12 MINS READ
Insights
Highlights
- Thinking in terms of digital ecosystems, supporting remote work, and welcoming new players to the C-suite require many executives to make big changes in their long-standing beliefs about leadership.
- These new mindsets also demand that executive team members to challenge each other’s thinking, yet eventually unite on a coherent plan.
- The last decade’s digital transformations at Apple, Target, and other companies show what happens when leadership teams work effectively in highly ambiguous times.
In this article
Introduction
We have explained in this issue of TCS Perspectives that every large global company faces several mandates including: rethinking strategic opportunities in terms of cross-industry digital ecosystems; using their core purpose for customers to hone that strategy; increasing the productivity and the loyalty of at-home workers; and welcoming new roles in the C-suite.
These mandates will challenge the long-standing attitudes and beliefs of many executives. They may appear especially implausible to those who have carved out highly successful careers and yet who now find themselves in businesses that are about to be transformed by the digital revolution. But as famous Irish playwright George Bernard Shaw once said, “Progress is impossible without change, and those who cannot change their minds cannot change anything.”
This article is about why it’s an opportune time for leaders to rethink many of the rules of business we’ve learned in our jobs and at school. In the paragraphs below, I’ll explain the shifts in leaders’ mindsets that I believe are necessary to embrace the mandates we’ve laid out in this issue of Perspectives. I’ll then discuss why the members of a leadership team must be able to merge their mindsets together to produce a company strategy that is coherent and cogent. To describe the kind of collective thinking that I believe every executive team must have to move their company ahead capably and confidently, I will use the term “mind-meld,” a phrase that many science fiction fans will be well aware of.
Preeminent business scholar Peter Drucker once wrote, “Management is doing things right; leadership is doing the right things.” In this decade, doing the right things will be more difficult, and more important, than ever. Big companies will make multi-billion dollar bets on their future. They will make large acquisitions and divestitures, new business launches and major product innovations and extensive implementations of digitally streamlined marketing, sales, production, distribution and service processes. The people who run these companies will have to work exceedingly well together to direct their companies to do more of the “right things” and less of the “wrong things.”
Importantly, I’ll also put these views about leadership mindsets in the larger framework you’ve seen in this edition (see Figure 1). After identifying their company’s place in its digital ecosystem and where it will generate customer value, leaders must be on the same page about the exact opportunities they see and how to seize them. As Brian Cornell, the CEO who has orchestrated retail giant Target Corp.’s turnaround since 2014, puts it: “It’s easy to design a strategy. Those PowerPoint presentations can look great in a boardroom. But it all comes down to execution and outcomes. Ultimately, those plans have to be owned by the team.”1
The connection between a shift in leadership mindset and bringing a company's strategy and purpose to life.
I fully realize that “leadership mindsets” may not be at the top of your priority list. It’s natural to view it as part of the “soft” and less-essential work of strategic transformation. The “hard” and fundamental work, this thinking goes, is developing the strategy itself.
Of course, a clear and sound strategy is crucial. However, the individual mind shifts and group dynamics necessary for a leadership team to create a winning strategy and fully get it are just as vital. These “soft” issues may not show up at all in the project plan for developing a company’s strategy. But they need to be articulated and attended to, ideally before the strategic planning begins (see Figure 2).
A leadership meeting of minds is key to creating a winning strategy.
New Mandates Require New Mindsets
One by one, let’s review some of the strategic mandates we’ve discussed in the articles in this Perspectives, and the associated changes in leadership thinking that I believe are required to fully get behind those mandates. Here are three of the biggest one:
That, in turn, demands leaders to abandon long-held beliefs about such matters as whether to work with competitors, who the biggest competitors are and will be, how much business partners can be trusted and what customers value most. This is especially important in industries where the core products can be entirely digital. Banking is a great example. JPMorgan is the largest U.S. bank by revenue.2 CEO Jamie Dimon believes non-bank digital payment firms represent the greatest threat to banks like his. “You have PayPal, Venmo, Alipay and more,” he told an interviewer in 2018. “These companies are doing a good job of embedding basic banking services in [consumer] chats, their social [media posts], their shopping experience.”3 Perhaps the most radical mindset change required to think in ecosystem terms is using the lens of how customers accomplish their end-to-end process rather than the lens of how a company has historically solved one piece of that process. Jeff Bezos of Amazon has described this as “working backwards from customer needs.”4 For example, if Amazon had defined itself early as an online bookstore, it wouldn’t have moved into the other e-commerce categories that have turned it into a $140 billion e-commerce machine in 2019.5 Bezos believed consumers would want to order many other products with the click of a mouse, and he was right. Similarly, Amazon’s push into cloud computing resulted by thinking more broadly about how its technology infrastructure could solve customer problems requiring immense amounts of computing power.
