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The Future of Leadership Breakfast July 5th - Summary

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1.0 Executive Summary

Fast-changing market dynamics, globalisation, technology, customer centricity and the war for talent are all contributing to a new leadership paradigm. Full Potential Group's (FPG) latest research involving over 100 UK business leaders and HRDs reveals that leadership capabilities fundamental to future success will include:

  • 'Thinking Brain' capabilities of global mindset, being tech savvy and commercially agile
  • 'Heart Brain' qualities of empathy, authenticity, courage and humility
  • 'Infinite Brain' attributes of collaboration, purposefulness and innovation.

The contemporary debate on leadership is fast moving, but one thing remains clear - adaptation to a rapidly changing world is at the heart of being a successful leader. To inspire and catalyse that adaptation, leadership consultancy Full Potential Group invited three business leaders to discuss the topic with an audience of peers.

A global leadership perspective was provided by Lorenzo Moretti, Senior Vice President of International Operations and Business Development at Gap Inc., and despite his wide horizons, his philosophy of leadership comes back to two simple, core qualities - authenticity and integrity. Moving forward, these two leadership attributes will mark out winners from losers in the global marketplace.

Leadership reinvention was the focus for Gill Hill, Head of Talent and Leadership Development at Nationwide Building Society, who detailed how Nationwide had reinvented itself and its leadership style following the global financial crisis. The process involved a complex balancing act – the organisation having to both hold on to its core identity as a values-led mutual while developing a more commercially focused, pacey collaborative culture.

Gordon Lyle, People Director at Asda, outlined the critical role the leadership capability of ‘purposefulness’ holds, articulating the absolute requirement for a compelling purpose and values. If leaders get this right, their team, business unit and/or company stand out, win market share and beat the competition.

Finally, a roundtable discussion saw general agreement that it is leadership’s contribution to evolving the organisation’s culture – expressed as brand, values and purpose – that catalyses staff to deliver and customers to care.
 

2.0 FPG Leadership Research – key leadership capabilities to drive profitable growth and competitive advantage

FPG founder and CEO Carole Gaskell shared early findings from the group’s leadership research with CEOs and HR directors. The research revealed how business thinking is evolving to emphasise new paradigms and priorities upon which success depends. The two top themes were:
Collaboration – organisations are looking for fresh ways to secure productive collaboration
Innovation – encouraging creative thinking and radically stepping up innovation in the broadest sense.
 

Other key themes included:

  • Producing profit at pace
  • Reducing costs
  • A different way of managing change – agility and fleetness of foot
  • The need to be tech savvy
  • Courage in taking decisions
  • Intelligent risk management.


3.0 Global Leadership – Lorenzo Moretti, Senior VP of International Operations and Business Development at Gap Inc.

While at Tesco, legendary CEO Terry Leahy told Lorenzo “You’re not better than anybody, and nobody’s better than you”. These words inspired him to embrace the personal challenge and really focus on developing his leadership skills to become a true leader. Joining Gap Inc. to launch its Chinese start-ups brought challenging new global leadership opportunities – at this time Gap Inc. was not a global business, not being international in its approach and having multiple brands in multiple geographies. Gap Inc. CEO Glenn Murphy was clear he wanted to create a culture in China that the business could be proud of and recruited a mix of Chinese and non-Chinese leaders with international understanding and capability.
Gap Inc. has become increasingly cross-cultural and its main board now consists of US, Canadian, British, Italian, Mexican, Chinese and South African nationals, prizing the following attributes in its international leaders:

  • Great technical skills
  • The ability to be a talent magnet
  • The ability to deliver results by looking after your people and customers
  • The ability to deliver results working in a matrix environment – in other words through collaboration
  • Global capability and understanding.

Leadership will undoubtedly continue to become more complex in the future as globalisation grows but key fundamental leadership qualities such as authenticity and integrity will still remain critical. The millennial generation born in the late 70s/early 80s often question their leaders as well as the established infrastructure, values or institutions, having a deep desire to return to a more authentic and less upwardly mobile set of values allowing greater individuality but in a more collective way. Businesses need to court the millennial generation, both as customers and future leaders, and the authenticity of the leadership provided is going to be paramount in inspiring them to follow this journey and become the leaders of the future. In China, the “golden generation” of only children has great family support but bears a heavy weight of expectation - the family deciding where their children will work, based on businesses’ local, national and global reputation. This makes it critical for global companies recruiting in China to have authentic and genuine international leadership.

