Pillar Trends, Part 2
Learn about the author. Kelvin is the Founder of MontaRosa. He has spent the last 20 years in executive search, most recently managing the global private equity practice at another leading executive search firm. Read more from this authorI’m pleased to continue discussing the “Pillar Trends” of successful leadership we started a couple blogs ago. Eric McNulty, a noted leadership strategist, joins me once again.
Kelvin: As I’ve been thinking more about the Pillar Trends and the implications for global leadership. If you are right, Eric, the challenges of leading corporations are going to not be so much different as more complex and multi-dimensional. China, for example, may grow robustly at the same time that the United States lingers in a recession because, at least on a consumption basis, there is still plenty of room for growth in China, while the U. S. is a much more mature market.
Eric: Exactly. Right now you hear pundits talking a lot about the thrift paradox. People in the U.S. have begun to save more, trying to recoup some of what they’ve lost in the recent downturn. Though a perfectly logical move for an individual or family, at the macro level it becomes difficult to reignite consumer spending, which of course is such a large part of the U.S. economy. China is in the exact opposite situation: people already save quite a large percentage of what they make. But as China — or the other BRIC countries, for that matter — become consumption as much as production markets, they will become less dependent on spending in the U.S. and Europe. They’ll already have a growth engine at home.
I think that companies have seen themselves as primarily in one of three modes: growth, cost-cutting, or turnaround. You know more about this than I do, Kelvin, but from what I read it seems that boards say “Get me a Mark Hurd” if they are looking for a CEO while in cost-cutting mode and “Get me a Meg Whitman” if they are in growth mode. You get the idea.
Kelvin: That’s right in very general terms. As I look at these challenges, I think that global companies are going to have to find people who can think simultaneously about all three as they focus their attention on global issues. But there’s no reason, at least conceptually, that the skills would be mutually exclusive. In practice, however, individuals tend to feel a lot more comfortable playing either offense or defense. Risk takers prefer offense, for example. Companies I’ve done CEO searches for tend to be moving from one mode to another and express a preference for certain skill sets that drives the search. When Chuck Townsend was named to replace Steve Florio at Condè Nast — a search I was not involved in but a company that’s much in the news these days — the board wanted someone who was less flash and more willing to rein in spending on the editorial side and change the culture from vision-at-any-cost to vision that includes a firm grasp of the cost column in the ledger. Can Townsend lead a cost-conscious retrenchment — a turnaround, even, in some people’s eyes — in the U.S. while also aggressively expanding in growth markets? We’ll have to see but that’s the kind of challenge I see CEOs facing ahead.
Eric: One of the implications I’ve projected from looking at the Pillar Trends is a decline in hyper-specialization and a return to the generalist model among corporate leaders. I see issues like demographic shifts and climate change as requiring innovative, broad thinkers at the top. Do you think that’s accurate?
Kelvin: I don’t know if it is generalist so much as multi-specialist. But perhaps that’s more picking with the words than the concept. I agree that executives are going to need to be broad thinkers and certainly innovative — not just business people with an MBA and years of success with a firm but be well-versed in both the physical and natural sciences, as well as international affairs, and even the arts so that they can draw upon a wide range of knowledge and expertise to solve problems and lead their firms forward.
Are the skills needed for the corner office evolving? If so, how? I’m interested in hearing other views.
Kelvin
photo credit: Steve Parker
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Kelvin, I’ve been marinating on this since our last discussion. I want back to a fabulous article by Stewart Brand on urbanization (http://www.gbn.com/consulting/article_details.php?id=42&breadcrumb=consulting). In it he talks about the informal leaders in squatter settlements who are key to unlocking the commerce potential of these places. Can you imagine the typical CEO, accustomed to having a phalanx of lawyers, financial experts, marketing whizzes, etc. advize on every major decision, coming to terms with Julio or Abdul, the entrepreneur in the third shack on the left — with no credit references, no formal distribution network, no interest in contracts? They wouldn’t have a clue.
The people at Danone Communities have done some interesting work in this space in Bangladesh but, in general, it’s the very definition of an asymetrical challenge and needs a different set of skills.