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Leadership2050 Edition 5, Leading to the Next Mountain

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Welcome to the 5th Leadership2050 LinkedIn Newsletter. In this edition, I will focus on the journey of transformation that all industries and most companies are going through as they move forward towards 2050. 

However, to begin with, we need to go back to a conversation that I had at the World Economic Forum in Davos, Switzerland in 2015. As I interviewed several CEOs regarding the challenges and opportunities that they were facing, one conversation made a deep impression and informed how I think about these issues.

During this conversation, the CEO came out with words along the following lines: ‘Over the last 30 years, I have been climbing a mountain. This mountain represents my own leadership, the growth of the company and the development of the industry. The problem as I see it today is that I'm standing on top of the mountain. In many ways, I should be incredibly pleased about what I and others have developed and the way in which the company and industry has made an impact on the world. However, when I look around me, I'm surrounded by fog and clouds and when I gaze beneath me, the mountain is starting to crumble. If I'm honest, I don't know how to plan for more than the next few months and cannot see into the years ahead’

I was shocked by what I heard. This CEO was not facing a personal leadership crisis, the company was not in crisis, and neither was the industry as a whole. However, they were putting their finger on something that was to become, in time, a realisation that many other leaders would recognise for themselves. I have used this metaphor with over 5000 leaders in different situations, from teaching sessions with executives, to executive and board retreats and conferences. To a person, no one has disagreed with this framing of the context. Moreover, for many people it has brought a much greater sense of focus regarding the situation that they are facing on the journey of transformation, and greater clarity about what they need to do to move forward. Many have started to ask, ‘Where are we now on this journey of transformation, what does the next mountain look like and what is the journey to get there?’.

Figure 1 below shows this metaphorical picture of the transformation journey. It encapsulates the first journey that leaders, companies and industries go through. Many people with whom I've spoken describe this as building something based on ego, i.e. ‘my/our power’, ‘my/our status’ and ‘my/our achievements’, as well as the need to defend and protect this at all costs. This often creates a situation in which it is difficult to see what is going on in the wider world until it hits you in the face. The COVID situation is a very clear case in point. However, there is a broader range of factors too. For example, as leaders wake up to the challenge of climate change, more assertive regulation and business models that are no longer producing the same levels of profit and growth.

 

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The metaphor goes on to show a valley, which can either be a place of transformation, or an abyss. This abyss is the failure to exist, or to exist but in a much lesser form. History is littered with examples of companies that have not made a successful transition through this space. The model also shows the factors that can catalyse a successful transition through this valley and what the destination might look like. For many leaders, this destination is about different industry structures, new technologies and business models, and a different type of leadership and organisational culture. This could also be described as a more soulful type of business, which has purpose and service at its core – rather than a focus on ego, as with the first mountain. Whilst this journey is contextualised by contemporary factors, in many ways it is not new. Writers such as Joseph Campbell, who wrote The Hero With A Thousand Faces, and Sogyal Rinpoche, who wrote The Tibetan Book of Living and Dying, discuss this phenomenon from a psychological and spiritual perspective respectively. Both authors talk profoundly about the need to let go of attachments to things that have made us successful before something new can emerge. This is a topic I will come back to in more detail in future newsletters

More recently, I have noticed a shift in where people think they are on this journey of transformation. Some of this is down to the intensity of the last year, due to COVID, but there are also other factors at work. There appears to be a far greater sense that we are in this valley between two mountains. 

This view has come from discussions I have had with a group of leaders who are currently participating in the Advanced Management and Leadership Programme at Said Business School at the University of Oxford (of which I am the Programme Director): https://www.sbs.ox.ac.uk/programmes/executive-education/campus-open-programmes/oxford-advanced-management-leadership-programme. The programme, attended by 27 leaders from South and North America, Europe, Africa and Asia, is focusing on what it means to be a 21st century leader and how to help the participants transition to being this type of leader. Specifically, we begin by looking at the internal and external situational context faced by each leader, the 21st century challenges creating risks and opportunities for them, the scenarios that they face, their individual and organisational purpose, the business performance challenges they need to address, the type of leader they need to be and, finally, what their Leadership Playbook looks like. 

Following a session where I introduced the mountain-to-mountain model, I asked them a simple question: where are you on the mountain? The results are presented below in Figure 2. What this shows is that more than half of these leaders believe that they are in the valley between the two mountains, where the valley is an abyss or place of transformation. Firstly, this is an interesting ‘temperature check’ of what is going on at the moment with respect to how a group of global leaders see themselves, the organisations they work for and the context in which they are operating. 

