Opening Salvos: Is leadership rising to the occasion? by Simon Caulkin

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Eduardo P. Braun Conference chair

James Li Senior VP, Huawei
Alex Adamopoulos CEO Emergn
Sunil Prashara President Project Management Institute
Gemma D’Auria Global leader, McKinsey Leadership Practice
Eric Cornuel President, EFMD
Yannick Fierling CEO, Haier Europe

The year 2020 has put us through a lot, but in doing so created settings for effective leaders to have real impact. Who has stepped up to the challenge and who has stumbled: What broad lessons in leadership can we take away from this annus horribilus?

After Gary Hamel’s ‘Woodstock of management’ the day before and the rousing welcome address of Salzburg president Helga Rabl-Stadler, the Opening Salvos session uwas just that: a sighting round. The question in the session’s title – is leadership rising to the occasion – was not directly addressed, but the assumption was clearly that it wasn’t. The six contributions were all riffs on how it could and should be done better, the practitioners’ practical agenda fitting into the wider tours d’horizon of the academic and advisory presentations.

Thus, laying out the context, McKinsey’s Gemma D’Auria described the global challenge of leadership as reshaping organisations set up along the management lines of the first industrial revolution to address the very different issues and circumstances of the second, all speeded up by Covid.

Drucker Forum 2020

Leadership’s collective midlife crisis

The result was ‘a collective midlife leadership crisis’ in which everything about the firm – purpose, organisation and distinctiveness – was up for grabs. For leaders, the challenge was moving from a reactive to a creative mindset – pursuing discovery over certainty, partnership over authority and playing to positive-sum rather than zero-sum rules. As important as cognitive and problem-solving skills in this shift were the scarcer emotional and social ones. ‘Leading with intent, which means having a north star for yourself as well as your people, leading with love, because you can’t collaborate in networks without that, leading with mastery and curiosity,’ summed up D’Auria, who suggested that the most important factor of all for corporate survival was not strength or even intelligence, but Darwinian adaptability.

Sunil Prashara of the Project Management Institute agreed that the era of covid had starkly revealed the limitations of planning for the future. Rather than trying to anticipate every change and shock, leaders should focus on building “gymnastic organisations” that were agile and adaptive without sacrificing precision and control. Gymnastic leaders focus on outcomes not process, enabling them to embrace new ways of working to solve urgent problems, like instant construction of Nightingale hospitals and breakneck development of covid vaccines, for example. Key roles for leadership were driving innovation, empowering people, taking a stand on major issues such as climate change and working holistically to solve them.

An era of constrained leadership?

Eric Cornuel at EFMD blamed some of the leadership shortfall on ideology: how could leaders apply their full talents when they were artificially constrained by a shareholder-value model that favoured short-term profits over sustainability and social impact – a short-termism echoed by the electoral cycle in politics? The pandemic had intensified a ‘deep crisis of elite legitimacy’ which in the absence of political and corporate will could end up in societal upheaval, he warned. In this intellectual vacuum, behaving as the traditional detached observer could leave academia looking increasingly irrelevent. ‘We should stop being mute,’ he argued. ‘We should be catalysts and whistleblowers, change agents helping to reconcile management, technological development and society, so that we can contribute to a new deal and a new social paradigm.. there is no better moment for us to stand up and be relevant than today.’

From the point of view of a practical consultancy, Emergn’s Alex Adamopoulos reminded the audience of a few roadblocks barring the way to leadership’s brave new world. Many of them are familiar – and it’s striking, as he says, how little they change. They are also basic, like the tendency still to think of leadership pertaining only to executive and senior management. Likewise employee disengagement, overoptimistic estimates of the speed of cultural change, and the remoteness of management from the front line – so that ‘even when we talk about customer-centric or people-centric, are we really considering the needs of clients, or emphasizing points that are important to us?’

To combat these tendencies, Adamopoulos urged leaders to free up their organisations by organising for value propositions and value streams rather than budgets and functions, and to adopt the discovery and experimentation mindset also picked up on by McKinsey’s D’Auria. Nothing could be done without cultivating a deep sense of empowerment, which he described having both the sympathy and the empathy to understand what that really entails for both teams and customers.

Wanted: innovation and collaboration

The other two practitioner voices came from senior leaders from Chinese heavyweight corporates Huawei and Haier, who each underlined the importance of leaders in driving much-needed innovation and collaboration. Innovation, pointed out Huawei’s James Li, was key not just during the emergency – for example setting up 5G networks for two field hospitals in Wuhan in two days – but also in recovery, where better and faster connectivity will enable transport networks and businesses to open up more quickly. It was guided by the core value of ‘going where customers need you most’ in tough times – ‘helping our customers work through crisis is simply part of the job’. Global cooperation, meanwhile, was a no brainer. ‘In times like this we need to stick together. We need to be more open, more inclusive, more united. We are stronger together, and the more difficult the challenge the more leaders need to work as one to solve this global crisis.’

As for Haier’s Yannick Fierling, he pointed to the resilience of the company’s radically decentralised structure in responding to the crisis. ‘You shouldn’t be thinking about Haier as a big gigantic company but rather a forest of micro-enterprises all turned towards the end consumer’, he said. Haier’s structure and business model aim to capitalise on the internet’s effect of abolishing distance to get ever closer to the market – hence its concept of ‘zero distance to the customer’. ‘Imagine the advantage’ – shared incidentally with Hamel and Zanini’s empowered and decentralised exemplars – ‘of people with the steering wheels in their hands, able to serve the end-consumer on a daily basis without control from headquarters.’ Proof of the pudding: extravagant growth rates among Haier’s international subsidiaries even in crisis, in some cases touching 50 per cent.

The key is human agency

Like the other speakers, Fierling singled human agency as the key building block on which everything else rests. ‘The business model is entrepreneurship,’ Fierling declared. ‘As Drucker said, every person in a company should become their own CEO – and that’s what we’re living in this company every day’.

At the end of the session, the audience was invited to vote on the most pressing challenge for leadership in rising to the occasion: accelerating innovation, building a strong human-centred culture, defining purpose, fostering international stakeholder collaboration or enhancing leadership training. It was perhaps cheering that 45 per cent of respondents chose the building of a culture based on human values – even if the session left little doubt about the magnitude and difficulty of the transformation involved in doing so.

About the Author:
Simon Caulkin is senior editor for the Drucker Forum.

This article is one in the “shape the debate” series relating to the fully digital 12th Global Peter Drucker Forum, under the theme “Leadership Everywhere” on October 28, 29 & 30, 2020.

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