This is being done for health and safety reasons today—to reduce the chances of employees falling victim to COVID-19. But for many organizations, allowing employees to work from home will rub up against some leaders’ beliefs that they need to see people working to be assured that they’re working—the old “face time at the office” requirement. When he was alive, ex-Apple CEO Steve Jobs talked about the need for “creative collisions” to happen at company offices—for employees across businesses and functions to interact every day to dream up new ideas. (Jobs’ desire to force such conversations on the fly and in meetings drove much of the design of Apple’s $5 billion headquarters campus last decade.6). However, such a mindset today would oppose work-from-anywhere policies that could continue after the pandemic ends. Company leaders must continue to reimagine ways to achieve such creative collaboration even when employees are not working from company offices all the time.
Leadership team members can get territorial when they’re measured largely on the performance of their business function that they oversee. If new leadership team roles are created—chief digital officer, chief data and analytics officer, chief customer experience officer and so on—those new executives could be perceived by the previous C-suite members as competing for budget and assets. A highly successful chief marketing officer could question whether a new chief customer experience officer should report to her (the CMO) or the opposite. And these arguments may not only be territorial; they may be philosophical. Is providing a compelling total experience to customers who aren’t highly profitable or loyal more important than having great marketing to bring customers (new and old) continually into the fold? In other words, turf battles can be viewpoint battles.
Company leaders must continue to reimagine ways to achieve such creative collaboration even when employees are not working from company offices all the time.
Figure 3: Linking Mandates to Mindsets and Mind-Melds
Changing how a leadership team thinks about certain key mandates and how to resolve them can be crucial to creating a sound strategy. But skepticism often goes underground—i.e., executives who may not voice their profound disagreements in meetings. Nonetheless, they could affect how vigorously team members get behind a new strategy.
Mind-Meld: Getting Leaders to Create and Back a Coherent Plan
Even if everyone on the top leadership team embraces the company’s strategy at a high level, that may not be enough. Each may have his or her own interpretation of the strategy and how to execute it. That’s why it’s crucial that the collective mindset of the top team congeal at a deeper level around where the company must go and how to do it.
There are numerous historical examples of leaders of companies and nations who realized the importance of creating a collective mindset around strategic direction. A term that comes to mind for me is “mind-meld.” Fans of the science fiction TV series “Star Trek” will know exactly what this means.7 But for those of you who weren’t fans, the term referred to a technique by one of its main characters (the immortal Leonard Nimoy’s Spock character) to share knowledge with others via telepathy. The Oxford dictionary defines it as “a (supposed) technique for the psychic fusion of two or more minds, permitting unrestricted communication or deep understanding.” The dictionary then references “Star Trek” as the place where the term originated.
The mind-meld I’m talking about here is the fusion of the thinking of a leadership team on the company’s strategy for this digital decade. Judging from political and business history, that mind-meld will only happen if disparate views are permitted to be fully voiced, respectfully examined, debated rigorously and knitted together coherently.
The leadership team dynamic to create here is one of “What is the truth?” vs. “Why I’m right.” That requires constructive disobedience to be permitted in leadership meetings—in this case, disobedience being about voicing a different opinion. This, of course, is not easy—especially for everyone who reports to the CEO. But when a CEO intentionally makes it permissible for team members to dissent, it can go a long way.
