Tuesday, October 11, 2011

Leadership, After All


The noted artist Willem De Kooning, as he aged, commented that, "you have to change to stay the same." Sometimes, as leaders, we find wisdom in rediscovering what we already know.
Having met with numerous Board members and corporate leaders recently, many seem to be off put off by the loss of control over many of the circumstances that previously could be “managed”. Many are questioning whether the old standards still apply.
We were struck by the following insight.

Recently, we asked several CEOs about future commitments, i.e. just how far forward they feel comfortable in predicting outcomes. The answer from most was one quarter... three months... astoundingly short given that when we asked this same question a few years ago, the answer was, on average, four quarters.

This suggests that in a time of uncertainty, in spite of the strength of current quarterly results, whether the light at the end of the tunnel is recovery or an out of control train speeding in our direction?
And, that it is very easy for CEOs and their boards to resist the falderal of the moment and be more easily influenced by the herd.
Our experience suggests that the most successful leaders actually embrace uncertainty. They see it as an opportunity for a re-commitment to the building blocks of excellence. As one notable CEO said to us, “the basics always win out.”
We know that ethical corporate cultures win out. We know that deep dive rigor and commitment to operational excellence, wins out. And we know that well disciplined and effective corporate governance is a huge plus in dealing with the unknown. All of this takes work and extraordinary discipline, especially today with daily fluxes and contrary information that impact how businesses do business.
The best leaders, we have observed, don’t become unbalanced by conditions that they can’t shape.  They know their troops are observing whether they are being led with calm and confidence.
However, “back to basics” doesn’t mean that leaders should stick their heads in the sand. Rather, it means stressing the “known” while being flexible to address matters beyond a leader’s control.
Today, though, there is a tendency to try and outsmart current conditions hoping to gain advantage. Many CEO’s have a fear of being left behind, and being criticized by their boards for not being more proactive. It is impossible to “map” uncertainty.
So, here's our prescription for CEOs and Directors.

Because you can't control the unpredictable, rely on what you know... that means drill deep in your business…then dig deeper.
Don’t outsmart yourself or believe that you can outsmart the markets.
For Directors, demand transparency of your CEO and be prepared to invest extraordinary time to fully comprehend the various levers of your company's value… know the how and when.
For CEOs, demand deep dive information and dig in yourself. Set the pace of expectations. Demand excellence.  Redouble your effort to communicate to all “stakeholders.” Be clear about issues, challenges and opportunities with your board and your senior team.
Be consistent, focused and relentless. Isn’t that what leadership is all about?
By Joel Koblentz on October 11, 2011, Managing Partner of the Koblenz Group

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