The New Keys for Leadership Success in a Disruptive World
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Episode 152 Transcript:
Chris Curran: Growth Igniters Radio with Pam Harper and Scott Harper, episode 152: The New Keys for Leadership Success in a Disruptive World.
This episode is brought to you by Business Advancement, Incorporated enabling successful leaders and companies to accelerate to their next level of success. On the web at BusinessAdvance.com. Now, here’s Pam and Scott.
Pam Harper: Thanks Chris. I’m Pam Harper, founding partner and CEO of Business Advancement Incorporated. Sitting right across from me, as always is my business partner and husband, Scott Harper. Hi Scott.
Scott Harper: Good Morning Pam. It’s always a pleasure to join you again on Growth Igniters Radio. As always, our purpose is to spark new insights, inspiration, and immediately useful ideas for visionary leaders to accelerate themselves and their companies to their next level of game changing innovation, growth, and success. Pam, our regular listeners know that it’s essential to stay current on the latest issues on leadership. We believe that this needs to include understanding how boards are shaping governance to deal with this disruptive world we live in.
Pam Harper: That’s right. The fact is whether you lead a public company or a private company and whether or not you have a formal board, the only thing anyone can confidently predict is that the world is going to become only more unpredictable going forward.
Scott Harper: You have that right.
Pam Harper: To keep creating value in both the short term and long term, we need governance that takes into account leadership issues for both today and tomorrow. This means we’re going to need CEOs, C suite and senior executives who are willing and able to approach leadership in some dramatically different ways. Someone who can shed new light on these issues is our returning guest, Peter R. Gleason, President and CEO of the National Association of Corporate Directors. He is a recognized expert on board leadership and corporate governance issues and serves as a member of NACD national faculty.
Peter is regularly quoted in the media and is a frequent presenter on the subjects of corporate governance, executive and director compensation, risk, strategic planning, and board shareowner relations. He’s served as a commissioner on every NACD Blue Ribbon Commission report issued over the past 16 years. This includes the most recent releases on these strategic asset board, long-term value creation, strategy development, talent development, and board diversity. You can see much, much more about Peter’s background by going to growthignitersradio.com episode 152 and scrolling down under his bio. Peter, welcome back to Growth Igniters Radio.
Peter Gleason: Thanks, Pam. Thanks, Scott. It’s great to be back.
Pam Harper: So much has gone on since the last time you were with us. We were thinking back, it was 2015 when we were first talking about a lot of the changes between board and management. Of course the world has only become much more disruptive. But before we get started talking about this topic, could you tell us just a little bit about the Blue Ribbon Commission? A lot of people may not know about this.
Peter Gleason: Sure. We actually host a Blue Ribbon Commission every year on a different topic. What we tried to do is gather, quote-unquote the smartest people in the room. We get directors. We get CEOs. We get subject matter experts. We get governance experts. We put them in a room together twice over the course of about an eight-month period and dive deep into a topic. We get a broad range of perspectives and views on a current issue. The one that we just did that wasn’t in my bio was on adaptive governance, the board oversight of disruptive risk, and really looking at how is that impacting the board? How does the board need to think about that topic as they look at overseeing the company itself?
Pam Harper: That is, in fact, the report that we want to focus on. What issues prompted NACD and the commission to shift from focusing on the past as a predictor of company performance and risk for the future to focusing on staying ahead of the curve and looking for signs of what could disrupt your company?
Peter Gleason: Well, I think that you actually just answered your own question with the concept of risk. That risk is so different today than it has been in the past because of the pace of change that we’re facing. It’s not just technological change, it is geopolitical change. It is natural environmental changes. It’s things that are constantly evolving around us at such an advanced paced that you have to think differently. It’s not things that are going to be on your traditional ERM grid. If you think back to something like cybersecurity, 20 years ago that wasn’t even an issue. Ten years ago it was kind of a fleeting issue for boards. But it was … There were technology experts that were honed in on it. Now it’s almost in the ERM grids for every company. But it can be a reputational risk. It can be a shareholder risk. It can be a financial risk. It falls into all the categories. We need to start thinking differently about some of these risks that can be thrust upon us that weren’t here a few years ago at the magnitude that they are now.
