Yesterday I had the privilege to join a conversation hosted by IBM with Harvard’s Rosabeth Moss Kanter, a number of senior IBM executives and small group of representatives from the UK’s leading business schools and think tanks, including London Business School, Cranfield, Manchester Business School and the Centre for Tomorrow’s Company. The conversation with Rosabeth was convened to discuss her new book ‘Supercorp: how vanguard companies create innovation, profits, growth and social good’.
In the book, Kanter argues that the companies that are keeping ahead of the curve in terms of market changes and customer needs are the businesses that are also progressive, socially responsible human communities. Kanter looks at ‘vanguard companies’ and explores exactly how they create innovation, profits, growth and social good. The “supercorps” include Banco Real, CEMEX, IBM, ICICI Bank, Omron, Procter & Gamble, Publicis Groupe, and Shirshan Bank.
As the FT’s Stefan Stern notes in his review:
‘These are companies that aspire to be “big but human, efficient but innovative, global but concerned about local communities… The best have business prowess and clout with partners and governments, but try to use their power and influence to develop solutions to problems the public cares about… The leaders of a vanguard company espouse positive values and encourage their employees to embrace and act on them.” … Vanguard companies understand that the early 21st century is characterised by uncertainty, volatility and complexity, Kanter says. They have grasped the need for diversity in their organisations. They err on the side of transparency, and take a responsible approach.’
In our round table, Rosabeth talked about the massive cultural change that had been required in these organisations to achieve vanguard status, and the role of leadership. She argued leadership in the twenty-first century means putting your values ahead of what people might be telling you are your short term interests, it means people standing up and becoming vocal champions, but also going beyond talk to action as well. Leadership in the twenty-first century is also about collaboration and the skill to build constituencies and coalitions, to coalesce people around tackling major global challenges.
Another review of her book here explores further some of the implications for leadership…
‘ “Relationships: Persuasion and diplomacy” is one of the characteristics of vanguard leadership. Kanter suggests that such a leader “Can communicate, listen, and inspire. Likes to connect, to collaborate, and to find solutions that are good for many people. Can enlist people in projects and motivate volunteers. Is partnership oriented, seeing opportunities to leverage resources by tapping networks. Work as an effective, enthusiastic mentor.”
However different they may be in most other respects, all of the CEOs of vanguard companies she discusses in this book… possess highly-developed skills for establishing and nourishing relationships within and (especially) beyond their organization. Their effectiveness is explained by ability to see things in context and understand complex interactions between and among many variables. They have a bias for action and are results-driven when seeking solutions for their own organization as well as for the clients it is privileged to serve. They have what Daniel Goleman correctly describes as “emotional intelligence”: exceptional self-awareness (of weaknesses as well as strengths), empathy, respect for individuality and principled dissent, and a sincere delight in others’ achievements. They are also values-driven, take very seriously their fiduciary responsibilities as a steward of resources, and recognize, indeed embrace a higher calling than merely making money…
In vanguard companies, Kanter points out that competences and capabilities such as these are by no means limited to CEOs or only to executives at the C-level. On the contrary, they are developed in those who occupy positions throughout the enterprise, at all levels and in all areas. Kanter concedes that the vanguard model “turns organizations upside down and inside out. They become less hierarchical and more driven by flexible networks. They become more open and transparent to the outside world while bringing society and its needs inside. As an ideal and an aspiration, the vanguard model attempts to reconcile contradictions: to be big but human, efficient but innovative, respecting individual differences while seeking common ground, global in thinking but concerned about local communities.” ‘
Cranfield’s David Grayson posed the question in our roundtable ‘What does Rosabeth’s thesis mean for what we do in business schools?’, and drew attention to Ashridge’s recent research with the United Nations and EABIS where, in a global survey of CEOs and senior executives, 76 percent agreed that senior leaders in their organisations needed to demonstrate the kind of leadership articulated by Rosabeth, but fewer than eight percent thought either their own organisations or business schools were doing a very good job of developing and fostering this kind of leadership at the moment.
There are actually some very strong echoes of Rosabeth’s themes in Ashridge’s research, and also Tomorrow’s Company’s work on Tomorrow’s Global Talent. Ashridge’s work argued that the global leader of tomorrow needs to understand the changing business context – 82% of those polled said senior executives need to understand the business risks and opportunities of social, political, cultural and environmental trends. And they needed to know how their sector and other stakeholders are responding. Senior executives also need the skill to respond to this information – 70% said that leaders need to be able to integrate emerging social, political, cultural and environmental issues and trends into strategic decision-making.
Ashridge’s research identified a second cluster of attributes around the ability to lead in the face of complexity and ambiguity. The challenges and opportunities of the twenty-first century are complex – there is often little certainty and little agreement about both their precise nature and the response that is required. 88% of those polled say senior executives need the ability to be flexible and responsive to change; 91% – the ability to find creative, innovative and original ways of solving problems; and 77% – the ability to balance shorter and longer term considerations.
The final cluster to emerge from our work was around connectedness – the ability to understand the actors in the wider political landscape and to engage and build effective relationships with new kinds of external partners, including regulators, competitors and NGOs among others. The mindset with which our current leaders are groomed does not encourage productive engagement with partners outside the organisation. Leaders receive plenty of training in negotiation skills, for example, but on the whole, lack the skills for engaging in effective dialogue and partnership. To survive and thrive, 73% of senior executives say the global leader of tomorrow needs to be able to identify key stakeholders that have an influence on the organisation and 74% say they need to understand how the organisation impacts on these stakeholders, both positively and negatively. 75% say senior executives need to have the ability to engage in effective dialogue and 80% say they need to have the ability to build partnerships with internal and external stakeholders.
Rosabeth was in London for the launch of the Young Foundation’s ‘City Year’ initiative, where young people spend a year working on the pressing challenges of our time. As Rosabeth noted, this kind of thing is now considered an important part of career development. This is new, it didn’t exist 20 years ago, but now even MBAs are queuing up to start their own social enterprises to address the world’s major challenges on a commercial and therefore sustainable basis. This, Rosabeth said, is the new leadership.
Ashridge is currently leading a second phase in our research programme on ‘the new leadership’. The project – entitled ‘Leading Organisations of Tomorrow’ – is seeking to explore in detail how ‘vanguard companies’ are innovating in their leadership development practices to turn this kind of vision into a reality in their organisitions, and foster a generation of leaders equipped to embrace the kind of leadership the twenty-first century demands. We will be sharing some preliminary findings at a major event in London on October 14th this year. Watch this space for more!
Ashridge on Sustainability 