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Diversity: A Must-Have, In Good Times and Bad

A successful workplace must feature a diverse set of people empowered to solve their sector’s most challenging problems. More than a “nice-to-have,” diversity is a “must-have” for all sectors and industries committed to progress.
This holds true in both good times and bad. In fact, when an unexpected crisis …

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Marillyn A. Hewson, 2018 CEO of The Year, Steps Aside at Lockheed Martin

Marillyn Hewson at the 2018 CEO of the Year Event, at the United Nations in New York City. Photo credit: Ben Hider
Defense giant Lockheed Martin announced this morning that Marillyn A. Hewson, its longtime CEO, would turn over the top job to board member and American Tower CEO James Taiclet …

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How to Spot an Incompetent Leader

Executive Summary
If we want less incompetent men in leadership roles, those responsible for judging candidates need to improve their ability to distinguish between confidence and competence. The good news is that, for some time now, we have had at our disposal scientifically valid assessments to predict and avoid managerial …

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The Key to Inclusive Leadership

Executive Summary

Inclusive leadership is emerging as a unique and critical capability helping organisations adapt to diverse customers, markets, ideas and talent. For those working around a leader, such as a manager, direct report or peer, the single most important trait generating a sense of inclusiveness is a leader’s visible awareness of bias. But to fully capitalize on their cognizance of bias, leaders also must express both humility and empathy. This article describes organizational practices that can help leaders become more inclusive and enhance the performance of their teams.

Richard Drury/Getty Images

What makes people feel included in organizations? Or feel that they are treated fairly and respectfully, are valued and belong? Many things of course, including an organization’s mission, policies, and practices, as well as co-worker behaviors.

But mostly it comes down to leaders. We find that what leaders say and do makes up to a 70% difference as to whether an individual reports feeling included. And this really matters because the more people feel included, the more they speak up, go the extra mile, and collaborate — all of which ultimately lifts organizational performance.

Given this formula, inclusive leadership is emerging as a unique and critical capability helping organizations adapt to diverse customers, markets, ideas and talent. Our previous research found that inclusive leaders share a cluster of six signature traits:

  1. Visible commitment: They articulate authentic commitment to diversity, challenge the status quo, hold others accountable, and make diversity and inclusion a personal priority.
  2. Humility: They are modest about capabilities, admit mistakes, and create the space for others to contribute.
  3. Awareness of bias: They show awareness of personal blind spots, as well as flaws in the system, and work hard to ensure a meritocracy.
  4. Curiosity about others: They demonstrate an open mindset and deep curiosity about others, listen without judgment, and seek with empathy to understand those around them.
  5. Cultural intelligence: They are attentive to others’ cultures and adapt as required.
  6. Effective collaboration: They empower others, pay attention to diversity of thinking and psychological safety, and focus on team cohesion.

This sounds like a laundry list, so it’s not surprising that we are regularly asked which is the most important trait. The answer depends on who is asking. If it’s the leader, commitment is the most critical, because without it, the other five attributes can’t be fully developed.

For those working around a leader, such as a manager, direct report or peer, the single most important trait generating a sense of inclusiveness is a leader’s visible awareness of bias. To underscore this insight: Our analysis of the 360-degree Inclusive Leadership Assessments (ILA) of more than 400 leaders made by almost 4,000 raters reveals that while all six traits are important and operate as a cluster, a leader’s awareness of personal and organizational biases is the number one factor that raters care most about.

Comments from raters on the ILA tell us that they particularly notice, for example, when a leader “constantly challenges (their) own bias and encourages others to be aware of their pre-conceived leanings” or when a leader seeks insight into their biases by, for example, “[Asking] others to test whether their thought process is biased in any way.”

But this is not all. Raters are not looking for a simple acknowledgment of bias, tinged with a fatalistic sense that little can be done about it. They care about awareness of bias coupled with two additional behaviors:

  • Humility: Raters want to see that their leaders are determined to address their biases. Fatalism looks like “Hey, I know I have this prejudice, but whatever, I am what I am.” In contrast, leaders who are humble acknowledge their vulnerability to bias and ask for feedback on their blind spots and habits.For example, one direct report told us that their leader “is very open and vulnerable about her weaknesses, which she mentions when we undergo team development workshops. She shares her leadership assessments openly with the team and often asks for feedback and help to improve.” Our research shows that when cognizance of bias is combined with high levels of humility it can increase raters’ feelings of inclusion by up to 25%.
  • Empathy and perspective taking: Raters aren’t looking for their leaders to try to understand their viewpoint and experience as a dry intellectual exercise, but empathically.  That means understanding others deeply and leaving them feeling heard.  For example, one rater commented “[The leader’s] empathy in interacting with others, makes [the leader] approachable, trustworthy and shows [their] eagerness to work with and/or support peers, colleagues and superiors.”  When cognizance of bias is combined with high levels of empathy/perspective-taking, it can increase raters’ feelings of inclusion by up to 33%.