Scott Harper: This is really different from the classic way of looking at disruption as coming from competitors who are going to launch new technology that knocks us out of the box. You’re taking a much broader view. In the most recent report, you presented quadrants for thinking about risk in new ways and how to anticipate and adapt governance to stay ahead of the curve. Can you tell us a little bit more about that?
Peter Gleason: Yeah. Well, I think that Scott, you hit a really interesting point in that it’s not the traditional stuff that we’ve always thought about. It can come from different areas. When you’re talking about competitive risk, we always tend to look within our own industry for what are the competitors doing? Can we stay ahead of those risks? Can we out-compete our competitors? We don’t know where our competition is coming from now. If you think about … Everybody refers back to Uber and Lyft and the medallion cabs. I don’t think the medallion cabs were really thinking about a ride-sharing service driven by an app, that it would might disrupt their industry. It’s turned the whole industry on its head.
Think about those same companies in the driverless car world. You got Google. You got Apple. They’re potentially competing against the mainstream car manufacturer. Now you’ve got all the electric cars coming into the mainstream and everybody in the traditional automotive industries are trying to catch up with the new players in this market. It’s not that the competition and the disruption is necessarily coming from within your own market. It’s coming from the entire market and you don’t know where that might be. You have to have a broader scope of what’s competition.
Scott Harper: Of course, disruption is more than just competition. There are disruptive forces that are changing how companies have to govern from talent to legislation to things that we can’t even anticipate.
Peter Gleason: Right. That’s the whole geopolitical side of the equation. You can look at our current environment and tariffs on different countries, tariffs on our country’s exports. It can change your strategy almost overnight without a whole lot of warning. You have to really dig deep into your strategy. This comes to the other Blue Ribbon Commission Report we did back on strategy development of really looking at the assumptions on what your strategy is based and pressure testing those on a regular basis. Do they still hold water given the environment that we’re operating in? All these topics kind of feed together into how you oversee the company. That’s why we’re looking at all these topics so broadly. But the inner connection between them is critical for boards to start thinking about because there’s disruption over here. There’s geopolitics over here. Then say you’re in a flood zone for a natural disaster. It hits and all of a sudden your operations are down. You might have … if three of these forces are hitting at once, you gotta rethink what you’re going to do.
Pam Harper: In fact, the way that you’ve been talking about disruption has a lot to do with the impact that these changes can have on a company. Just seeming to come out of nowhere. All of that really points to the need for a new type of leader. That was something that I thought was very interesting in the report is the recommendation for a new type of leadership, both culturally and even the focus. Let’s talk a little bit about that.
Peter Gleason: Sure. One of the quotes we say is that we’d always looked at operating performance as a predictor of success and leadership. Were you a good operator? It’s not that this is a zero sum game that you no longer look for that because that’s obviously an essential talent in anybody in business.
Scott Harper: Absolutely.
Peter Gleason: The ability to be nimble, to be agile, to think differently about competition, to open different dialogues, to gain different. That all is a much more important skill today than it ever has been before because of the way our market is changing. The ability to gather different groups in the room, to have diverse perspectives around the table, to have diverse experiences around the table and to be open to that dialogue around could it be something else? Again, this all goes back to that pressure testing our assumptions.
We may think that our strategies are going to take us from point A to point B and we’ve got the right infrastructure, we’ve got the right resources to do that. Well, what if you don’t? What if something happens to disrupt that flow? You may need some other insights as to how are we going to get around these issues? How are we going to continue to move the company forward? It really is kind of a different approach to leadership. Being much more open, much more nimble, much more agile to really think about what are the different possibilities we have in front of us because the landscape may change in front of us as quickly as possible.
Pam Harper: Absolutely. It all comes down to the importance of recognizing when it’s no longer business as usual. On that, we’re going to take a quick break. When we come back we’ll dig deeper with Peter Gleason, President and CEO of NACD about some of the new criteria that the Blue Ribbon Commission recommends for selecting and evaluating CEOs, C suite and senior executives to lead in a disruptive world. Stay with us.
Scott Harper: This is Growth Igniters Radio with Pam Harper and Scott Harper. We’re brought to you by Business Advancement Incorporated. We focus on enabling visionary leaders to guide, ignite, sustain and boost momentum for game-changing results on the web at businessadvance.com.
