Building Tomorrow's Leadership CultureTo downoad this paper as a PDF please click here.
1.0 Executive Summary At a recent breakfast seminar for senior business leaders and HR professionals, Full Potential Group™ Managing Partners, Carole Gaskell and John Blakey, chaired a discussion on the current leadership debate taking place in this highly unpredictable economic world and, more precisely, where leadership has come and where it needs to go to succeed in the next three years. Business leaders are having to make decisions and implement strategies in a financial world full of contradictions and ambiguity, demanding fundamentally new leadership capabilities and skills to engage people and drive business growth moving forward. Opening speaker Tony McCarthy has held some of the UK’s most senior HR positions as a member of the leadership team at BAA, Royal Mail and British Airways, and is now Global HR Director at Eurasian Natural Resources Corporate (ENRC). He shared with the audience his views on the changing face of business leadership and underlined the need for a new adaptable leadership style to succeed in the current fast-moving, contradictory economic climate. Today’s leaders need to demonstrate clarity and authenticity, build courage and trust and inspire top talent, whilst driving business innovation and growth. Carole introduced the ‘multi-brain concept’ as a model which enabled leaders to explore their leadership capabilities on three levels: the thinking brain, the heart brain and the infinite brain. This offered a clear platform upon which to review individual leadership strengths and possible development areas, together with pragmatic leadership tools and techniques to enable leaders to align the ‘three’ brains and realise the full benefits of multi-brain leadership. To downoad this paper as a PDF please click here.
2.0 Opening Guest Speaker – Tony McCarthy, Global HR Director at Eurasian Natural Resources Corporation In his speech, Tony underlined the need for modern day leaders to take a ‘multi-point view’ in the management of today’s ambiguous and contradictory business world. Organisations need their customer- facing teams to feel confident and strong, with business leaders keeping management ‘simple’ and allowing employees to focus on the customer. Despite the ‘confused’ economic backdrop bringing with it a host of problems – high youth unemployment, unstable commodity prices, a slowdown in China’s economic growth rate and confusion over the future of the Euro – we must remember that good leadership comes down to two basic fundamentals: good governance and keeping your people motivated.
"In the last three years, we have seen extraordinary events. Who knows what’s going to happen tomorrow, let alone next month?” Sir Mervyn King, Governor of the Bank of England (November 2011)
In 1990, British Aerospace employed 147,000 people and was a conglomerate off four divisions: cars, military, civil aircraft and construction. In the face of recession, the workforce was reduced to only 44,000 by 1994 and the business transformed into a global aerospace and defence specialist. Dick Evans, CEO at the time, had a very clear vision for the company and possessed the drive and energy needed to challenge the organisation and ‘sell’ his strategy to employees. As an honest and authentic leader, Dick was clear on his own strengths and limitations and recognised the need to surround himself with a strong team. Being a marketeer, he understood the importance of the people agenda in achieving his organisational goals and very effectively used storytelling to motivate and engage his teams in realising his vision. In 2002 Tony joined Royal Mail Group to work for Chairman Allan Leighton, former CEO at Asda. The company was preparing for privatisation but despite holding a 98% monopoly of the UK market was losing a million pounds a day. Adam Crozier joined as CEO in 2003 with the huge task of modernising this highly unionised, inefficient business. Adam again had real vision and was also an adept storyteller which he used to great effect in driving cultural change through the organisation. As a leader, Adam was also a good listener and very clear on his own limitations and the need to build a talented team around him. After five years, Tony moved to British Airways as Director of People and Organisational Effectiveness, working for CEO Willie Walsh and assuming responsibility for 43,000 staff. In 2008, the business was achieving record profits and yet remained a highly unionised organisation with a very deep, traditional management culture, based on a centralised, controlling and finance driven model. The recession that followed and the increasingly competitive, rapidly-changing nature of the airline business demanded huge organisational and cultural change and highly visionary leadership to protect market share and grow profitability. At ENRC, Tony is facing a whole new set of challenges. Principal to these is dealing with the ambiguity and contradictions of the organisation. For example, ENRC is growing rapidly yet striving to cut costs at the same time. On the one hand, it is a bureaucratic organisation with a Soviet style culture and yet decisions on multi-million pound investments are made quickly and instinctively at Board level with an entrepreneurial flair. On the one hand, the company is listed on the FTSE 100 London Stock Exchange and subject to all the governance expectations that come with this status and yet the company has three private shareholders who own a significant portion of the company and are based in Kazakhstan. Finally, the company is very profitable and yet there are massive productivity variations between mines in different parts of the world that show that major efficiency gains are still possible. Hence, Tony regards dealing with ambiguity as a core challenge for all leaders in ENRC and expects that this will be a challenge that more and more leaders will face in the coming years. To summarise, Tony affirmed business leaders still need to concentrate on the four essentials of good leadership: vision, employee engagement, customer focus and storytelling, but in the current volatile economic climate these alone will not suffice in the drive for business growth and profitability. Leaders must ensure that the top of the organisation i.e. senior management are fully aligned with employees at all levels, often necessitating a move to a more open corporate culture, based on authenticity and trust and where leaders listen and mistakes can be openly discussed.