Why are humility and empathy so important in this context? Humility encourages others to share their feedback (e.g., that a leader might have favorites or have a tendency to interrupt people or regularly ignore a class of information). Empathy and perspective taking gives people hope that a leader cares about them and takes their views into account, rather than barreling on with preconceptions or a narrow set of ideas about their perspectives. Moreover, it creates a sense of personal connection between leaders and a diverse set of stakeholders, making it easier to make and implement shared decisions.

Putting the traits to work

How can leaders put these insights into practice? One tactic is to establish a diverse personal advisory board (PAD) — a group of people, often peers, who have regular contact with the leader and whom the leader trusts to talk straight. These trusted advisers can give leaders granular feedback on everyday interpersonal behaviors that support or inhibit inclusion, for example: Does the leader give equal time to all meeting participants, or favor those who are co-located over those who have dialed in? Does the leader always refer to one gender when giving examples or both? Does the leader use a broad spectrum of imagery when addressing a diverse audience, or imagery (such as sport metaphors or all male iconography) that represents only one group of people? Because a PAD is ongoing, leaders can receive feedback on whether the changes they make are hitting the mark.

A second tactic is for leaders to share their learning journey about recognizing and addressing biases. We have seen leaders do this by discussing their 360 assessment results with their manager, speaking at a town hall about their growth or creating a standing item in weekly team meetings (“inclusion moments”), during which they or a team member identifies what they have learned that week about diversity and inclusion. These actions express humility, help leaders to test and build on their insights and role model the importance of humility in addressing biases.

A third tactic is for leaders to immerse themselves in uncomfortable or new situations which expose them to diverse stakeholders, for example by attending an Employee Resource Group meeting, or sitting in different parts of the workplace each week. Exposure, combined with open-ended questions, helps to expand horizons and disrupt pre-conceived ideas.

Inclusive leadership is a critical capability to leverage diverse thinking in a workforce with increasingly diverse markets, customers, and talent. We have previously observed that only one in three leaders holds an accurate view about their inclusive leadership capabilities. A third believe they are more inclusive than they are actually perceived by those around them to be, while a third lack confidence in their inclusive leadership capability and so do less than they could to actively guide others and challenge the status quo.

Becoming more aware is critical to self-development, but awareness in isolation is not sufficient. Without humility and empathy/perspective taking, it’s difficult for leaders to gain deep insights into the nature of their blind spots or remedial strategies and, therefore, to grow. This requires effort, but fortunately the circle of learning is virtuous. Leaders who are humble and empathetic will be open to criticism about their personal biases, and greater self-insight into personal limitations prompts greater humility, empathy and perspective-taking. Not only are these behaviors critical for leaders’ personal development, they also serve to make others feel more included along the way. And that is, of course, the objective.

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Is Technology Subsuming Marketing?

Executive Summary

Data suggests that the importance of marketing in organizational hierarchies has declined, especially compared to functions like engineering, technology, and innovation. The authors previously found that U.S. companies’ advertising expenditures decreased from 1% of total expenditures in 1975 to 0.8% in 2017. In new research, they looked at the top leadership of S&P 1500 firms, and found a dramatic decline in the number of chief marketing officers (CMOs) in the group of top five compensated officers of a firm from 1999 to 2017. Meanwhile, the number of officers representing information or technology in the top five highest-paid category increased.

HBR Staff/boonchai wedmakawand/Getty Images

Last year, we published an analysis showing that U.S. companies’ advertising expenditures decreased from 1% of total expenditures in 1975 to 0.8% in 2017. We concluded that the importance of marketing must have been reduced in the organizational hierarchy, especially compared to, say, engineering, technology, and innovation. (R&D expenditures increased from 1% to 8% in the same time frame.)

Many scholars and practitioners wrote to us arguing that marketing is much more than advertising spend. It was a fair point. Unfortunately, marketing expenses, as opposed to advertising outlays, are not typically disclosed by firms, making it hard to examine the importance of marketing over time based on reported expenditures.

So we turned to another data set: the top leadership of S&P 1500 firms. When we looked at the top five compensated officers of a firm between 1999 and 2017, we found a dramatic decline in the number of chief marketing officers (CMOs) in this top rung — about 35%. Meanwhile, the number of officers representing information or technology in the top five, highest-paid category increased, and now far exceeds the number of CMOs. Because compensation typically reflects an executive’s seniority in an organization, our data suggests that the importance of CMO in the organizational hierarchy has declined, which supports our earlier assessment that marketing as a function is less valued today than it once was.

We found several potential explanations for these trends. One is that the number of tech firms has increased over time, while the number of firms in other industries, such as retail and manufacturing, has declined. Both retail and manufacturing sell physical products and rely heavily on the traditional 4P marketing principles (product, price, promotion, and place).