 

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These results also speak to where things are today regarding the much-needed transformation of certain industries. It is easy to become despondent, believing that situations are not changing as they need to while we face up to issues such as the climate challenge. However, my experience, not only with this cohort but also with many leaders, is that there are many people engaged with the question of how to transform their operations, business models and product services. There is a growing awareness that, unless they do, there is a very real risk that they will fail to exist in anywhere near their current form of success. 

So, if as a leader you feel that you are in the valley, what can you do? Below are four questions that I have found very helpful in shaping what the future journey might look like: 

1.     What do you need to take with you? It is very rare that there is nothing good to be salvaged from the ‘old’ mountain (business model, culture, capabilities or people). For example, even if your technologies are no longer relevant, the engineering skills that were used to create these technologies can still be incredibly useful if applied to a different context with a different type of technology. Likewise, a culture that has delivered high levels of performance in the past may need to be reviewed but, with some changes, could be reapplied in a different way to a different set of challenges and opportunities. 

2.     What do you need to leave behind? This is perhaps one of the hardest questions to answer, given that much of leadership is focused on being creative, growth and transformation. I have given a TED talk that illustrates this point by talking about the opposite of this, namely, the power of doubt, decline and death, which are as important as belief, growth and life from a leadership point of view: https://www.youtube.com/watch?v=p9fwC3tInlo&list=PLKDwnAQ0Qy6Aaxx2MG1PU3snPjNJzy62s&index=4. Being able to decide when something needs to end, and doing this mindfully, rather than having it forced upon you as a leader, is something that is severely lacking in today's world. It is not difficult to see that there are certain technologies, products and services without which the world would be better and which are already in terminal decline. By recognising this, it creates space for the ‘new’ to develop. I wrote about this in a Harvard Business Review paper, where I described the case of CVS, the US healthcare retailer, who voluntarily took cigarettes out of their stores because stocking them did not align with their purpose: https://hbr.org/2016/06/lessons-from-companies-that-put-purpose-ahead-of-short-term-profits. Within a retail environment, the resulting empty shelves created space for new products that could sell at higher margins – hence, where profit and purpose are synonymous. 

3.     What do you need to transform? This question addresses the challenge of where you need to transform a part of your operation such that it works in a different way. There are two examples where we have seen this recently: firstly, where Amazon has moved into operating fully-automated physical stores and, secondly, where Business Schools, such as the one that I work for, are now delivering executive education programmes via digital platforms. What we see here is that the core business model hasn't changed, neither have the products or services that are being delivered but, rather, the way in which this is happening has been transformed. 

4.     What do you need to create? This is where the crucial capabilities of ambition, innovation and leadership are required. As I've discussed in previous editions of this Newsletter, most people in large companies get to the top by being good at delivering the current business model, products and services, not creating new ones. Examples of companies that are doing this well can be found in some of the Oil and Gas companies, such as Shell and BP, which are making major acquisitions of renewable technology, as well as some of the Asset Management companies such as M&G, which have created what they call ‘Impact Funds’, which focus on ‘Climate Solutions’ and ‘Positive Impact’.

In summary, this edition of the Newsletter has focused on what it means to bring about the transformation that is needed as we move towards 2050. Firstly, it is shown that more and more leaders recognise that they are in a valley, which can either be a place of transformation, or an abyss in which there is leadership and corporate failure. In order to progress successfully through this valley, a number of difficult and challenging questions need to be asked, answered and then the answers implemented. 

I would like to end by thanking the current cohort of the Oxford Advanced Management and Leadership Programme for their honesty and the thoughtful conversations that we are having, and wish them all the very best with the positive impact that they plan to have on the world. 

Finally, you may be interested to know why I am asking these questions? As a Senior Fellow of Management Practice at Said Business School (SBS), University of Oxford, my research and teaching focuses on how leaders transcend such 21st century challenges as disruptive technology change and the climate crisis; also, how leaders create cultures that are diverse, inclusive, resilient and high performing, alongside the ongoing challenge of delivering profitable growth. I direct the Oxford Advanced Management and Leadership Programme and, in this capacity, I work with leaders from many countries, industries and governments. All this has given me a deep understanding of how good leaders create value and bad leaders destroy it, as measured from multiple perspectives. One could argue that never before has this been so important on a global stage, hence the reason that I am undertaking this work.

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