just been nominated by the board’s selection committee to become one, or you aspire one day soon to receive a nomination. What specific leadership traits or mindsets will you need to succeed? How should you best approach leadership so as to leave a strong legacy of growth, financial success and meaningful social impact?
We wish we could offer a simple framework that encapsulates everything you’ll need to do, but that would trivialize the task at hand, and it would also fly in the face of what we have learned from the many leaders who have contributed to beyond great. Instead, we offer some reflections gleaned from our many interviews with leaders who were, in one way or another, moving swiftly to go beyond great. These conversations suggest that beyond great leadership would appear to consist, in its essence, of six fundamental imperatives.
First, leaders must lead with conviction to positively impact society. Stakeholders are demanding more of companies. If they want their firms to thrive, leaders must abandon traditional strategies bent only on maximizing returns to their shareholders and measure themselves against a higher bar: the ability to impact all stakeholders positively. With pandemics and pandemonium to contend with, employees and customers are increasingly desperate for meaning, and they long to associate themselves with organizations that are inspired and guided by a sense of purpose. They also look skeptically on organizations that have espoused purpose in the past but have stopped at surface purpose— posters and slogans but nothing more. Employees and customers are looking to—and longing for—leaders who understand their human need for meaning and are taking the actions required to benefit society in profound ways.
Reflect seriously on how you and your firm might engage to address social and environmental problems. To deliver total societal impact, you’ll have to take it personally. It’s not enough to simply believe in TSI—you must become your firm’s chief purpose officer. As Siemens’s CEO-elect Dr. Roland Busch told us, “The leader has to define what the company stands for, which goes above and beyond the latest and greatest technology, and [he or she has] to give something meaningful to the company.” In particular, the CEO must galvanize operational leaders and managers. Otherwise, a disconnect will emerge, and business units will pursue business as usual. Satya Nadella put it starkly as well, remarking, “The most useful thing I have done is to anchor us on the sense of purpose and mission and identity. There is a reason we exist.”
Second, leaders must pivot from a command-and-control mindset to a more collaborative, agile-friendly approach. For centuries, leadership has largely entailed some form of command and control. Leaders have set the direction, commanded people to follow it, and instilled a set of controls to ensure that they comply. This orientation remains deeply embedded in the psyche, experience, and practice of most leaders today. Because going beyond great requires speed in a volatile world, leaders must break with the past and take a much more open and collaborative approach. Rather than trying to exert control at every turn, leaders must focus on gaining alignment and then granting autonomy. They must empower and coach, pursuing pace over perfection. Beyond great leadership also requires leaders to role model agile ways of working for others in the organization.
Natura & Co chairman and CEO Roberto Marques pointed out to us that no leader can hope to have all the answers in a world that is changing as rapidly as ours. Instead, leaders have to recruit others with the capacity to develop solutions, amplifying and expanding their efforts rather than directing them. “You have to empower your teams,” he said, “understanding that there are going to be people on the ground business and functional areas that will have the right answers, and that will know more than I do.” As he further remarked, leadership today entails having the self-awareness to acknowledge you don’t even know what you don’t know and the humility to listen to others. Leaders have to communicate well, “reaching out to the organization in a way that will allow you to get information back that will help you make the right decisions and course correct when necessary.”
Third, leaders must guide their firms to become far more open-minded toward their peers—small and big, in the industry and beyond—than they were previously. Firms long have sought to deliver value to customers by deploying strategies limited almost exclusively to the firm itself. Relationships between companies that did exist were formal, and partnerships with customers and competitors were rare. Leaders regarded their companies as operating within a closed system, with competitors located squarely outside. It wasn’t uncommon to see banners in production facilities exhorting workers to beat the enemy—the primary competitor.
Companies today are increasingly delivering value by participating in open constellations or ecosystems of companies across industries, sizes, and geographies that can include competitors. As Tata Group chairman (and former CEO of Tata Consultancy Services) N. Chandrasekaran remarked, the power in markets “is shifting from companies to ecosystems.” Each company must decide what role it might play in its ecosystems so as to create a favorable balance between the value it contributes and gleans. Leaders today must not only embrace this radical new mindset, sourcing ideas and talent from beyond the firm and constantly seeking out partnerships to deliver greater value. They must also help their people to do so as well. Natura’s Roberto Marques noted that constant open two-way communication across a broader ecosystem (which in Natura’s case includes tens of thousands of employees as well as millions of customer-facing sales consultants) is “the oxygen for the organization to continue to evolve.”