Pam Harper: We’d like to welcome our listeners and especially our many new listeners. If you’re not already subscribed to our Growth Igniters community, you can get even more value by signing up. You’ll receive reminders of our new biweekly podcast along with a link to a page filled with all kinds of resources. On off weeks you’ll receive a Growth Igniters post, which is about a two-minute read.
Scott Harper: Go to growthignitersradio.com and click the red sign up now button at the top right of the page.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper. That’s me and Scott Harper. Today Scott and I are speaking with Peter Gleason, President and CEO of the National Association of Corporate Directors. Peter, how can people find out more about you and NACD?
Peter Gleason: Well, the easiest way is to go right to our website, which is nacdonline.org. You can dig around there and find a whole bunch of information about what we do and why we do it.
Pam Harper: The Blue Ribbon Commission Reports, the most recent ones on both disruption and also culture as a corporate asset.
Peter Gleason: Actually the main text of both of those reports is available for free to the public. To be the … to get the tools and all the dependencies that go along with it, you actually have to be a member of NACD. But we think that the content of the reports themselves is so important that we make it available to the public.
Pam Harper: That’s great. We will be sure to provide links to that under resources as well. Again, you can go to growthignitersradio.com episode 152 to find out more. As we left off, we were talking about the importance of leadership in a new way. Governance in a new way to deal with what is definitely a disruptive world. Let’s talk about some of the specific issues that the commission was recommending. First of all, having to do with leading the development of ideas and insights about future trends and opportunities. What does the commission expect boards to look for in CEOs and senior executives who could lead in this disruptive environment? What would they have to do differently or better?
Peter Gleason: Well it goes a little bit to the conversation we were just having before the break. This is really … A much more collaborative environment is what’s needed and the face of the disruption that we all see right now in the business community. That the openness to alternative ideas and non-traditional points of view in the dialogue within the management team. You may have left-field ideas that you go, wait a minute. That’s completely out of line with what we’ve traditionally done. Well, that may be what you need to … That may be a different page that you need to turn in how you’re going to run the company. We always say you have to disrupt yourself. You have to be thoughtful about what do you do now that maybe you need to do away with? What are our competitors doing that may lead us down a path to be more effective, more efficient, and really think differently about how we conduct our business?
Within that is almost the discussion we were having, thinking about questioning and pressure testing assumptions. We set strategy at the beginning of every year. You’re refining it and maybe you got a three year plan, whatever it might be. You make a whole series of assumptions that you’re basing this plan on and because we change so rapidly, maybe that has to change, too and those assumptions are no longer valid. Well then what do you do? How do you go back and re-trigger what your basis for that strategy was? Maybe it needs to be a different strategy. When we were looking at the strategy BRC a few years ago, that was really what came about is say your supply chain for your core product gets cut off because of the geopolitical issue and you can no longer get that. How do you turn quickly, not disrupt your shareholder value proposition and change strategy and not lose confidence in the marketplace when this is something that’s really out of your control because of a political issue or whatever the case might be?
How do you turn on a dime like that? That really goes back to, well, what are the alternatives to our strategy that didn’t get chosen or the underlying assumptions to each one of those? How do we reassess those when we need to? But that requires the leadership team to be open and to really not get locked in and sold on this is the only way we can do this. But be receptive to new ideas. Be entrepreneurial. The ideas may not come from the senior executive team. They may come from down lower levels in the organization with people in a … You hire bright people. You got to take advantage of their insights.
Scott Harper: Absolutely. That’s something we promote all the time. Now, this is going to require, as you said, new ways of thinking, flexible thinking for new ways of problem-solving. When you’re looking at top leadership, CEOs and senior executives, what are some of the top traits that signal that they can do that?
Peter Gleason: I think it’s a willingness and that … It’s a willingness to listen to those ideas and not be locked into I’m the smartest guy in the room kind of attitude. It’s the ability to leverage the talent that you have within the organization. It’s, I think the openness. Really, to me that’s one of the big things is the openness to other ideas outside of your own. Those traits together with the ability to lead. You can’t lead if you don’t have followers, right? So you got to be able to harness the organization, harness the talent within the organization, push in the right direction and constantly challenge yourself. You can see that in leaders when they’re sitting around a table of whether they’re just so locked into, my idea is right and I’m taking this hill or Mary, I love your idea. Maybe we can combine forces on this and go a little left to center and that might lead us to greener pastures.
