Leading in Uncharted Territory - A clear line of sight

Uncharted Territory
It now seems clear that the global economy only narrowly avoided sinking into an economic depression largely driven by a banking and credit crisis. However, the global economic shocks of the last 2 years continue to create tidal waves on the shores of the world’s economies. Whilst some economies have hardly missed a beat others, particularly in the developed world, are finding navigation challenging as they face up to the costs of high levels of personal and national debt.

lighthouseCommodity and stock prices have recovered sharply but credit rating agencies have downgraded corporate and sovereign debt where financial leadership appears to be absent.  It would seem reasonable to expect further shocks as individuals, banks and nations readjust to the new economic realities. Whilst an economic apocalypse may have been avoided many business leaders are still navigating in uncharted waters. In recent months the Euro zone economies have felt the impact and banks are facing the prospect of tighter regulation and possible statutory break-up.

This was the economic backdrop to a workshop on “Leading in Uncharted Territory” hosted by Value Partnership at Shakespeare’s Globe theatre. Over 25 business leaders and senior executives from some of the world’s largest companies took part in the workshop.

The Adaptive Leadership Requirement
In a thought-provoking opening session by Professor Colin Carnall from CASS Business School (City University London), he observed that whilst the debt crisis represented a significant challenge to business leaders it was only one of the factors shaping the competitive, social and economic climate. He also reflected on: 

  • Eastern migration of economic power
  • Economic migration, off-shoring/re-shoring of industries
  • Debt levels and attitudes to personal insolvency
  • More formal and litigious business relationships
  • Impact of virtual communication on learning and buyer behaviour
  • Continuing shift in the personal psychological contracts with organisations
  • Green agenda and the sustainability of economic activity

Leadership is clearly critical to success in this environment but there is a requirement for a more adaptive leadership style. When change requires you to challenge people's familiar reality, it can be difficult work in challenging conflict situations. Whatever the context, whether in the private or the public sector, many will feel threatened as you push through major changes. As a leader, you need to find a way to make it work. Ron Heifetz first defined this problem with his distinctive theory of 'adaptive leadership'.

Adaptive leadership is required in adaptive contexts – situations which demand a response outside your current ‘repertoire’. It is about being able to take people outside their comfort zones to find new ways to assess and address the toughest challenges. In particular it requires leaders to focus upon: 

  • Clarity of  purpose
  • Building an engaging climate
  • Accountability
  • An outside-in focus
  • Collective will

Four Enduring Questions
Given the context, what is happening in your business environment and what kind of capabilities are required to succeed? Research based theory is one thing but what is actually being experienced by business leaders is another.

During the event the participants formed 5 working groups to review a case study company from within each group. They were challenged to ask four key questions: 

  1. What are the significant challenges your business is facing – now and in the future?
  2. What strategic responses are critical to success?
  3. What new capabilities must be built to deliver each of these new responses?
  4. How do you go about successfully building this capability across the organisation?

In guiding each group through these enduring questions we challenged them to avoid generalising about either the business situation or the critical responses. Success in this type of thinking comes from a clear line of sight between the business challenges they face, the specific strategic responses that are required, the capabilities required to successfully deliver and the actions that will build these capabilities. An example follows: 

Business Challenges:

  • Radical technological innovation challenges the core business model

Strategic Priorities:

  • Investing and partnering in technology development

Capabilities Required:

  • Tracking, acquiring and investing in new technology/partnerships
  • Develop change leadership capability for a ‘game-changing’ scenario

 Road Map:

  • Creating cross-functional team to look at new technologies/radical scenarios
  • Adaptive leadership development

Lessons
So what were the leadership lessons which the groups drew from the event and their work on the live business case studies?compass
 

Line of sight – having clarity about the purpose and direction of your business becomes even more important

Simplicity – focus upon those few things that are critical to success and stop doing those things that are not

Courage – leadership in uncharted territoryrequires leaders to help the whole organisation to understand the realities of the environment and make choices by ‘bringing the outside in’

Space – ensuring that leaders and leadership teams take regular and planned time out from a demanding operational climate to focus on direction and purpose

Engage and mobilise – building an engaging climate and investing in those capabilities that are clearly linked to purpose and direction 

Future Thought Leadership Events
Following the event we surveyed those that took part about what they got from the event and how we should shape future events. This is what they said: 

  • What I learnt from the participants is better than any leadership course that I have attended.“
  • Hearing about the challenges faced by other companies helped me realise that my company is not alone in this area.“
  • This event allowed me to think about the bigger picture and see the world not just through my own business's perspective.”
  • “The event provided a thought provoking introduction, a practical business example, case study in table groups and some networking including the excellent lunch."
  • “The opportunity to discuss real issues with other professionals.“

Due to popular request a further Leading in Uncharted Territory workshop is planned at the Globe Theatre in London on Friday 17th September 2010.  

Geoff Rogers
Director, Value Partnership
April 2010

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