So, you’re a senior leader, maybe a CEO and today is the first day of the rest of your life! How are you going to spend it? Will you continue to tread that well known, comfortable path which will lead to the eventual downfall of your organisation? Or is this the day you set in motion something special, something that will not only secure future success for your company but also positively impact the wider world?
You may say that choice is not yours to make; that your actions are circumscribed by the rule of law and regulation, by shareholder expectations and by market forces. And, if that’s your belief then I say fair enough, but my challenge to you is whether you are a leader by title or by action? As an ex-CEO and now advisor to CEOs and senior leaders I think the following is largely true: In this world there are a thousand reasons ‘why not’ but true leaders look for the reasons ‘why’.
Organisational leadership has never been simply about profits. Widely believed to be the first joint stock company founded in the mid-1500s in the UK, the charter of the Company of Merchant Adventurers to New Lands sets down their mission to find new trade routes “for the glory of God, the honour and increase of the revenues of the Crown, and the common vitality of the whole realm of England.”
That ideal of business ventures profiting the wider society still stands today. Indeed, in the latest version of the corporate governance code which was issued in 2018, the first principle states that “A successful company is led by an effective and entrepreneurial board, whose role is to promote the long-term sustainable success of the company, generating value for shareholders and contributing to wider society.”
Sadly, somewhere along the way for many businesses that ideal of benefitting society has been subverted by a profit first perception allied to a fear of risk. And that combination has led to paralysis of thought and action. Take Kodak, for example; a company which had the world’s first digital camera in its grasp but shrugged it aside for fear of losing film sales. In fact take any one of a number of large organisations which has disappeared in recent times and the same picture emerges; a combination of size, complacency and laziness leading to an inevitable conclusion.
Okay, you might say, they were the dinosaurs of the business world and their time had come. You may even say that they deserved to be killed off, their customer base picked apart by hungry fast growth unicorns who had the agility and drive to offer something new. It’s easy, you might say, to be innovative when you aren’t bound by the weight of legacy systems, culture and processes.
Oh come on, really? That’s like taking the FCA’s financial advice warning that ‘past performance is not a reliable indicator of future results’ as an acceptance that future results will be worse. If we were all hidebound by what went on in the past we wouldn’t have even reached the Stone Age. And yet, the common perception is that whilst dinosaurs had their time a single cataclysmic event, an outside force such as a meteor could easily wipe them out.
If that were the case, the meteor would simultaneously mark the end of the unicorns so why hasn’t it. It is true that the world is seeing a cataclysmic change in social outlook and expectations led by the rise of Generation Z and a move into the Fourth Industrial Revolution which the World Economic Forum describes as being “characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.”
That in itself delivers quasi-meteoric change conditions. So why are the dinosaurs suffering and the unicorns surviving? I think quite simply, because the meteor which is accounting for the dinosaurs is the dinosaurs themselves; most particularly the leadership mindset which refuses to transform the organisation into one which prioritises the capabilities for driving innovation.
So what is the solution? An August 2018 article by Arvid Rathore [1] comments that
“Although the situation may look bleak, the game is not over for these large enterprises. They need to accept changing realities and transform themselves not only to survive but possibly thrive.”
In other words, to stop being hidebound by the constraints of the past and instead actually start to create the future through innovation.
Now I do have to say that in the last few months I have started to notice a sea change in the mindset of organisational leaders. They are finally starting to move away from simply talking about innovation as a transformational capability and acknowledging that positive action has to be taken.
However, there is also the realisation that exponential times also pose new challenges for leaders. There is growing acknowledgement that the traditional approach to leadership development is outdated and isn’t sufficient to create the kind of value required for shaping the future. Transforming organisations into the innovation vanguards they are capable of becoming now requires future-focused, leadership to be the norm not the exception. That means leaders need to be driven by purpose, creativity, curiosity and empathy more than ever before. Something I outlined in my latest report “Shifting innovation perspectives for 2019.”
However, far too much of the action being taken is still focused on delivering positive outcomes solely for the organisation and its immediate stakeholders. That is no longer enough. It is time, more than time, for organisations to leverage the tremendous potential which they have for the benefit of wider society; to go back, if you like, to the ideal of business ventures being undertaken for the common vitality of all.
The world is facing social, political and geological change. It’s hardly surprising that Generation Z are looking to work in and buy from organisations which prioritise social conscience and sustainability; after all, that generation are seeing at first-hand the increasing damage which previous generations have thoughtlessly imposed on the world.
Dinosaurs may be their own cataclysmic event, the meteor which is responsible for their own destruction; but either independently or collaboratively, unicorns and dinosaurs alike have the potential to deliver something new, something demonstrably different not simply for their own survival but for the survival of the planet.
So, if you’re a CEO or senior leader, will this be the day you set in motion something demonstrably different, something that will not only drive value for and shape the future of, your organisation but also positively impact the wider world?