Speaker Profile – Tony McCarthy Tony McCarthy has held some of the UK’s most senior HR positions since joining British Aerospace as a graduate trainee in the 1970s and has worked with some of the UK’s most recognised business leaders. These include Dick Evans, former Chairman of British Aerospace plc (now known as BAE Systems), Allan Leighton, former Chairman at Royal Mail, Adam Crozier, former CEO at Royal Mail and now CEO at ITV and lastly Willie Walsh, former CEO at British Airways and now chief executive of International Airlines Group (IAG), the parent company of BA and Iberia. Tony is currently Global HR Director at ENRC PLC, a FTSE 100 company specialising in diversified natural resources such as iron ore, aluminium and copper, with integrated mining, processing, energy, logistical and marketing operations. ENRC operates in Kazakhstan, China, Russia, Brazil and Africa, employs 72,000 people and has an annual turnover of £7.5 billion. Further underlining his leadership experience, Tony has previously been chair of the Centre for Performance-led HR at Lancaster University Management School and was a Vice President of the Chartered Institute of Personnel and Development.
3.0 Core Leadership Capabilities for the Future To prosper in the current volatile business climate, business leaders need to honestly re-assess themselves and John challenged the audience with the claim that ‘the average corporate leader will need to be ”re-engineered” in the next 5-10 years in order to succeed’. Full Potential Group research has underlined the four core capabilities that future leaders will need: i. Tech savvy leadership ii. Authentic leadership iii. Global leadership iv. Emotionally intelligent leadership i. ‘Tech savvy’ leadership
“We need not all become gifted technicians or computer scientists but we need to: - Understand how the intelligent use of technology can help us - Recruit, develop and maintain a network of technically competent people - Know how to make and manage investments in new technology - Be positive role models in leading the use of new technology Organisations with tech savvy leaders will have a competitive advantage.” Dr. Marshall Goldsmith, ‘Who are our Future Leaders…’1
No-one will question the increasing use of technology and the need for organisations to embrace new and emerging technologies to stay ahead in this competitive marketplace. Some organisations have been slower at adopting this though which has cost them dearly – Yell being an obvious example, whose share price plummeted from 60p to 5p after a fatal decision to stay wedded to print technology. People are now demanding and delivering change through the use of new technology (e.g. the role of Facebook in the Arab Spring) and the ongoing impact on political and business cultures of technology has yet to be seen. Tech savvy leadership – and a tech savvy organisation – will need to utilise emerging technologies and understand what role it can play in driving future business growth to stay ahead.