Take the example of Hubert Joly, the CEO who turned Best Buy around over the last decade. Three months after he arrived on the job in 2012, he asked his direct reports to give feedback on his management style to his personal coach. After hearing the input, Joly then thanked his team and told them about the leadership weaknesses he would work on—with their active help. “This action helped to create a company culture in which it felt normal to have weaknesses, recognize them and work together to alleviate them,” he said in a 2019 publication interview, the year he stepped down.8
Thus, Joly began his turnaround tenure at Best Buy by setting a tone in his leadership team of questioning authority—especially his. That tone proved to be instrumental. Over the next seven years under Joly’s leadership, Best Buy turned its losses into profits and increased shareholder returns by 335%, triple the average for the S&P 500.9
When so much is on the line, these conversations must be honest and far-ranging. Political history (especially wars) illustrates this well. U.S. President Abraham Lincoln assembled an often fractious and contentious leadership team to win the Civil War and end slavery in the 1860s. Lincoln was able to fuse together disparate and often angrily expressed views from what Doris Kearns Goodwin called his “team of rivals.”
They were not ordinary rivals. Three of them ran against Lincoln in the 1860 presidential race. But they later proved to be crucial parts of his leadership team in winning the Civil War. In describing the deliberations in 1862 that led to the Emancipation Proclamation issued in the middle of the war, Goodwin wrote: “Though Lincoln had signaled before reading the proclamation that his mind was already made up, he welcomed reactions from his cabinet … whether for or against. … He had deliberately built a team of men who represented major geographical, political, and ideological factions of the Union. … He had welcomed the wide range of opinions they provided as he turned the subject over in his mind, debating ‘first the one side and then the other of every question arising’ until, through hard mental work, his own position had emerged.”10
A leadership team with acquiescent members will not do its company any favors. In an environment such as today’s when so much is up in the air and up for grabs by new and old competitors, a team with vocal dissenters who nonetheless work productively and respectfully to forge a far-better-thought-through strategy will be elemental to success.
The Power of a Unified Force for Digital Transformation
When a leadership team is united on where the organization must go in an-ever complex and digital world, it becomes a powerful force. Against competitors whose executives are not fully in synch or are greatly out of synch, the unified team has a far better chance of winning.
That doesn’t mean they will always agree on the destination and how to get there. In fact, if they’re not debating these issues on an ongoing basis, they aren’t likely holding sufficiently honest conversations.
That, in business and war, can lead to disaster. As Winston Churchill once said, “When there is no enemy within, the enemies outside cannot hurt you.”
As our new decade unfolds and digital technology increasingly redefines what businesses a company can be in, what it can sell and how it can generate demand and supply, leadership teams must be unified on exactly where their organizations are going and how they’re going to get there. I’m convinced that these executives will drive organizations that prosper in a decade of digital ecosystems.
When a leadership team is united on where the organization must go in an-ever complex and digital world, it becomes a powerful force.
CITATIONS
1 Fortune magazine interview, published Aug. 2, 2017. Accessed here: https://fortune.com/2017/08/02/briancornell-ceo-target-leadership/
2 According to Fortune magazine. https://fortune.com/company/jpmorgan-chase/fortune500/
3 Interview with Jamie Dimon in Harvard Business Review, published in the July/August 2018 issue. https://hbr.org/2018/07/managers-dont-have-all-the-answers
4 In Bezos’ 2008 letter to shareholders. Accessed here: https://www.sec.gov/Archives/edgar/data/1018724/000119312517120198/d373368dex991.htm
5 Digital Commerce360 page, Jan. 30. 2020. Article accessed here: https://www.digitalcommerce360.com/2020/01/30/amazons-2019-sales-rise-20-5/
6 CNBC, Oct. 9, 2017. Article accessed here: https://www.cnbc.com/2017/10/09/how-much-every-inch-of-applesnew-5-billion-campus-cost-to-build.html
7 Star Trek web page. https://www.startrek.com/database_article/mind-meld-vulcan
8 From a Q&A that Joly conducted with the alumni site for the business school HEC Paris, July 18, 2019. https://hecstories.fr/en/hubert-joly-best-buy-managing-means-creating-meaning/
9 Best Buy web page, June 10, 2019. https://corporate.bestbuy.com/hubert-joly-leaves-a-lasting-legacy-as-bestbuy-ceo/
10 Doris Kearns Goodwin, Leadership in Turbulent Times (New York: Simon & Schuster, 2018). See this September-October 2018 excerpt in Harvard Business Review: https://hbr.org/2018/09/lincoln-and-the-art-of-transformativeleadership.
