The fundamentals may remain the same, but the practice of leadership is undergoing a transformation. Stuart Crainer investigates the rise of leadership for the twenty-first century.
Our understanding of what constitutes leadership and the practice of leadership is being transformed. There has been talk of the changing nature of leadership for the last two decades, perhaps longer. But, now, talk is matched by reality.
This was brought home to me talking with the CEO of the world’s leading home appliance company, Haier. In just over three decades the company has risen from being a tiny, inefficient state-owned enterprise based in an unpromising part of China to become a global champion. It now has global sales of $30 billion and in 2016 acquired GE’s appliances business for $5.6 billion.
Throughout this exhilarating period of growth Haier was led by Zhang Ruimin. He is still the company CEO, a book-loving, quietly spoken man with a strong aversion to complacency. “There are no successful companies,” he observes with the hint of warning, “only companies that remain relevant.” Zhang Ruimin describes the job of the CEO as “to be a servant so everyone can become a maker”. He encourages each of the company’s employees to think of themselves as their own CEO.
Haier is no outlier. Increasingly those at the heart of leadership in organisations describe a sea change. This is not a denial of the past, but a reinvention of leadership for the twenty-first century. “Are the basics of leadership timeless? Yes, absolutely. Is the lens through which we see them timeless? No, it’s not,” explains Pat Chapman-Pincher, a former CEO and now a mentor with Merryck & Co. “ I think we are moving now from the age of the heroic CEO which people have tried so many times. It was based on a military model, or at least people’s understanding of a military model, that you had a leader who told his troops what to do. Of course, if you speak to anyone in the military they’ll tell you no plan ever survives first contact with the enemy. The reality is you are reliant on your troops being really smart and well trained.
“We’re moving from that model to a model in which really good CEOs appreciate that they never do it alone but do it through a team of people. Leadership was never easy and it’s probably more complex than it ever was. But if you’ve got a really good team of people around you and have the understanding of what creates a good team, the ability to recruit that team, to trust that team and to build that trust then you can be a successful CEO. So I think there has been a shift in the lens with which we’re seeing the great leader.”
Samantha Rockey has been at the frontline of the changing leadership landscape. As head of leadership development at the global brewing company, SABMiller, she was involved in a dramatic story of corporate transformation as the company was completely transformed from a national player into a global giant with 80,000 employees in more than 80 countries before being taken over by AB InBev in a $107 billion deal.
In becoming the world’s second largest brewer, SABMiller got the headlines for its dramatic growth. By the time of its acquisition, more than 140,000 bottles of SABMiller beer were enjoyed around the world every minute of every day. Its return to shareholder value from the late 1990s to when it was bought by AB InBev was around 1,400 per cent. It was the best-performing company on the FTSE top 100, bar one.
The story behind the headlines was a very human one, and one built around a highly contemporary take on leadership. Says Samantha Rockey: “We were a very people oriented business. Right from the beginning, our focus was on using people’s talents, using their strengths. And we saw that when we expanded. We put our best people into markets that we really didn’t have a lot of knowledge about. We were always a very community-oriented organisation. If you read some of the comments on Glassdoor (glassdoor.co.uk), for example, that comes through very strongly. If you speak to SABMiller employees, that really stands out as one of the key characteristics of the company.
“The lesson in terms of transformation is that often people think of organisational transformation at a very meta level, as a big, sweeping change. But it starts with individuals. It’s about building up the movement of change one person at a time.”
Of course, most organisations start off with these intentions, but as they grow and develop, they find it incredibly difficult to retain that sense of community. SABMiller pulled off the difficult task of entrenching its unique way of managing people into the organisation through processes and ways of operating focused on people. For example, it had one-on-ones where each line manager met their direct employee at least every four to six weeks. Processes were backed by a recruitment policy which hired people who connected with other people; simple, but difficult to apply consistently in a global operation.