ii. ‘Authentic’ leadership John questioned whether authenticity had gone backwards rather than forwards in the last 20 years. He cited his experience as a young manager 20 years earlier when leaders would say exactly what they thought and were direct, clear and authentic – although their colourful language would not be acceptable in today’s workplace. The corporate world of the 21st century is very different, with leaders seemingly adept at spinning messages. Does this undermine the drive to authenticity? A CCL Survey conducted in 2007 highlighted that the biggest blocker to being authentic was the need to maintain an executive image.2 The survey involved 247 leaders, mainly US-based at board level. “The pressure to show self-confidence even during times of insecurity is a major impediment of remaining authentic. Therein lies the key struggle of authenticity: Do you fill the roles your co-workers and shareholders expect of you or do you present your true self without fear of negative outcomes?” CCL Survey, ‘10 Trends: A Study of Senior Executives Views’ on the Future’2
If there is a need to be authentic to be a successful future leader – and yet there is a key concern with ‘saving face’ – is the business world ready for the type of authenticity from a leader that says ‘I am scared and I don’t know what to do?’. In a pre-event research survey, delegates highlighted words like ‘trust’, ‘ethics’, ‘honesty’, ‘integrity’ and ‘trustworthy’ as features leaders would need to effectively engage and lead people, underlining a clear appetite for authentic leadership styles. The question remains whether leaders can be truly authentic and maintain their executive image. Bass & Steidlmeier (1999) noted that “transformational leadership is only authentic when it is grounded in the leader’s moral character, concern for others, and congruence of ethical values with actions. A leader’s trustworthiness is critical and increasing numbers make the case that character – as defined by qualities such as striving for fairness, respecting others, humility, and concern for the greater good represent the most critical qualities of leadership.”3
iii. ‘Global’ leadership In this increasingly international marketplace, the global demand on leaders to be accessible by their worldwide teams (both real and virtual) is growing. There is an accelerating travel trend. This aspect of business life is bringing even greater intensity and pressure on leaders and is showing no sign of decline. While there will continue to be an increasing need for leaders to operate within a global mindset and working space, the sheer pressure that this will bring to leaders – both physically and mentally – led one delegate to share that recovery gaps were essential to “keep sane”.
iv. ‘Emotionally intelligent’ leadership A number of delegates in their pre-event questionnaires directly talked about future leaders needing a high level of EQ to be a successful future leader. Other delegates talked about the need for more collaboration and collaborative leadership. Definitions, as always, are crucial for understanding: John talked about collaboration in positive terms – power sharing, interdependency, moving away from autocratic leadership. Other delegates talked about the ‘dark side’ of collaboration – a case in point being Lehman Brothers whose highly collaborative approach possibly contributed to its collapse, as leaders felt they could not dissent and conflict was not allowed. It is worth noting that Lehman’s Brothers’ previous culture had been highly divisive and competitive and the drive towards collaboration had been instigated to overcome the negative impacts of the previous regime. It is clear that in today’s business environment, the power distance between boss and employee has shrunk and is continuing to shrink. In 10 years time, spirituality, meaning and purpose may have moved more into the business vocabulary as the need for emotionally intelligent leaders increases. The “deal breaker” The need for tech savvy, authentic, global and emotionally intelligent leadership are all trends that are happening in parallel. Exponential change is becoming the norm. However, if our current understanding of leadership is that it is about leaders being ‘in control’, a leader could easily be headed towards chronic stress and burnout as they grapple with an increasingly changing, ambiguous business environment, that shows no sign of decreasing in complexity. John shared the story of Antonio Horta-Osario, CEO of Lloyds Banking Group, who has currently been signed off with fatigue after working consistently non-stop, day and night, seven days a week, trying to stabilise and re-grow the beleaguered business. The deal breaker, therefore, is leaders having the courage to let go and be able to work in an environment when they are blatantly not in control. The impact of this has yet to be seen…
4.0 Building Leadership Capability for the Future To do this successfully, there are two key areas that organisations will need to focus on:
A core component of the latter is ‘catalytic leadership’, which Carole defined as follows: “catalytic leadership is acting as a stimulus to cause or accelerate a change – used in small amounts to generate exponential results.” She provoked delegates to think about their role as catalysts, coaches and facilitators in their organisations, able to have an exponential impact on their leaders to help them make the most out of complexity and ambiguity. Leaders need to be able to draw on their strengths and be catalytic and collaborative to draw on everyone else’s strengths – to do this successfully, they need do this across three areas:
5.0 The Multi-Brain for Catalytic Leadership For leaders to be catalytic across all three areas (self, others and environment), they will require clear, simple and pragmatic tools and techniques that they can easily incorporate into their leadership approach. Carole shared the integrated brain model involving the use of a ‘multi-brain’ perspective as a model for catalytic leadership, suggesting that any successful leader will need to be able to integrate all three ‘brains’ (thinking, heart and infinite) to achieve the long-term results and growth they desire. The thinking brain This is perhaps the most easily-understood ‘brain’, with leaders tending to have well-honed thinking brains. The thinking brain includes: · Strategic clarity · Focus · Drive · Being commercial · Being tech savvy · Business drive · Executing strategy · Incisive decision making. The ongoing challenge is for leaders to hone their thinking brain so that they can make change happen quickly and with clarity. Carole’s advice for igniting the thinking brain was to support leaders and managers to hone their questioning skills but also to significantly deepen their level of listening. ‘Laser questioning’, for example, sharpens the ability to ask laser-like questions that cut through ambiguity and gets to the source of an issue. ‘Catalytic questioning’ enables people to think more strategically and creates shifts in their thinking. She highlighted the importance of silence when asking these types of questions – the silence giving individuals the time and space to be really open and honest. The heart brain There is a clear trend emerging of leaders wanting to engage the hearts of their people, inspire them and be increasingly authentic. This is becoming more and more important as leaders recognise that they get more value from their people as they start to utilise their heart brain and engage the hearts of their people. CFOs who want to become CEOs are looking at how they make the leap from thinking brain to heart brain. The heart brain competencies include: · Courage · Compassion · Care · Empathy · Sensitivity · Collaboration · Passion. From their experience of working with Board members and senior leaders, Carole and John shared that leaders derive the most value from working in heart brain space and that they love it when they are challenged to go there. Using the heart brain can seem risky though – one delegate shared how she had asked a senior leader ‘how do you feel?’ which required bravery on her part but resulted in a catalytic shift, with the senior leader deepening his commitment and engagement to the organisation. Carole encouraged delegates to be brave, as the more delegates can be brave with the leaders around them, the more leaders will respond. The infinite brain The infinite brain is the hardest brain to quantify in that it requires leaders to connect to their intuition and their purpose. The infinite brain capabilities require a leader to demonstrate: · Vision · Meaning and purpose · Imagination · Creativity · Faith · Storytelling abilities · Humour. Importantly, it is about breaking beyond boundaries so that they can create something greater, and therefore is deeply linked to creativity and innovation. Carole shared that from an infinite brain space, leaders often have the courage to let go so that ambiguity becomes less of an issue. Storytelling is one way of accessing the infinite brain, as is the use of metaphors – both of these offer powerful ways of engaging others and enabling others to operate from their infinite brain. MULTI-BRAIN CAPABILITIES
6.0 Floor Discussion The discussion flowed into how the topics outlined impacted leaders’ own experience and businesses. A number of common themes emerged: Living in a 24/7 culture Today’s fast-moving, global business environment has led to the development of a relentless ‘Blackberries on the beach’ culture, which can ultimately inhibit productivity rather than maximise performance. One delegate commented that a leader letting go creates the conditions for their team to take more accountability whereas if they do not, the team never has the space to demonstrate their full capability or for the leader to develop a real trust in the capabilities of their team. There could almost be a competency of ‘being comfortably out of control’. The need to manage one’s own energy was a consistent theme that arose, with several delegates knowing colleagues who had experienced ‘burn out’ because they had not known when to stop. Leaders need to be increasingly self-aware of their limits and what they were not willing to sacrifice to maintain working at an optimum level. While systems thinking was helpful in managing one’s energy and resources, it was noted that one could not seek to control their system – that could also lead to ‘burn out’ – but rather the benefit lay from knowing how to influence it, particularly as systems are much bigger and more complex now compared to 50 years ago. A simple statement but a fundamental one was given – that