International leadership at its worst can be little more than ‘an expat roundabout of people going in for two years then out – constant changes’, and can frequently be poor leaders who just want to travel or are not performing at head office. There often still remains a huge disparity in the way locals and expats are treated. The approach should be one of developing your business culture on an international level and using the best leaders that companies have – allowing company values to work in a localised way and adopting a multi-cultural and merit-based approach. Lorenzo concluded: “Personally I believe leadership is having authenticity and integrity in the way you approach your team, customer and community – this will become even more important in the future as we move away from our core centres and become more global”.


4.0 Reinventing Leadership – Gill Hill, Head of Talent and Leadership Development at Nationwide Building Society

Prior to the 2008 global recession, Nationwide enjoyed stable interest rates and light-touch regulation with a stable, paternalistic and nurturing culture. At this point in time, 90 per cent of appointments were internal. The financial crisis brought severe economic pressures and to survive, the organisation urgently had to become more commercial while also recognising the need to retain its strong, ethical core values and customer focus as a brand differentiator in the market.

The credit crunch brought low interest rates, heavier regulation and the need for rapid organisational change which led to a more cost-focused and directive culture. The number of internal appointments dropped to 40 per cent as the company brought in external expertise to deliver the required changes. Today, low interest rates have come to be considered the norm and the focus continues to be on embedding the new technologies needed to secure efficiencies, improving customer experience, and launching innovative new products.

Developing internal talent has become a key focus at Nationwide and the introduction of a new set of leadership capabilities and five talent programmes have ensured the talent pipeline is healthier – currently 55 per cent of appointments are internal. The organisation’s leadership style is evolving into collaboration at pace while also being visionary and always ensuring that organisational objectives are very clear to employees, boosting employee engagement and confidence. Agility, innovation and decision making are also given additional focus in the new leadership framework in response to the emerging context and challenges facing the business.

Gill stated that “As much as you need the cash reserves and the liquidity to make sure you’re sustainable, the same applies to your leaders. You need to grow that internal talent”.

Reconciling Nationwide’s values as a mutual with the need to be commercial has been a real challenge for the leadership team. In summary, Gill concluded that “Our strong set of customer-oriented values have helped us through. Embedding values is the hardest thing to do, but as a mutual you can’t afford not to focus on customers, and we really believe in those values”.


5.0 Leadership and Generating a Deeper Sense of Purposefulness – Gordon Lyle, People Director at Asda

One of the most important leadership tasks of the future is to help organisations beat their rivals by defining and building a deep engagement with a compelling purpose. Gordon shared: “Every week at Asda we’re hearing about the amount people have to spend on their shopping. It’s interesting to think about what will influence their choice on how they spend it. What is it that allows organisations to win and grow in what’s a very competitive market with more choice and less disposable income? What is the role of the core purpose in providing a point of difference? And what is the role of leaders in creating that differentiation?”.


Gordon described three highly visible leaders he has worked with: 

  • Stakis Hotels CEO Sir Reo Stakis: Sir Reo was “very accessible and absolutely personified leadership”
  • Starbucks CEO Howard Schulz: “You had either met Howard Schulz or someone you knew had met him”
  • Walmart founder Sam Walton: when Gordon visited Walmart, Walton’s legacy was prominent. “He gets talked about a lot, his picture is up on the wall, and everyone’s got a story about him”.


Such leaders can bring a clarity that is commercially beneficial, for example it is deeply embedded in the Asda psyche that the supermarket’s purpose is to save people money. But it does not stop there: “You’d think the idea was that people can then spend more at Asda, but as [Asda CEO] Andy Clarke said, it’s so they can go to the swimming pool or take the kids out”.


