‘Higher-Ambition Leaders' are those CEOs who ran their companies above the 50th percentile for the industry (CAG) during their reign
There is less than 50 per cent trust in business leaders
Flemming Norrgren, Professor of Management, Chalmers University in Gothenburg & Director, The TruePoint Center, shares with People Matters the emerging concept of ‘Higher-Ambition Leadership’ as studied through the stories of 36 CEOs who share a higher ambition to create economic and social value in meeting the new standards for leadership
How do you qualify ‘Higher-Ambition Leaders’?
‘Higher-Ambition Leaders’ are those CEOs who ran their companies above the 50th percentile for the industry (CAG) during their reign (normally more than 7 years, sometimes less for some turnaround cases.) Their companies have appeared on best places to work lists or have been nominated by research colleagues, recruitment firms, business press or academic case articles. They had to meet at least three of these criteria together with the performance criteria to get into the sample of the study that got covered in the book.
Are there any traits of CEOs that reflect that they belong to this particular type?
We are reluctant to talk about traits, but we mention persistence combined with flexibility and reflexivity. Many of the CEOs told us how they dealt with hardships and failures and learned from them, often supported by a senior CEO/divisional head in their early years. We see also the clear signs of integrity - not only morally but the ability to integrate different elements of managing in a consistent way. I would say these Higher-Ambition CEOs are “creative problem solvers” who are able to integrate seemingly opposite solutions to different problems. We have introduced the concept of “Leading with Sisu” (Finnish for guts and persistence) where we describe their personal practices as being very present (e.g. direct communication), that they stay for the long run, and that they possess endurance and ability to simplify and get to the core of complex challenges.
You talk about the increasing need to manage the tension between ‘performance and people.’ Why is this especially important now?
The need to manage the tension between ‘performance and people’ is important because of the negative trend in what key opinion leaders as well as employees think about business leaders in general for more than a decade. There is less than 50 percent trust in business leaders. It could, in the long run, undermine the market economy and lead to social unrest if we add the increased frequency of serious downturns in the economy. Seen from the opportunity side, ‘Higher-Ambition Leadership’ could restore trust and also help such companies win the global war for talent.
How are CEOs able to create lasting economic value and superior social value?
By building social capital in their companies (through high level engagement of employees and intense interest in growing capabilities, both organizational and human), and at the same time contributing positively to the communities where they operate, not only through CSR but also by engaging in infrastructure/educational systems/sustainability. This creates a whole different set of relations with authorities, customers and employees, because they practice commitment to increase shared value.
Is this a global phenomenon? What is its applicability to Indian CEOs?
Yes, we think it can be the emergence of a globally applicable model for leadership. We also think this will be important for India to attract more investments and partnerships with Western companies. Many such companies are present in India currently or want to operate in India, but are held back by corruption. The Indian CEOs profiled in the book are, to our minds, great positive role models and they seem to us to have the capabilities that would be successful in any important western company.
Most CEOs tend to focus solely on the shareholder due to pressure from capital markets. But how easy is it for CEOs to balance the focus on performance and the focus on people?
That is not so easy, although we believe this will become crucial in the truly global and connected world, where human movements become increasingly powerful with the help of social media (just look at the Middle East and what happened around Anna´s fast). It takes courage; it will take developing new practices and responses to managerial issues, and the book contains a lot of practices on how one can do this in different settings, proving that it is feasible.
What are the principles and practices used by pioneering leaders to build great companies?
‘Higher-Ambition Leaders’ create more than strategies. They forge strategic identities, which speak to people’s hearts. They balance complex organizational structures with an inclusive culture that fosters a community of shared purpose and honors diversity. They establish performance management practices which prioritize both human and economic growth. They build a resilient leadership system where hundreds of leaders are actively engaged in pursuing the mission – it becomes a collective leadership capability and not just a collection of individual leaders who protect and promote their own agendas.
If you just take strategy as an example, many companies let some high-level staff and consultants do the main work. Most of the ‘Higher- Ambition Leaders’ are personally very engaged with their top team and they invite hundreds of other leaders to be actively involved. In the book, we talk about these leaders creating less friction (conflicts, resistance, turf games, sub-optimization, etc.) and more energy (engagement, commitment, collaboration and dynamic team work).