WHAT sets highly ambitious CEs apart from other business leaders? This is the question that Harvard Business School professor Michael Beer and four colleagues look to answer as they question the heads of some of the most successful companies in the world, profiling 36 CEs from Europe, North America and India. When Nokia executives are adamant they should dump its cellphone division, CE Jorma Ollila tells his colleague all that is required are a few tweaks.
The youthful Ollila turns to young engineers and managers to build up the company and it proves a crucial move. Rather than looking to beat Motorola, its biggest competitor at the time, he opts for a different move: to set the company apart from the rest. This he does by changing the focus of cellphones to one of connecting ordinary people, away from the existing market at the time — that of business executives.
Details
- TITLE: Higher Ambition: How Great Leaders Create Economic and Social Value
- AUTHOR: Michael Beer, Flemming Norrgren and co-authors
- PUBLISHER: Harvard Business Review Press
One essential characteristic of successful CEs, say the authors, is that they spend considerable time and energy engaging with people. They do so in a way that is easy to understand and that gains the respect of staff and others.
Volvo’s Leif Johannson joined the company when it was struggling to gain direction and after his predecessor was forced to resign after a merger bid with Renault was turned down. Johannson is called a traitor when he sells off the company’s car division, and shifts focus to producing trucks. But the authors argue his grit and persistence pays off. This he backs up with simple symbolic acts, such as undertaking a tax consolidation among the group, which shows that head office has a firm grip on the company. He also engages with staff more and even moves to stay closer to the town where Volvo is based.
Similarly, Tim Solso of Cummins helped turn around the US engine manufacturer, power generation and component distributor by including more international staff in decision making. This led to a strategy as well as a name change, and raised net sales, net income and staff numbers.
In the end, the path to becoming a more ambitious leader, the authors argue, centres on a number of practices — including finding one’s anchor, be it friends, family, a higher purpose — as this will pull one through the tough times. Even simple habits, such as meditation and exercise, can help. Finding a mentor or coach is also important. CEs must also engage more with staff through team-building meetings, social media or other forums. Being honest will help build the trust that an organisation needs if it is to become more productive.
The authors also believe business schools should widen their focus from one that sees the prime role of business leaders as producing shareholder value to one in which leaders are coached to see the value of integrating the different functions of business — from human resources to management — to allow for more holistic decision making.
Ultimately, more ambitious CEs, say the authors, are just as concerned about the people and the larger good as they are about financial results.
However, possibly because it is written by five people and because the team did not set off to test any existing hypothesis, the book’s various arguments often feel like they are strung together rather too loosely. But one thing is clear: to survive, those leaders that don’t involve more staff in decision making or that neglect to define a unique strategy, created within the company, are doomed.
Post a comment