As an Executive, Are you Multiplying or Dividing?

Thursday, March 27, 2014 | Category :
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By Dr. Philios Andreou Sphika

Philios Andreou

In 1999, Nokia was not only leading  the technology industry, successfully capturing market share from competitors, but was also generating great returns to shareholders. The 1999 annual report titled “No Limits” reported a share price of $55, sales growth of 50%, and profit growth of 57%. 1 Its handsets appeared in the blockbuster Matrix —Nokia was part of the future! However, fourteen years later in 2013, Nokia's share price was trading at around $5 and the company was losing $1 billion per quarter. The tangible decline in the company’s competitiveness marks a tough position for any management team.

And yet, whether you’re leading Nokia through this period or whether you’re leading Apple, which has multiplied its value in the recent 10 years by 41 times, one thing remains constant — do you have the leadership talent needed to succeed in the future? Do you have the talent to help the company multiply going forward?

Creating Competitive Advantages is linked to your people

At the end of the day, an organization’s context, industry and competitive environment may all be different, but maximizing performance always goes back to the organization’s potential to keep adapting and transforming to satisfy clients’ needs and to drive differentiation from the competition. Adapting and transforming is what will create and sustain a competitive advantage in an ever-changing market.

In a recent HBR article, John Kotter revised his view on the parameters around change and transformation. 2 He has now asserted that today transformation is no longer about defining change plans and managing them effectively; it is about leading change. At the same time, change is not about change agents running through the organization making things happen, but rather it is about the alignment of senior leaders, who then take charge and lead the organization forward. In the end, it is no surprise that he concludes that while communication is still very important, it is not enough. To accelerate transformation, you need to shift mindsets, and to be effective, this means involving people in the process and leading them through the change.

This means that maximizing performance and sustaining competitive advantages is largely dependent on what people do, whether crafting strategies or executing initiatives, and how well they do it. This may sound straight forward; however, maximizing the full potential of employees is not easy.

So What Should Our Leaders Do?

Great leaders are required to do two things with their people. The challenge is that they cannot choose to do one or the other, but need to excel at both. They must focus their energy in leading their people and developing them for the future, while also simultaneously ensuring execution against the strategy on a day-to-day basis. Both elements are necessary and dependent on one another, but unfortunately, organization’s today do neither well enough.

Recent research conducted by The Economist Intelligence Unit and sponsored by BTS reveals strategy execution as a key challenge for companies today 3. Talent development and organizational capability are key to success. The two hundred senior leaders surveyed identified talent as one of the top five challenges inhibiting effective execution.

Lead the Business and Lead the People

A key misconception of modern management is the stereotype that great leaders are strategists who apply their high-level, global viewpoint to direct the people in the battlefield from the top of the mountain, far removed.  While strategic thinking and a broad business or “helicopter” perspective are both traits of strong leaders, people need to be led through a credible and hands-on approach.

People want to feel that their leader is right beside them, supporting their efforts, and connecting through real experience. As my fellow BTS Global Partners states, “People do not care about what you say – they care about what you do. They tend to listen less nowadays, but observe even more….So watch your hands and feet more than your mouth.” This applies to all levels of the organization.

The leader of today must be as comfortable connecting with front-leaders as senior executives. They must transition seamlessly all the time, willing to get their hands dirty while also engaging in high-level strategic discussions, willing to delegate and also allowing others to shine. The key is finding the right balance and consistently making the supporting decisions that enable success. It is proven to pay dividends.

Recent research conducted by BTS reveals that companies whose leaders adopt a hands-on approach to implementing strategy within the organization, setting expectations and defining actionable goals, are 32 % more likely to outperform industry peers.3

It’s like the athletes in a basketball game challenged to decide the best play in a given moment— should they take the shot, or pass the ball allowing a teammate to score? Under the pressure of aggressive competition, they need to make those decisions over and over again, while also considering the period of the game, the confidence level of their opponent, the strength of the defense formation in a specific moment, and the risks in a given play. As Nikos Zizis, the current playmaker for the Greek National Basketball team once told me, “Great playmaking is all about the quality of the decisions you make in each game ." 4

Develop – When & Where

More recently, the definition of strong leadership has extended beyond simply leading people towards an end goal to include the notion of development. This is all about the responsibility of the leader to create an environment that motivates learning and growing among each individual – an environment where people have the possibility to become better and thus generate more results.

This is not easy, especially in a world focused on rewarding success and penalizing failure. Jack Welch, the former CEO of GE, is often quoted saying, “In a war, we give our wounded soldiers a medal. In business, we shoot them for failing.” Instead, he challenges organizations to create an atmosphere where people dare to try and act and learn in the process. Of course, this will only be effective if we are able to improve through practice and past experiences.

The conclusion that comes from scientific research is that practice is an enabler of greatness 5. Laszlo Polgar, a Hungarian psychologist, explored this notion with his three daughters. He focused his energy to raise them to be world champion Chess players, even though he was not skilled in the game. Now, his daughters are all considered to be the best players in the world. Regarded as the number one player globally at only 14 years old, Susan became Grandmaster at 22. The performance of her younger sister, Sophia was classified as a miracle; she was named the 5th best player of all time. The youngest daughter, Judit became a Grandmaster at 15 years old and has been considered to be the number one player for the past decade. The only thing that stood between these astounding achievements and the young little girls was practice, hours and hours of dedicated practice.

To further accelerate learning, timely and relevant feedback is critical to identifying additional areas of development and continuing to drive improvement. Expanding beyond the chess analogy, all great sportsmen have a great coach who has enabled them to understand where they can improve, and then provided actionable steps that led to their success.

It is therefore no wonder that the business leaders of the future need to create opportunities for practice among their employees while complementing those experiences with actionable feedback. To elevate the organization and drive results, it is not enough to just direct people towards an end goal. To transform the organization, leaders must start by enabling people to transform, improve and grow themselves. This demands both training off the field and coaching on the field; it demands immersing people in a relevant environment where they can make mistakes with no consequences and then apply the learning to the real world.

Multiplying Growth: The Way Forward

So focused on multiplying results, the priority must be to move your top people from “expert managers” that prioritize yearly or quarterly results to hands-on business leaders that not only execute on the plans, but also invest time and resources in leading and developing their people to ensure both short and long-term success.

About the Author: Philios is an Executive Vice President and Global Partner at BTS.

1Nokia Annual Repor 1999 with share quotes from Bloomberg.

2Kotter, John, "Accelerate", Harvard Business Review, November 2012.

3 "Cracking the Code: The Secret to Successful Strategy Execution and Lessons for the C-Suite”, Sponsored by BTS and Conducted by the Economist Intelligence Unit, 2014.

4Private conversation with Nikos Zizis on playmakers qualities, 2013.

5Matthew Syed, "Bounce”, HarperCollins Publishers, 2010.


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