Fourth, leaders must elevate and embed a continuous learning mindset. Going beyond great challenges many implicit and explicit assumptions about what it takes to succeed and thrive. Leaders must unlearn old ways of seeing, thinking, and acting in favor of something new, and they must do it on an ongoing basis. As colleagues of ours have pointed out, the capacity for constant ongoing learning will undergird a company’s (and an individual’s) ability to compete. As a leader, you must be prepared to spend far more time and energy learning than you have in the past. With technology, customers, and external conditions evolving so rapidly, you can no longer take for granted your existing assumptions about your business. As Tata Group’s N. Chandrasekaran reflected, “Every company has to ask this, from the perspective of my product or service—what is my new value chain? Or what ecosystem do I fit in? Unless you have clarity in this, you can’t build a good strategy.” Leaders must also model for the rest of the workforce the intellectual flexibility and dynamism that employees, too, will need to display during their careers as they partake of upskilling and reskilling.
As Siemens’s Dr. Roland Busch related, staying tuned and learning is the only way to stay abreast of technology. Accordingly, he makes a point of traveling once or twice a year from Germany to the West Coast of the United States to meet with both large IT firms and start-ups, simply to gain an understanding of their activities. He encourages middle managers at Siemens to do the same. “I really care about this,” he said, “and hope that the layers [of management] below me are mimicking me, saying, ‘Oh, if this guy does it, I have to do the same.’” On one occasion, Busch took his core leaders to a two-day workshop in San Francisco to meet with technology firms. “We talked about technology development and how they see Siemens and our ecosystem, what its shortfalls are, how we might be able to improve it. It was really a 360-degree meeting, so to say, it was amazing.” Busch added that learning in his view encompasses not simply technology but personal growth as well. Leaders have to “stay curious and [embrace] lifelong learning. If you give up on this, you have lost already.”
Fifth, leaders must embrace transformational leadership. As we’ve seen, always-on transformation has to become business as usual in our era of disruption and change. The risk, of course, is that people in organizations attempting such an ongoing never-ending evolution will become overwhelmed and fatigued. To avoid such malaise and buttress an organization’s capacity to thrive on constant change, every leader must become a transformational leader, embracing a holistic human-centered approach that entails engaging simultaneously with the head, heart and hands.
Leaders must provide clarity of direction, pursuing an iterative process in which they take stock of the disruptions the company faces, envision a future across the nine strategies, and align the organization to embark on the journey (head). They must motivate and inspire teams to behave more confidently and perform at their best, demonstrating care and empathy, actively listening and coaching and empowering everyone (heart).
Finally, leaders must mobilize their organizations in the more open, collaborative approach to executing and innovating with agility described previously, encouraging practices that foster creativity and agility (such as colocation, daily stand-ups, working in sprints, and fast-cycle learning) and emphasizing the need to invest in and develop much-needed capabilities both human and digital (hands). Microsoft CEO Satya Nadella has embodied a head-heart-hands leadership model at Microsoft, describing respectively how important it is for leaders to “create clarity,” “generate energy,” and “deliver success.”
Sixth, leaders in the 21st century must develop a new ability to navigate through ambiguity, tension and paradox. Leaders must steer their organizations to learn, rethink and experiment on the one hand and ground their organizations in elements of the business that are stable and unchanging. They must compete ferociously with their peers and collaborate with them as never before. They must push their companies to be both global and local. They must cultivate fluidity and stability in the organization. Great during the twentieth century meant pushing hard on one element of a binary and excelling. To go beyond great, leaders must feel comfortable with handling both elements of a binary, and they must help their people feel comfortable as well.
When leaders go beyond great, they embolden their companies to take charge of their own destinies and master our volatile global business environment rather than remain imprisoned in it. Rather than simply growing their existing businesses, their companies broaden their horizons and launch boldly into entirely new competitive spaces. Each of the leaders consulted here—Chandrasekaran, Marques, Busch, and Nadella—exemplifies beyond great leadership. Each has led his firm to deliver peer-leading shareholder returns while creating an organization that is resilient, socially responsible, and a magnet for young talent. Each has fundamentally transformed his firm: Chandrasekaran made TCS more agile, innovative and entrepreneurial; Marques led Natura to build a unique relationship-driven operating model founded on the idea of collaborative networks; Busch is helping his organization adapt its strong, internally focused, technology-driven culture to become more open and sensitive to global issues and local markets; and Nadella rallied Microsoft around a bold new purpose.
What legacy will you leave? As you pursue the strategies for building new forms of competitive advantage, galvanize your people to pursue a broader social impact as well as shareholder returns. Become more collaborative and less directive. Treat others in your space as collaborators as well as competitors. Exemplify a growth mindset. Become a transformational leader. Embrace ambiguity, tension and paradox. The journey beyond great is wonderfully fulfilling and enriching for everyone involved. And it all starts with you.