Business model success demands strategic leadership, societal consciousness and civil cultures
I wonder if the editors of the January-February, 2013 issue of Harvard Business Review connected the dots among their articles. As a reader I did.
“The 100 Best CEOs in the World” is the cover story for an issue that also includes the article “Strategic Leadership: The Essential Skills.” Too many CEOs and their C-Suite teams invest too much of their time in operational management. They fail in the role only they can perform: designing a winning portfolio of business models and the hard-to-copy company capabilities, processes, culture, and ecosystems that they leverage. Strategic leadership is all about this work.
I am not saying that operational work is unimportant. Indeed, it is vital. No customer will pay your business for inefficiency or quality issues, and competitors will likely use them to seize advantage. But the leadership team’s role is to establish the measurements, set hiring standards, allocate resources, and design operating mechanisms to advance efficiency, effectiveness, and financial performance — not to be the day-to-day doers of this work.
What then are the essential strategic leadership skills? Based on their research involving 20,000 executives, authors Paul Schoemaker, Steve Krupp and Samantha Howland (Wharton School of Business at the University of Pennsylvania) define it as a collection of six abilities:
- To anticipate
- To challenge
- To interpret
- To decide
- To align
- To learn
As the world becomes more uncertain and volatile, the ability to anticipate — to see past one’s paradigms to understand the potential implications of external trends — rightfully belongs at the top of the list. External changes give new entrants and laggards their only shot at stealing share from a competent leader.
Great leaders challenge the status quo, their own assumptions and those of others — stated or hidden. They make sure any problem is looked at from multiple angles. My recommendation to leaders is to always appoint a devil’s advocate in any discussion to avoid group-think.
Interpretation demands conceptual thinking skills, pulling strategic insight from a collection of observations. One of the roles of the Chief Strategy Officer from my perspective is to bring stellar skills in this area. As marketing becomes increasingly technical and focused on demand management, the need for a Chief Strategy Officer has never been higher.
Decision and alignment come together in my mind. Great leaders make disciplined decisions that ensure actions are aligned with the underlying business model strategy. The authors include in alignment being able to pull people together around a shared vision, using skills of communication, trust-building and frequent engagement.
The ability to learn was spotlighted in the early work of Peter Senge. But it is amazing how many cultures are focused on finding fault rather than learning. According to Schoemaker et al., one CEO built a learning organization by publicizing stories of projects that initially failed and using them to create successes. He encouraged cross-functional teams to engage in novel experiments and report results whatever the outcome, and initiated an internal innovation tournament. He also admitted his own failures and what he learned.
Other articles in the HBR issue pointed to two other traits I would add to the list of strategic leadership skills. In “The Kind of Capitalist You Want To Be,” Whole Foods founder and CEO John Mackey argues that great leaders are conscious capitalists, building businesses that are good for the world, not just shareholders. Mackey’s business success gives him the authority to make this claim.
What is a business after all but an efficient solution to meeting a need or solving a problem? The world’s greatest problems are in the social and environmental world. If leadership teams took off the blinkers that divide the world between for-profit and non-profit, they’d see rich opportunities to grow their business and enrich all their stakeholders.
Finally, Christine Porath and Christine Pearson, in “The Price of Incivility,” make a great case about how a lack of civility costs more than the legal cases that end up in the court. The culture of a company starts in leadership and the norms of behavior that leaders demonstrate: who is promoted, how people are treated, and what values actually drive decisions. When the culture does not respect the individual, employees contribute less than 100%. Lost work time, lost productivity, voluntary exits, lost commitment, and taking frustration out on customers are among the costs of civility documented by the authors. (Also see Steve Paskoff’s brilliant work at ELI for more on this subject.)
Apple CEO Steve Jobs failed on the civility front according to his recent biography. One can’t help but wonder if this hole in his legacy will be like a virus that keeps Apple from succeeding now that teams versus one individual must make the right calls in his absence.
If your business model is failing, might your culture or your strategic leadership skills be a root cause?