The Ambidextrous Leader

Conference Board (https://www.conference-board.org)
reports an alarming churn at the top of the largest corporations. In the first
fifteen years of this century, almost 25% of CEO departures from the Fortune
500 companies have been reported as being
involuntary.
A PwC report on the 2,500
largest companies denotes the huge cost of forced turnover – a mind-boggling
$112 billion loss in market value
annually.
Leaders today are under
enormous pressure to perform. Short-term orientation is all pervasive, and no one appears to have the time
to think about the long-term. Activists and major investors want to see the performance on a daily basis. Even a little
deviation from the projections can have catastrophic consequences.
Whistleblowers appear to have found a new voice and also the media to spread
the message like wildfire. Sometimes, the distinction between the messenger and
the message is blurred to the point of
irrelevance. Add to all this the constant search for breaking news, the ever
expanding reach of social media, and the propensity for alternative facts to
spread faster than the speed of thought, and you have the perfect recipe for
disaster at every step.
Charles O’Reilly and Michael
Tushman wrote in 2004 (HBR, April 2004) about the ambidextrous organization –
an organization simultaneously capable of exploiting the present and inventing
the future. In recent times, Vijay Govindarajan has added a third dimension in his Three Box Solution (HBR Press, 2016) - jettisoning the irrelevant past.
Today, there appears to be a
dire need for ambidextrous leaders.
On the one hand, leaders need
to be decisive – about everything from disruption to diversity to sexual
harassment. If you look at classical decision-making models, they have many
steps involved. Information gathering, analyzing alternatives, and thinking
through the consequences can all consume precious time. Snap decisions based
mostly on intuition may be fashionable but can have serious repercussions.
On the other, leaders need to
be good listeners. You can never predict where good news (or bad news, for that
matter) is likely to emanate. Even harder to predict is the impact of time on
how you respond to the news.
Here is the paradox. With honorable
exceptions, decisive leaders are not good listeners. Those who have the
patience and the attitude to listen, and to filter out the noise, tend to be
ambivalent, waiting for any extra bit of information that might improve the
outcome. In other words, listeners are not expected to be decisive in ways that
many stakeholders seem to interpret the trait.
In their excellent HBR article (What Sets Successful CEOs Apart; HBR; May-June 2017), Elena Lytkina Botelho et al. suggest four guiding principles:
Deciding with speed and
conviction – 12 times more likely to be high-performing CEOs.
Engaging for impact – deftly
engaging with stakeholders results in success being higher by 75%.
Adapting proactively – 6.7
times more likely to succeed than those who focus only on the short-term.
Delivering consistently – those who scored high on reliability
were 15 times more likely to succeed as CEOs than those who could not keep the
promise.
Or look at
it another way.
HBR
publishes an annual ranking of the best performing CEOs in the world. The model
uses a combination of sustained performance (total shareholder return and
market capitalization) and sustainability measures (environmental, social, and
governance performance). Long-term financial performance is weighted at 80% and
ESG performance at 20%.
Guess who
were the top three in 2016?
1.
LARS REBIEN SORENSEN, NOVO NORDISK.
2.
MARTIN SORRELL, WPP.
3.
PABLO ISSA, INDITEX.
If you are wondering why
these star performers are not in the news, you are not alone.
Perhaps it is time for the
leaders of unicorns to take a closer look at what they are trying to achieve,
beyond short-term gains.
Not being in the news means doing the right thing. CEO get attention in the news if it is about them and not the company.
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