Want to lead? Then tear up the rulebook Nik Gowing and Chris Langdon reveal disturbing details from their research project into how people at the top struggle to clear a path in a digital age which throws up surprises
12 | the world today | june & july 2016 the world today | june & july 2016 | 13 The leadership challenge
In the United Kingdom a majority could insiders whose careers would suffer by about their difficulties in grappling with an vote in June to leave the European Union. admitting failure is almost unheard of. unpredictable and fast-changing world. In the United States, the presumptive Only when he stepped down after 11 years Our interim report, Thinking the Unthink- Republican presidential candidate is Don- at the top did Sir Nicholas Macpherson, able – the New Imperative for Leadership in ald Trump. the British Treasury’s most senior civil the Digital Age, is based on off-the-record Britain out of the EU? President Trump? servant, reveal the ‘monumental, collec- conversations with more than 60 highest-
To express incredulity is not a political tive intellectual error’ by him and col- level executives from business and finance, BREWSTER SAM BY ILLUSTRATION judgment. Until a few weeks ago, what leagues in Britain and the United States government, the military and the humani- many viewed as outlandish ‘unthinkables’ before the 2008 financial crisis. In an inter- tarian sector, plus members of the coming were not even being considered or investi- view in April 2016, he said that they ‘failed generation of leaders, the millennials. gated as part of corporate or political risk to see the crisis coming’ and ‘failed to History is marked by the impact of the assessments. Now they have to be. see the build-up of risk’. It was further unexpected. The financial sector faced a The challenge from such unforeseen corroboration of what Andy Haldane, huge shock in 2008. Were the ‘unthinka- developments fits a new and threatening chief economist at the Bank of England, bles’ that unfolded globally from early 2014 pattern for leaders at the highest levels. described to us as a ‘disaster in myopia’. of a quantitatively different scale? Little over a year ago, even the possibility Martin Taylor, co-founder of the Nevsky Several unexpected events in early 2014 of a massive humanitarian surge to chal- Capital hedge fund, announced to inves- had provoked the question. Why had so lenge the EU’s borders and Europe’s gov- tors in December that he was returning many at the very highest levels in western erning elite seemed inconceivable. their money because the new environment leadership roles failed to anticipate Presi- The EU was focusing on saving the euro. ruled out defensible risk assessment. ‘The dent Putin’s seizing of Crimea from Political leaders and their officials dis- laws of economics will never be repealed Ukraine, or the precipitous 60 per cent missed warnings from the United Nations – but for now they are suspended and may fall in oil prices, or the brutal rise of High Commissioner for Refugees and the be for some time.’ so-called Islamic State with the capacity to International Organization for Migration These are not headline-grabbing excep- seize Mosul in northern Iraq? Why had the as too extreme to be taken seriously. tions. They confirm a direction of travel World Health Organization rejected warn- The highest levels of leadership must with implications that are deeply trou- ings of the lethal threat of Ebola in West now assume that a rapid-fire succession of bling. Behind closed doors, executive lead- Africa? And why did Sony Pictures leave abnormal, disruptive events is the new ership at the highest levels faces new vul- itself so vulnerable to a damaging cyber- reality. Yet the scale and frequency of pol- nerabilities that almost none is willing to attack? icy failings shows that the established ways admit to publicly. But they are greater than With anonymity guaranteed, the leaders of major companies, civil servants or min- at any time in recent history. talked frankly. They revealed often stark isterial private offices are no longer config- Inspired by the Churchill 21st Century discomfort that for career and reputa- ured appropriately. Many at the top level Global Leaders Programme, set up to mark tional reasons they would never air in the are in denial. 50 years since Sir Winston’s death, we presence of their immediate peers or at a Public confirmation of this from the wanted to hear from today’s top leaders wider gathering. They confirmed over-
Off the record ... quotes from Thinking the Unthinkable