Pam Harper: It sounds like one of the big things that is going to be dramatically different is rather than say management and boards sitting together and just having good conversations as in we’re all getting along and everything’s just fine, that it’s okay to have a little bit of tension about, well, we’ve always done it this way before. But you know what? Now we need to go in this different direction and to work together in different ways. What do you think about that?
Peter Gleason: I think that’s part of the teamwork that has to happen within the organization and leadership. I look at my team. I’ve got four direct reports who lead different business units. There is constructive tension. They do rely on each other. But they rely on each other and also problem solve across the organization. I think that has to be inherent in building those relationships across different business units to think differently about how do we approach the marketplace ’cause the marketplace is different. There’s a dynamic in the marketplace that has to be reflected in how you approach it from a customer service standpoint, from a product delivery standpoint. You have to build those relationships internally and leverage those relationships.
Scott Harper: That’s going to require new levels of being able to build trust among people who may not be used to talking to each other. What do CEOs and senior executives and boards need to do differently or better so there is this higher level of trust that will promote this higher and broader type of communication?
Peter Gleason: I think a lot of it comes down to that communication message that we’re not all locked into what we’re doing. We have different ideas with different backgrounds. We have a diversity of skill sets. We have a diversity of experience. Those can all benefit us. But we only can benefit if we bring them to the table and we communicate effectively around how do we bring those together. Communication is critical in this whole thing of learning how to listen to other viewpoints, learning how to adapt and change what you’re doing to reflect what might be a better idea and really having almost over communication to build those trust levels within the teams.
Pam Harper: The leaders who are able to do this are definitely going to be the ones who are going to be most successful in this disruptive world. Well, we’re going to take another quick break and when we come back, Scott and I will speak more with Peter Gleason, President and CEO of NACD, about useful ways to be more successful in a disruptive world. Stay with us.
Scott Harper: You are listening to Growth Igniters Radio with Pam Harper and Scott Harper brought to you by Business Advancement Incorporated. We’re on the web at businessadvance.com. Now, Pam, some of our listeners may know that we speak at a variety of company events, conferences and off sites. Can you tell us why clients engage us as speakers?
Pam Harper: Well, one of the most challenging aspects of leading a successful company in this disruptive world is answering the tough question of how do we stay ahead of the curve when the journey keeps changing?
Scott Harper: That’s right.
Pam Harper: Well, as Growth Igniters ourselves, we know how to address this issue and spark the new thinking, new conversations and new decisions that generate the momentum it takes to stay first, fast and foremost.
Scott Harper: To schedule a brief call with us to discuss how we can help you and your company get even more game-changing results, contact us today at businessadvance.com.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. Over the last two segments, Scott and I had been speaking with Peter Gleason, President and CEO of NACD, the National Association of Corporate Directors about the new keys for leadership in a disruptive world. Peter, tell us again how people can learn more about NACD.
Peter Gleason: The easiest way is to go onto our website at nacdonline.org. You can find a host of information about what we do and how are we doing.
Pam Harper: You can access those links also by going to growthignitersradio.com episode 152 and scrolling down under resources. Well, we are at the part of our podcast where we like to talk about the immediately useful ideas for, in this case, leadership success in a disruptive world. Peter, what would be the first one maybe having to do with ongoing learning?
Peter Gleason: I think that’s a commitment that this is our business. So it’s … One of the cores of what we look at is committing to ongoing learning. That’s true at both the management level and at the board level. That’s where we thrive is in the board continuing education world. But if you’re thinking about disruption and you’re not learning about it, if you’re not staying active, if you’re not going to industry shows and going to things like CES or south by southwest understanding what’s out there and how it may change your world, that world may run by you real quickly. We’re constantly encouraging people and board members to stay active in the community. To go to as many events as you can fit into your schedule and to commit to this ongoing learning that’s necessary, not just about disruption but about culture, about management styles, about board management relationships, different things that you can use as tools as you practice your trade in the board room.
Scott Harper: It’s hard sometimes to lift your head up and look out there for new ideas when there’s so many demands. But it’s really worth it. That’s absolutely true. Now we talked about having broader more open conversations. What’s a practical idea that leaders can use to actually build that into the culture so that you get new thinking and new problem solving and greater adaptability?