we are human beings, not machines, and that the 24/7 work model is not humanly sustainable. Creating a common language across cultures The need to communicate effectively across cultures will always be central to business success. Concepts such as the multi-brain could be introduced to open up conversations and drive a different level of debate and challenge but the right language for the right audience will need to be found in order to fully engage people – this would be particularly pertinent for organisations where multiple nationalities are evident. Equally, delegates noted the differences between Generation X and Generation Y and therefore the importance of creating the language and environment that maximised the potential of both. Having the courage to change One delegate noted that in a culture where ‘everything is a crisis’ and ‘urgent’, the ability to stand back and simply refuse to worry about a particular issue is brave and can be hugely counter-cultural. One HR leader noted that while his organisation needed to create the space for leaders to be vulnerable, the culture of long hours and excessive, intense working was admired which went against the need for leaders to demonstrate vulnerability and be seen as ordinary human beings – not ‘super men and women’. Applying these learnings to your unique challenges and goals Delegates were invited to review these leadership perspectives in relation to their own organisational challenges and more specifically asked to consider this question: 'Given what you have heard this morning, what is the one thing that you could focus on that would make a real difference to the leadership culture in your organisation next year?' A key topic which came to the fore revolved around the assessing of an organisation’s DNA in relation to the multi-brain concept and the difficulty of introducing the most ‘different brain’ into the prevailing organisational culture. New team members recruited for their ‘different brain’ skills needed to be supported by business leaders and HR professionals nurturing these differences and ensuring that they are valued as part of the broader cultural change process. Every organisation will have what it considers a cultural norm and yet it is here that changes often need to be made for the organisation to really thrive and succeed. The ultimate question is how leaders can catalyse this cultural shift and move from a complacent or destructive environment to an open culture, accepting the value the different multi-brain aspects can bring to business operations. A second focus explored the need for leaders to be authentically “self-aware and not self-obsessed.” Many organisations lose their customer focus by allowing strong egos to build protective silos within the management structure, thus restricting empowerment and honesty across the company. Finally the view was expressed that an ambiguous world should not be feared but actually embraced as an exciting opportunity to introduce real change and innovation. One attendee recommended a book by Richard Pascal ‘Surfing the Edge of Chaos: The Laws of Nature and The New Laws of Business’ to support this observation.
7.0 Closing Statement “In summary, many of the leaders and teams we work with describe working in their organisations over the past two years as 'like being on a rollercoaster'. Given the themes and topics covered by this white paper this is not surprising. Without exception, this metaphor is used with a negative connotation, i.e. leaders feel their environment is hurtling past them at an alarming speed, they do not feel like they are in control and they are not sure when it is all going to return to 'normal'. Yet contrast this with the fact that every day there are thousands of people around the world queuing long hours and paying good money to climb aboard rollercoasters in various theme parks and, strangely, they seem to love the experience – the thrill, the adventure, the adrenaline rush, the sense of being alive in the moment. What then is the difference? Apparently, the chemicals released into the body when we feel great excitement or great fear are identical – it is simply our fantasy regarding the final conclusion of the experience that determines whether we interpret these circumstances as a joyous thrill or an alarming fear. Read that last sentence again and you will know what we mean. Therefore, if we can let go of the need to control and if we can keep a happy ending in mind then building tomorrow's leadership culture could become the most fantastic rollercoaster experience of our lives. Try it now and enjoy the ride!” John Blakey and Carole Gaskell, Managing Partners Full Potential Group
Appendix 2. ’10 Trends: A Study of Senior Executives Views’ on the Future’, CCL Research White Paper – Corey Criswell and André Martin, 2007 http://www.ccl.org/leadership/pdf/research/TenTrends.pdf 3. ‘Ethics, Character and Authentic Transformational Leadership Behavior’, Leadership Quarterly: Special Issue, Part I: Charismatic and Transformational Leadership: Taking Stock of the Present and Future – B.M. Bass and P. Steidlmeier, 1999. Suggested Further Reading ‘Surfing the Edge of Chaos: The Laws of Nature and The New Laws of Business’ – Richard Pascale, Mark Millemann, Linda Gioia, November 2000.
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