The world of work is evolving and so is leadership. Charlie Wagstaff, managing director of Criticaleye, looks at how leaders’ engagement and collaboration is more crucial than ever, and how it will be a key differentiator between those CEOs who recognise that traditional methods of communication and influence are now becoming obsolete, and those who still adhere to narrow chains of command and hierarchies, and fail to look beyond their comfort zone.
Managing good relationships is essential for any successful CEO. It's a soft skill with significant tangible business benefits that can be applied across a wide pool of stakeholders, be they investors, your senior team, employees, customers or industry peers. If you've made it to the top of your organisation, you are clearly highly proficient in maintaining beneficial connections. However, CEOs who fail to recognise the value in a highly diverse ecosystem of contacts outside their immediate environments, will fail in a highly connected, digital and interdisciplinary business environment.
The world is changing
The business landscape has and continues to evolve exponentially, and at pace. Some factors are already apparent:
- risk of extinction: research suggestions that 40% of current Fortune 500 companies will have disappeared in the next ten years
- it's all about speed: it is not about large versus small but simply about fast versus slow
- competition: it will no longer likely come from within your own industry
- technology: this has totally levelled the competitive playing field
- people: millennials have and will continue to set the cultural agenda.
Digital disruption means that leadership teams have to regularly align their strategies to what's going on in the outside world, continually reviewing their priorities when it comes to investing in new technology, ensuring they have the right skills within the business to remain competitive and taking measures against the new risks a digital economy presents. Technological change and the shift to agile teams require leadership and the board to make different decisions faster.
Similarly, changing demographics within the workforce, namely the increasing number of millennials in any given organisation, are forcing leaders to adopt a new approach when it comes to attracting and motivating the best talent. As is well publicised, millennials are more collaborative, require complete openness and honesty from their leaders, and wish to work in a flatter, less hierarchical way than their predecessors. As digital natives, millennials have a lot to offer businesses but CEOs need to offer them the right employee experience to truly harness their skills.
The way leaders communicate has also changed. Gone are the days when CEOs could take a one-way approach to getting their message across. In today's environment, leaders are expected to take a more conversational approach to communication. Fuelled by a culture of social media, CEOs and senior executives need to ensure they are communicating honestly, that their personal values align with those of their organisation as they are more exposed and open to criticism than ever before, and that they address questions and concerns from inside and outside their organisation.
In this changing world, CEOs will become more isolated unless they tap into effective, trusted relationships. Who do you turn to when you need advice and how do you know what best practice is when so many elements of today's leadership are unfolding? Getting different perspectives and varied views on business-critical issues has never been more important or relevant for leaders, as well as understanding the internal challenges you will face when implementing the changes needed for your business to survive.
The business of collaboration is evolving
It's clear that time, effort and a certain skill set are crucial to getting the best value from peer relationships. It is also apparent that no CEO can choose to ignore the need to build ecosystems outside their own immediate internal networks, and that these exterior relationships should be broad and diverse if they want to address points of leadership and best practice within their own organisation and industry sector.
When we acknowledge the isolated nature of the CEO role, combined with the increasing complexity and ambiguity of the business environment, the need and value of a high-level, external relationship is clear. Done well, harnessing valuable peer relationships will make you a better leader as well as giving you a competitive edge.
There are, however, a few rules when it comes to building the right connections and leveraging them appropriately:
- Learning and knowledge exchange: as a CEO looking to make peer relationships, your main priority should be knowledge sharing and experiential learning. There may, of course, be personal opportunities within your ecosystem but they will probably only come as a result of your commitment to sharing your expertise.
- Diversity is key: maintaining only operational, industry-specific relationships at CEO-level will offer limited value in the long run. There is much to be gained from understanding leadership issues from a broad, cross-sector knowledge pool.
- Trust and mutual respect: probably the most vital element of an effective peer relationship is being able to trust each other and share stories that are confidential to gain advice. This, again, takes time, but once you can be open you will have a rich source of insight to learn from.
A new way of leading
It seems counterintuitive as a CEO to shift your focus from your own organisation and industry to the wider world and look for value in peer relationships, but this is vitally important to leaders' success and the continued growth of their businesses. Without that external sounding board and access to a vast pool of knowledge, leaders will struggle to remain competitive and understand best practice in a rapidly changing world.
How you approach relationships and build trust with your peers is a skill that must be built over time and is very different to the connections you have with your own chairman, board, shareholders and employees. There has to be an understanding that you both have something to offer, that the relationship is two-way and that you trust each other to share the challenges as well as the successes in order to find a way forward.
So while not every leader is good at maintaining and leveraging the peer relationships they have, recognition of the need for that relationship at all is the first hurdle. Getting access to an open and trusted peer group with an emphasis on sharing knowledge, experience and perspectives is the ultimate goal in a world characterised by ambiguity and change.
Words from the wise
"Leaders cannot be effective in isolation; this is a well-known fact. The relationship with your chairman is, of course, vital, but building and maintaining effective peer-to peer relationships that are broad and offer access to many different areas of knowledge is also fundamental," Ian Cheshire, chairman of Debenhams.
"What you get from a successful peer relationship is difficult to quantify but its value is huge. It's not about pushing your own agenda; you need to make sure you understand what it is that you offer to the mix at all times so that value is shared by all parties," Steve Holliday, former CEO
of National Grid.
"External peer relationships offer CEOs a unique opportunity to gain insight that is removed from the usual constraints and barriers of internal conversations where egos and politics can play out,"
Rita Clifton, chairman of BrandCap and Populus.
"A great leader admits that while they are accountable for a lot of things, they don't and can't know everything - it's a very precarious place to be, so having support and a shared understanding from a group of individuals in the same position as you is hugely helpful,"
Alastair Lyons, chairman, Admiral Group.