Peter Gleason: All right. I think it’s incumbent upon the leaders to open those conversations. I think that’s the challenge. It’s one thing to have a sidebar conversation in the hallway. It’s another to have it around the board room table and to really open up to new ideas, to really foster and embrace new thinking and to really go after problem-solving that way as a collective as opposed to thinking we’ve got all the ideas down and we’ve got all the solutions. Again, those dialogues … It may not be at the board room table. It may be in a staff meeting. It may be a town hall type environment where you’re inviting different perspectives. You reward those things through your organization for creative ideas and or suggestions that might help us operate better internally and produce better end products and services to the market.
Scott Harper: Making it part of the agenda and then reinforcing it when it actually happens.
Pam Harper: I think that is one of the key things when I think about it because a lot of times people may have ideas and then they never hear about them. So, that when leadership at every level is getting back to people and talking about maybe why something is or is not going to be adapted, that might be a reinforcement all by itself.
Peter Gleason: It maybe so ingrained into your daily operations in your company that you don’t think about it. Internal training can happen across different departments. We just had a suggestion that we adopted for internal training purposes that came from an unlikely source. But we adopted it, we announced that we’d adopted it and we made it available to all of the departments within the organization from a suggestion from a staff member. When that staff member sees that his ideas are taken seriously, that they get implemented, that leads to a healthier culture within your organization because people are heard. It’s not just everything that happens is decided at the top of the House and pushed down to the organization. That everybody’s a valued employee and everybody can contribute to the success of the organization. Ideas do get lifted and listen to.
Scott Harper: That really builds trust all throughout the organization. Absolutely.
Pam Harper: That leads to the third immediately useful idea. Now one of the things that I noticed is that NACD also talks about nonfinancial metrics for assessing company culture and adaptability. Can you tell us maybe one or two that would be useful in what we’re talking about today?
Peter Gleason: Sure. Again, it goes back to building the culture within the organization and really focusing in on … You can always look at the numbers. Everybody’s got a number to report on. But dig a little bit deeper. Look at employee engagement surveys. What are people telling you that they value about coming to work? That they value about the organization? Are you mission focused or are you numbers focused? How can we adapt to different ideas that come throughout the organization? Are we tracking things like again, from a cultural standpoint, absenteeism, turnover rates?
There are numbers behind those but they’re not the typical financial metrics that get reported into … to your shareholders or to your board. But really digging deep on … Do we have an environment here that fosters, develop and fosters improvement and continuous improvement? Because that continuous improvement that I talked about in idea number one has to drive through your whole organization. So from a cultural standpoint, creating opportunities for people to advance, looking at whether they’re motivated and coming to work and love what they do or are they not coming to work and looking for different jobs and you’ve got a high turnover rate. Different things that you can look at to help foster a healthier company and a healthier culture within your company.
Pam Harper: Definitely. The leaders who are tuned to these kinds of nonfinancial metrics are going to find that there’s so much more information available than you might otherwise think. I’ve certainly seen that.
Scott Harper: It really contributes to the adaptability of the organization from top to bottom.
Pam Harper: Peter, do you have some final thoughts about the new keys for leadership success in a disruptive world?
Peter Gleason: I’ll go back to something I said earlier, which is, challenge yourself. Just tried to disrupt your own company and that will lead you to hopefully some ideas about who might be able to do this from the outside and really hurt you. If you’re going to continue to thrive, you’ve got to be able to think differently. You’ve got to be looking at competition differently. You’ve got to try to disrupt your own business and figure out how you can do things differently to succeed in an environment that’s just changing so rapidly in front of us. Competition can come from every corner of the marketplace. It’s this adaptability. It’s this agileness. It’s the ability to really think differently about your business and the competitive forces that you’re facing.
Pam Harper: Absolutely. Well, thank you so much for being our guest at Growth Igniters Radio.
Peter Gleason: My pleasure. Great to be with you.
Scott Harper: That’s been great. Peter, thanks so much and thanks to you out there for listening to Growth Igniters Radio with Pam Harper and Scott Harper. To get show notes and resource links for this week’s episode, including downloadable reports that Peter mentioned, go to growthignitersradio.com episode 152.
Pam Harper: Until next time, this is Pam Harper…
Scott Harper: And Scott Harper…
Pam Harper: Wishing you continued success and leaving you with this question to consider:
Scott Harper: How are we going to adapt our governance and leadership so that we can continue to adapt and thrive no matter how disruptive the world is?