Multiple pressures Institutional conformity Wilful blindness ‘There isn’t time to ‘There is in the ‘The wilful blindness think the thinkable, Foreign Office challenge is that never mind the a particularly we try to explain unthinkable. strong tendency to away things that are You are reacting to analyse a particular inconvenient truths’ events and making problem in a decisions on the particular way. basis of imperfect And to not information’ encourage people to challenge it’
14 | the world today | june & july 2016 The leadership challenge
whelmingly that the answer is ‘yes’: they more accurately, they were unpalatable for about: were being caught off guard and their skills leaders. They and those who work for them l Groupthink/wilful blindness and organizations tested to the limit. are often in denial. Data and signals are l Being overwhelmed by multiple intense Almost all agreed that mindsets, behav- usually available. Yet for a variety of inter- pressures iour and systems are rarely adequately nal reasons those signs – and a frank l Cognitive overload and dissonance configured to handle the ‘new normal’. One assessment of what they suggest – are l Institutional conformity l ILLUSTRATION BY SAM BREWSTER SAM BY ILLUSTRATION top European diplomat, for example, con- often marginalized or buried by systems Risk aversion ceded how assumptions of relative policy that discourage the airing of unwelcome l Fear of making ‘career-limiting moves’ ‘tranquillity’ had been ‘shattered’ and assessments. l Reactionary mindsets officials were now struggling to catch up. As one senior executive put it, there is a l Denial ‘Some CEOs are scared stiff,’ confided fear among staff that bosses will ‘chop the The findings prompt the inevitable ques- Paul Polman, Unilever’s chief executive, legs off’ those whose advice might seem to tion asked by every executive leader: so the sole corporate leader willing to speak be off the wall or ‘wacky’. As a result, what are the solutions? There are plenty. on the record. Reflecting the private con- executives or public servants who are con- The trouble is that, as leaders confided to cerns of many, he said organizations cre- cerned about their career prospects feel us, many ‘solutions’ that sound good in ated barriers for their leaders to hide they must conform. This fear of speaking theory often fail for one of two reasons. behind. ‘The more they get paid, the less out and making a ‘career-limiting move’ Either they wither and die because of con- risk they take because it’s very comforta- means that many organizations are aff- formist executive resistance, or they are ble. And it’s better to hang in there … than licted by a ‘frozen middle’ that ‘lacks mus- actively obstructed by those at the top for take a lot of risk.’ His conclusion: ‘We must cle’. This is at a time when the new un- being too radical. be disruptive in taking risks and challeng- thinkables require the opposite – namely Candidly, almost all interviewees con- ing the status quo.’ assertiveness and being proactive. firmed that yet another change to organi- Embedded in this core leadership chal- This explains the ‘wilful blindness’ con- zational systems and structures is not the lenge is an inherent contradiction. How do ceded by leaders as a key reason for their answer. Most accept that the existing current leaders direct a company or gov- failure to address possible but undesirable imperatives for institutional conformity ernment department through a period of outcomes. In itself groupthink is not new – often not readily acknowledged openly fundamental change that questions the or unknown. But of concern is that many but which got them to the top – are getting very conformity which qualified them for leaders acknowledged this as a critical in the way. the top? It is that same conformity which obstacle or blocker to getting updated on The issues are therefore about changing blocks the kind of systemic and behaviour- the unthinkables they should really know culture, behaviour and mindsets. The al changes that are so urgently required. about. And in too many cases organiza- International Committee of the Red Cross Why do leaderships remain reluctant to tional structures and recruitment polices decided in 2015 to confront unchanging conceive of events that then happen? We are reinforcing the problem. mindsets internally. Time to Let Go, a conclude that frequently this was not just From our interviews we identified nine report from the Overseas Development because developments were unthinkable: reasons why unthinkables are not thought Institute, urges such changes across the
Off the record ... quotes from Thinking the Unthinkable
Groupthink Risk aversion Career-limiting moves ‘I hate to mention ‘You have to find ‘People say to friends, the word diversity, your inner compass Oh that will be a I almost hate the on what you feel CLM. I could do word. But it is true strongly about. If that, but it would that balance in that is so important, be a CLM’ any organization, you’ll be able to in any structure, is take more risks. good. Groupthink We have become is a very dangerous risk adverse’ phenomenon’