In the case of Starbucks, the purpose is very simply ‘to bring great coffee to the world’ and CEO Howard Schultz’s message to his people is very clear: “you’re about coffee, do what you do well, do it all the time”. Strong purpose and values can directly impact on the bottom line and “If, at Starbucks, we provide great coffee to the world, we’ll open more stores. If we look after our suppliers, they’ll make more and better coffee, and we’ll open more stores.” However, there can be a flipside to having a strong purpose and values, said Gordon. “Leaders have to manage the consequences of having a very strong culture. It’s very common – you have a very good, service-oriented, compassionate culture. Part of that is people fit, they stay a long time, are promoted because we love them to death, but they don’t add value.” To keep cultures flexible, he suggested, leaders need to have a ‘lightness of touch – to hold on to beliefs and purpose but still keep an open mind’. He added: “Be clear about what your core purpose is but also be nimble and fleet of foot.”


6.0 How to Develop these New Leadership Capabilities with FPG’s Full Brain Model

FPG’s Full Brain model is a tool to fast track development of those new leadership capabilities. Leaders who flex their Full Brain are best positioned to deliver in the challenging business climate of today and tomorrow, because they use all three of the following dimensions:

  • The Thinking Brain – a person’s intellectual capability. Someone with a strong thinking brain will bring curiosity, clarity, commerciality, and objectivity to what they do
  • The Heart Brain – the ability to empathise and connect emotionally. Someone with a strong heart brain will have empathy and caring, authenticity and passion, generosity and courage
  • The Infinite Brain – the ability to provide higher meaning and a sense of purpose. Someone with a strong infinite brain will be intuitive, collaborative, purposeful and innovative.


FPG’s work with leaders using the Full Brain model has yielded a range of insights into their specific development needs:

  • Many have a great thinking brain, but need to develop greater clarity of purpose and commercial focus
  • Many need to develop their heart brain – this is about empathy, engagement and authenticity, but also being sufficiently courageous to take tough decisions
  • Leaders’ needs are greatest in terms of the infinite brain – the challenge to generate purposefulness and to broaden the scope of contribution beyond shareholders to include customer and societal value.


In summary, Carole said: “The infinite brain is about leaders changing the way they create goals, objectives and KPIs, so these have a broader more strategic impact and paradoxically connect more deeply to the essence of the individual taking those risks. This allows people to be more effective, spontaneous and innovative and deliver exponential results. The infinite brain and collaboration are about leaders having the ability to create goals that are broader than themselves. So what is that greater purpose? It is very much like the Asda position that they’re not just saving money for customers – it’s so customers have more money for other things”.


To learn more about the FPG Full Brain model please contact us on 01628 488990 or info@fullpotentialgroup.com


7.0 Appendix

A round table discussion took place after the speakers’ session and some of the comments raised included:

Agility, Creativity and Innovation

“We would not put collaboration top. It is a big issue but top of the list for us is agility and creativity. We have to recognise that what we’ve done in the past will not help us deliver in the future. We need to be really energising, creative and innovative”.


“When you talk about creativity and agility, actually collaboration is fundamental to doing that. If you try to do it within silos you’re massively limiting yourself”.


Vision and Purposefulness

“To create vision and purpose you need to use the DNA of the organisation, for example if it’s a bank use self-interest. If you go counter to the DNA it’s like turning a tanker from the prow – it sinks. You’ve got to use how you are, be subtle, and turn the tanker from the side”.


“It’s easier to create a vision for some companies than for others. For pharmaceuticals it’s ‘we save lives’. That’s where banks have a problem – why would you feel passionate about banking?”.


“We’re trying to get people to recognise our vision is long-term, not just the latest fad. The challenge is to create purpose quickly but with the belief it will be there for the long term”.


Authenticity

“The best leaders manage to capture the imagination and connect with hundreds or thousands of people – not because they have a big ego but because they are authentic. They also ceaselessly repeat the same message. It’s boring for the repeater but you have to do it”.

"My culture is bullying and it’s been successful… how do you show this stuff to bullies that are successful?”
“Maybe it’s horses for courses… just because a company is altruistic doesn’t mean it is right for everybody. There are some great companies out there that allow people who don’t fit in anywhere else to work for them – they are being authentic for that industry. If that’s the kind of people it attracts and it works, then as long as people know what they are letting themselves in for, it’s sustainable”.

“We’re entering an era of ‘marmite’ companies – you either love them or you hate them. This is an era of getting true to your essence as a company, but you don’t have to be liked by everybody – globally there’s enough who will like you”.

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