Raconteur

Future CEO 2019

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R A C O N T E U R . N E T 7 s baseball great Yogi Berra once said, "The problem with the future is that it ain't what it used to be." And the future world of the CEO will be very different from the one in which most CEOs have learnt their current leadership skills. The converging tends of technology, diversity, Generation Y and globali - sation are creating a brutal storm of transparency, a world where nothing can be hidden. The future CEO will be held to a ruth- less accountability by educated stake- holders who are expecting a broader contribution than making lots of money. These educated stakeholders will have an agenda that incorporates social jus- tice, climate change, inclusivity and mental wellbeing. A leadership job that was already dif- ficult is going to require a whole new set of skills. The future CEO is going to require a new licence to lead. Are you up for the challenge? The new licence of leadership will require CEOs to rely upon the power of trust rather than trusting in power. What does this mean? It means that tra- ditionally our leadership credibility has been earned through intellectual prow- ess and the expert use of authority to maximise singular outcomes, such as maximising profit. However, in a world where defer- ence to authority is collapsing and pur- pose-led, emotionally intelligent leaders are coming to the fore, our leadership credibility will need to be earned from building human trust, not exercising expert authority. To build human trust, the research demonstrates that CEOs will need to work on three mutually reinforcing capabilities: ability, integrity and benevolence. Indeed, the formula for trust is: trust = ability × integrity × benevolence. When I share this formula with the CEOs I coach, most instinctively under - stand the need for ability and integrity, but few have a grasp of this word "benev- olence", which means wishing well for others. It's common human care, com- passion and kindness. None of the CEOs I work with have attended the "introduction to benevo- lence" course for senior leaders because in the old world, benevolence was a nice- to-have. In the new world, which relies upon the power of trust, benevolence becomes the must-have differentiator that renews our licence to lead. How does a CEO do benevolence? Through my own research at Aston Busi- ness School, we can now identify that there are nine habits of trust, three for each of the components of ability, integ- rity and benevolence. The three habits of benevolence are evangelise, be brave, be kind. CEOs who evangelise get on the front foot to spread the good news about their busi- ness and their brand. They counter the tide of social-media cynicism with an equally relentless and passionate cam- paign to promote an inspiring, pur- pose-led vision. CEOs who are brave know there is a moment when the leader is expected to self-sacrifice in support of a goal that is bigger than their own personal survival. It is a quaint idea, but moral bravery inspires trust. Finally, benevolent CEOs have the capacity to be kind. This does not mean they do not make tough decisions, are not performance focused, clear eyed and strategic. What it means is that as they do all those things, they retain the capacity to connect with their fellow human beings and treat them with dig - nity and respect. As one leader I interviewed put it, "The CEO doesn't need to do everything, but they do need to care about everything." So are you one of these future CEOs? Do you have the will to renew your licence to lead in a world where nothing can be hid- den? Can you do benevolence, alongside doing ability and doing integrity? If "yes", then you will be glad that the future ain't what it used to be because you will come to find that now is your time. 'The new licence of leadership requires CEOs to rely upon the power of trust rather than trusting in power' O P I N I O N A Dr John Blakey Author of The Trusted Executive Founder of The Trusted Executive Foundation Ending shareholder primacy, for good The idea that a company's environmental footprint, employee welfare and social impact decides how its leader is assessed is gaining traction C O R P O R A T E P U R P O S E eing a chief executive (CEO) has never been easy. But at least those stepping into the top job used to know what was expected of them: grow revenues, increase margins and, do or die, deliver profits. Yet over recent years, the job spec has begun to look fuzzier. In the era of Extinc- tion Rebellion and "We are the 99 per cent", profit-making alone no longer seems to cut it. Private sector leaders are under growing pres- sure to show the companies they manage are helping, not harming, society. Consumers want such a shift, employees expect it and campaigners, together with a handful of progressive investors, are vocally demanding it. More surprising, a small but growing number of CEOs appear open to delivering it. In a ground-breaking move last summer, the 180 or so US CEOs who comprise the usu - ally conservative Business Roundtable com- mitted to "lead their companies for the ben- efit of all stakeholders". If such statements are to be more than empty rhetoric, it will require top bosses to reassess old-style leadership norms prem- ised around profit maximisation. But what might alternative leadership models look like? And how can companies go about acquiring them? Both are questions to which Katell Le Goulven has given considerable thought. As head of the new Hoffman Global Institute for Business and Society at INSEAD, the French business school, Dr Le Goulven's mandate is to equip the business leaders of tomorrow. New management skills and decision-mak - ing tools will play an integral role, she notes. How many CEOs know what an environmen- tal