Over the last century the role of a CEO in leading a process-led organisation has been honed. This is less the case in leading a people- based company. So, what is the job of the CEO in a people oriented company? “Connecting,”saysSamanthaRockey,“beingabletoshare and really work with people in a collaborative way. I think the idea of the heroic leader sending a missive from above doesn’t work well in a very people oriented organisation. A company like SABMiller expected people to figure things out themselves. Working with the full potential that people have is important, and the CEO provides the context in which that can happen. They allow people to really step into their best space. And they do it by having a lighter touch.”
A light touch is not something which would easily be associated with more traditional leaders. Heavy hands have dominated. “Our education systems and our performance processes within organisations have favoured a very particular kind of individual who is highly financially capable, very analytical, runs the business according to an assumption that business is fundamentally rational and logical. I think a leader is someone who understands that business is anything but logical and rational. And the people and the ability to engage, inspire and energise people is fundamentally important and now more than ever,” observes Andrew Dyckhoff, a partner at Merryck & Co.
Engaging, inspiring and energising demands that leaders tune into the organisational context. They have to understand what is going on and how people are behaving and feeling. This is demanding as CEOs and leaders of all sorts often feel constrained by their own power or responsibility. The surrounding organisation and the people in the organisation can act as containing and stifling forces. The role and its expectations cast a long shadow. It can become difficult for the leader to step outside of that zone, to emerge into the organisational light.
Another important element here is that what gets people to the top is usually not what they need to succeed at the top. It is a phenomena Pat Chapman-Pincher is familiar with: “One of the issues that I come across in my mentoring practice is that people spend a lot of time moving up the organisation aspiring to the next role, doing the next role, performing very well, flawless execution. And then they get to the CEO role and it’s so different and they don’t really appreciate what the difference is between that role and the roles they’ve had in the past. And often they’re very poorly equipped to deal with it because they are by nature people who execute, people who do and not people who think.”
Many leaders rise through the ranks because they have clarity on what they want to achieve. And then, when they become a leader, the demand is for humility, to be able to ask other people questions. For CEOs certainties tend to dissolve into questions and ambiguity. “There’s nothing certain in the world, so the idea that you can just push into certainty seems to me quite astonishing at this stage, given everything that’s going on,” observes Samantha Rockey.
Little wonder that in a sprawling global organisation context can be elusive. “We encouraged our managing directors to really run their businesses and to create the value in their markets. And they did that through understanding their stakeholders, their external stakeholders, working within their context, and then really connecting to the people in their organisation,” says Rockey. “For leadership development, being able to do both of those things in balance is a challenge. Working, with a global mindset in a global organisation relies on people really understanding what the context looks like and how it impacts on the business. It’s stepping outside of your day-to-day operations and asking yourself the much bigger questions; really having an eye on the future, but also always looking back on the past because I believe very strongly that we can learn from history, we can learn from what has happened before.”
Leadership development at SABMiller and elsewhere increasingly focuses on broadening the perspectives of leaders. At SABMiller the anthropologist Robin Dunbar, creator of the Dunbar Number which suggests individuals can only have stable relationships with 150 people, was brought in to encourage leaders to think differently. Philosophy and literature, including Shakespeare’s Henry V, have also been used. “This experience lived several hundred years ago is not dissimilar to how leaders have to deal with what’s going on in their world today. How do you form alliances? How do you know and set your vision? How do you create a movement? How do you bring people with you? These are the challenges that face leaders. It’s never about the technical operational issues; it’s always about the bigger, broader contextual issues, to be a truly good leader,” says Rockey who has gone on to establish the consulting firm Thompson Harrison.
She believes that leadership demands what she describes as “a moral imagination”. This is about considering where you are prepared to go and where you are not prepared to go as a leader. For leaders bogged down in executing on their strategies these are hard questions to ask and to find time to answer.
“There are a lot of leaders in the world, enough leaders in the world, but there are not necessarily enough leaders who reflect on what they truly want to be able to deliver and add value,” concludes Samantha Rockey. “No one can know everything. There’s such an exposure to knowledge, that you can’t pretend to have all the answers; you can only be somebody who can ask remarkably good, insightful questions. And to be able to do that, you have to really understand your own personal drivers and motivators.” Leadership has never been more personal nor vital.
Stuart Crainer is co-founder of the Thinkers50 and author of The Management Century.