the world today | june & july 2016 | 15 The leadership challenge
humanitarian sector. Helping launch the into the ‘C-suite’ culture. ‘There are no chief executive of Thomas Cook, now in report, Yves Daccord , director-general of solutions, no magic Five Steps,’ said Patri- charge of the Internet of Things at IBM. the ICRC, put the challenge with disarm- cia Seemann, chief executive of the 3am Can it be done? The leader of a major ing simplicity: ‘The new thing is that peo- group which advises corporate leaders on international organization gave an insight ple behave differently.’ their most intractable problems. A key first into the challenge to modify both institu- So leaders and their organizations must step is awareness that things need to tional culture and executive mindsets. In also change. Easy to say, but more evidence change, and the old conformist ways that 2015, he told us that he was working to is needed of what works and what is pos- largely got leaders to the top will no longer break down silos and address vested inter- sible. So this will be the next stage for work in the unstable new environment. ests. ‘I’m trying to see where in my organ- research. For that we invite new insights A common theme is to diversify recruit- ization are the places – it could be very and feedback from leaders and those who ment in terms of age, gender and skills. small places – where adaptation is happen- work from them via our website. One chairwoman said that the one female ing more quickly,’ he said. Already, however, it is clear that a core non-executive director on her board Interviewed again this year, he suggest- threat and reality check on the new chal- always has a different perspective. ‘Is it ed that there would be no handbrake turn lenge from unthinkables comes from the because she’s a woman? Is it because she’s in culture. ‘Even over the last eight next generation of millennials. It is readily American? Is it because she’s from the IT months, I would argue that I have seen assumed that they are executives-in-wait- world? I don’t know. But she has a different some change in the practice of leadership. ing who will be prepared to take the execu- set of views.’ I’m not saying improvements.’ tive suite. But our research shows the Darshita Gillies, a Mumbai-born millen- What is the big conclusion? Tony Man- reality is far from that. Many are not, as nial who is a chartered accountant turned waring, of the Chartered Institute for 29-year-old Aniket Shah explains (see corporate adviser, said that a superficial Management Accountants, which part- Q&A opposite). Where will the leaders application of diversity – the arrival of nered our research, said: ‘Now is the time capable of challenging corporate myopia women on corporate boards – was not of inflection; business as usual isn’t the come from? enough. ‘I feel that we do need to have path to the future; and leadership as usual Corporate leaders told us they realize young people in the boardroom, so that therefore needs to be questioned.’ that they must engage urgently with the they can become part of that future.’ concerns of the millennials, those born And this is sharpened considerably by Nik Gowing is former international news between 1980 and 2000. That requires a the challenges from artificial intelligence, broadcaster at the BBC and ITN. He is far greater focus on purpose and value. data analytics and robotics. now a Visiting Professor at King’s College How will that be done? Through a culture ‘The whole scale of technology disrup- London. Chris Langdon is head of of greater adaptive leadership that builds tion means that we have a bigger gap ‘Reconciliation through Film’, a non-profit resilient organizations. Offering contrarian between the people currently running start-up. He is the former managing advice must no longer be a career killer but businesses in the C-suite and those who director of the Oxford Research Group. a career enhancer. Challenge, innovation will inherit the responsibility to run those Full interim report available at: and collaboration have to be embedded businesses,’ said Harriet Green, the former www.thinkunthinkable.org/report
Off the record ... quotes from Thinking the Unthinkable
Reactionary mindsets Denial Cognitive dissonance ‘They get trapped in ‘What we found is ‘I would argue that a mindset … there’s that our companies none of us could an explanation for are actually get through the this, which is that structured in a way day without a large our mindset of that doesn’t unlock dose of cognitive what’s possible creativity and dissonance’ tends to be related diversity of to what happened thinking’ in the past’
16 | the world today | june & july 2016