profit-and-loss report is, for instance, let alone how to interpret one? Which of the cur- rent crop of CEOs can intelligently discuss the strategic implications for their companies of "blended finance", "stranded assets" or "scope 3" (indirect) emissions? Of course, new knowledge can always be taught. What's more important, Dr Le Goulven argues, is a "change of mindsets". Orienting a company to meet the needs of society, and not just the interests of share- holders, cannot be done as an add-on to the main job; it is the main job. As she says: "For the 21st-century CEO, sustainability should not be an afterthought, but rather a central consideration in the val- ue-chain creation of their company." Jay Coen Gilbert makes a similar case. CEOs need "viable alternatives" if they are realistically going to switch course and pursue a more inclusive form of capital- ism, says Mr Coen Gilbert, who co-founded a network of ethically certified companies called B Corps. Such models are beginning to solidify, he adds. The idea of stakeholder capitalism is not new, after all. Indeed, notions of "triple bottom line" (economic, social and environ- mental) management have been floating around for more than two decades. What's changed is the urgency of the societal and planetary issues at hand As important as management toolkits and strategy techniques are, the journey for tomorrow's CEO starts with both head and heart. The first requirement for any business leader is to accept that the current system isn't working, Mr Coen Gilbert told 600 European CEOs and senior executives at B Corps' annual summit in Amsterdam. "If you don't believe the system is broken, then there is no reason to change," he reasoned. Should such a mind-shift occur, the implications for CEOs are profound. For one, expect business leadership to become more personal. Business leaders can't fake concern. To engage authentically with the issues preoccupying their consumers, cli - ents and staff, some level of emotional con- nection is essential. This doesn't mean becoming touchy- feely. Running a corporation remains a hard-nosed affair, with profitability still a vital, if no longer solitary, requirement. It's more a question of sensitisation and being willing to give up the air-tight cocoon of the boardroom, for example, or to listen seri- ously to critics. Another implication centres on politics. Business does not act in isolation. Compa- nies form part of a publicly agreed ecosys- tem, with rules and boundaries set by poli- cymakers and legislators. If this ecosystem is broken or in need of change, it follows that political action is required. As Ryan Gellert, Europe, Middle East and Africa general manager for the out- door apparel brand Patagonia, puts it: "It's no longer enough to fund activism. We now have a real responsibility to wade in ourselves." It's a message he takes direct from his boss, Patagonia founder Yvon Chouinard, who last year declared his company would donate to environmental charities the $10 mil- lion it saved in corporate ta x breaks intro- duced by US President Donald Trump. The move followed Mr Chouinard's deci- sion to sue the Trump administration for reducing the size of two protected land areas in Utah. And it's not just maverick CEOs who are following his lead. Earlier this year, the bosses of 13 major multinational compa- nies put their names to a cross-sector coa- B Oliver Balch The real heroes of this movement are those who took a visible right turn and started doing things in a different way lition calling on the US gov- ernment to mandate a robust price on carbon emissions. Sig- natories of the CEO Climate Dia- logue count the leaders of US bank Citi and, perhaps most surprisingly of all, oil giants Shell and BP. A f ina l implicat ion relates to push- back. Opposit ion to cha nge is inev ita- ble. No sooner had t he Business Round- table relea sed it s recent statement, for exa mple, t ha n t he inf luent ia l Council of Inst it ut iona l Investors sla m med it for undercut t ing "ma na ger ia l accountabil- it y to sha reholders". All of which suggests that tomorrow's CEOs will need the courage of their convic- tions. Precedents exist. Douglas Lamont, CEO of UK beverage firm Innocent Drinks, points to trailblazers like ex-Unilever boss Paul Polman and Danone's current CEO Emmanuel Faber. "As a CEO, you are very visible and the choices you make are very visible. So the real heroes of this movement are those who took a visible right turn and started doing things in a different way," says Mr Lamont. Good CEOs always have one eye on the future. The smartest know that the days of shareholder primacy are ending. But it's the bravest who are stepping out and pointing the way forward. Providing complete lifecycle support, from strategy, review and sourcing through to delivery assurance. Our consultants use their expertise to complement client capabilities. Covering Architecture, Sourcing, Service Management and IT Operating Model. If not, email FutureCEO@masonadvisory.com or phone and we will be delighted to discuss further Do the IT services in your organisation align with your current and future business needs? Does your organisation have the skills and IT capabilities to ensure you deliver the required business outcomes? Do you understand the full cost and value of delivering IT not just now, but in the future? Do you fully understand your cyber security risks and have the right protection in place? Do you have access to all the leading practice advice that you require? @MasonAdvisory +44 (0)333 301 0093 www.masonadvisory.com /mason-advisory-limited Shaping technology to support your company's future 50% higher productivity on average for companies with a high trust culture Harvard Business Review 2016

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