What makes a good leader? This is a question I routinely face as I identify candidates for board positions and to which there is no single, or simple, answer. Different businesses, at different times, need different personalities, with different strengths and skills.
Executive teams need to build businesses that deliver sustainable shareholder and stakeholder value over the long term. While the profiles, personalities and the business sectors may differ, there are some common traits to successful leaders. In my experience the following three characteristics have a fundamental impact on good leadership. In addition, these are underpinned by a single reality: everyone is in the reputation business.
- First: Successful leaders have a superior understanding of their environment and their customer. What is inescapable is the need for the C-suite to continue to enhance its understanding of non-financial risk, notably emerging sociopolitical trends, regulation and risk to a company and brand reputation. Corporate history is marked by powerful examples of CEOs and companies that have been humbled as a result of misreading, or worse ignoring, public and political moods - BP comes to mind. Gary Burnison, CEO of Korn/Ferry, has highlighted the leadership dividend from the skill of anticipation.
The most successful leaders will not simply manage non-financial issues and trends, but leverage them to provide competitive advantages. This is what TLG refers to as taking a Thought Leadership position, which results in attitudinal change and behavioural change among a key audience, from a supplier, to investors, to consumers, thereby locking in competitive advantage. Key to this is clarity of vision, providing colleagues and customers with a sense of security about what the organisation stands for, why it exists and how it will respond to a challenge or crisis.
Business - arguably like governments - can do little to change macro socioeconomic factors. Recent events have compounded this reality. But this does not mean political or business leaders need to be at the mercy of events. While you can't change your operating environment, you can change what your company or administration does and take a lead to build a stronger relationship with key audiences, investors, consumers or voters.
- Second: The most successful leaders challenge themselves even when competitors - and colleagues - fail to do so. So if the first point is about 'being the change', this point is about 'being the competition'. This trait is most readily associated with owner-entrepreneurs, such as Charles Dunstone in this country and Jeff Bezos and the late Steve Jobs in the US. However, Sir Terry Leahy is a great example of being a Thought Leader who challenged his own business and sector and transformed both. When organisations stop behaving like Thought Leaders, their brand reputation and market leadership is in jeopardy. A leader always needs to be thinking ahead - anticipating the opportunity as well as potential threats and disruptions.
- Third: A great leader doesn't need a crisis to define them - however, they will not only be able to turn a crisis to their advantage, but will also be able to use the crisis for change and good. Crisis leads to panic or a renewed sense of urgency. It is the quality of the leadership that makes the difference.
In summary, a CEO and business leader is the 'what' and 'how' of business. 'What' means setting forth a purpose, a strategy, picking people to execute it, monitoring progress, inspiring the team and rewarding and celebrating along the way. The 'how' means navigating the course, communicating, listening, learning, leading and, most importantly, anticipating.
Thought Leadership credentials
- Korn/Ferry is the largest executive search firm in the world. The company was founded in 1969 in Los Angeles, and now has almost 80 offices in 40 countries.
- In 2008 the firm founded The Korn/Ferry Institute, a think-tank that conducts surveys and publishes research on talent development and human capital issues. The institute's website hosts hundreds of videos, articles, podcasts and books on Thought Leadership.