Another explanation is that marketing itself has changed. Customers now spend an increasing percentage of their income on software-based services that are created, priced, and distributed over the internet. They also get more information about products and services from online sources — bloggers, online reviews, influencers — than from watching advertisements. Advertisements themselves are now instantaneously placed in browsers based on customer data.  So the application of the 4Ps today requires more constant experimentation and dynamic decisions (not to mention algorithms, data scientists, econometricians, and big data experts), instead of the well-thought-out and stable policies that are recommended by extensive market research. As a result, IT must play an increasingly important role in marketing, and the importance of the person who looks at marketing from the technology lens must have increased over time. On the flip side, a marketing person who doesn’t understand technology must find it difficult to keep his or her job. One could even argue that marketing is getting merged into the IT function or outsourced to companies such as Google Marketing Platform.

Another explanation is that the technology-oriented founders do not fully appreciate the importance of marketing and underinvest in the function. Many of the leading brands today, such as Google, Microsoft, Amazon, and Facebook, were created by technology prowess. Compare this strategy to the advertising-based brand creation strategy of past successful brands such as Coca-Cola and Nike. It is noteworthy that among Apple, Microsoft, Google, Facebook, and Amazon, the top five most valuable brands identified by Forbes magazine, only Microsoft had a CMO that appears in the list of top five paid executives in 2017.

Yet another possibility is that firms increasingly acquire brands instead of developing them organically. This is evident from the increasing pace of mergers and acquisition transactions. Recall Microsoft’s acquisition of LinkedIn, Facebook’s acquisition of WhatsApp, and Google’s acquisition of YouTube, in multi-billion-dollar deals. This trend might explain the growing importance in the organizational hierarchy of the CFO, who negotiates the acquisition and the integration strategy of the target and arranges financing.

Whatever the definitive explanation, our findings indicate that the importance of CMOs in the organizational hierarchy has declined while that of CTOs has risen dramatically. Our findings should interest board of directors, CEOs, and IT, marketing, and human resources departments, as they consider their future staffing, compensation, and promotion policies. Perhaps it’s time to stop considering marketing and technology as two isolated departments and encourage closer collaborations between them.

Source: HBR.org

Posted on

Is Technology Subsuming Marketing?

Executive Summary

Data suggests that the importance of marketing in organizational hierarchies has declined, especially compared to functions like engineering, technology, and innovation. The authors previously found that U.S. companies’ advertising expenditures decreased from 1% of total expenditures in 1975 to 0.8% in 2017. In new research, they looked at the top leadership of S&P 1500 firms, and found a dramatic decline in the number of chief marketing officers (CMOs) in the group of top five compensated officers of a firm from 1999 to 2017. Meanwhile, the number of officers representing information or technology in the top five highest-paid category increased.

HBR Staff/boonchai wedmakawand/Getty Images

Last year, we published an analysis showing that U.S. companies’ advertising expenditures decreased from 1% of total expenditures in 1975 to 0.8% in 2017. We concluded that the importance of marketing must have been reduced in the organizational hierarchy, especially compared to, say, engineering, technology, and innovation. (R&D expenditures increased from 1% to 8% in the same time frame.)

Many scholars and practitioners wrote to us arguing that marketing is much more than advertising spend. It was a fair point. Unfortunately, marketing expenses, as opposed to advertising outlays, are not typically disclosed by firms, making it hard to examine the importance of marketing over time based on reported expenditures.

So we turned to another data set: the top leadership of S&P 1500 firms. When we looked at the top five compensated officers of a firm between 1999 and 2017, we found a dramatic decline in the number of chief marketing officers (CMOs) in this top rung — about 35%. Meanwhile, the number of officers representing information or technology in the top five, highest-paid category increased, and now far exceeds the number of CMOs. Because compensation typically reflects an executive’s seniority in an organization, our data suggests that the importance of CMO in the organizational hierarchy has declined, which supports our earlier assessment that marketing as a function is less valued today than it once was.

We found several potential explanations for these trends. One is that the number of tech firms has increased over time, while the number of firms in other industries, such as retail and manufacturing, has declined. Both retail and manufacturing sell physical products and rely heavily on the traditional 4P marketing principles (product, price, promotion, and place).

Another explanation is that marketing itself has changed. Customers now spend an increasing percentage of their income on software-based services that are created, priced, and distributed over the internet. They also get more information about products and services from online sources — bloggers, online reviews, influencers — than from watching advertisements. Advertisements themselves are now instantaneously placed in browsers based on customer data.  So the application of the 4Ps today requires more constant experimentation and dynamic decisions (not to mention algorithms, data scientists, econometricians, and big data experts), instead of the well-thought-out and stable policies that are recommended by extensive market research. As a result, IT must play an increasingly important role in marketing, and the importance of the person who looks at marketing from the technology lens must have increased over time. On the flip side, a marketing person who doesn’t understand technology must find it difficult to keep his or her job. One could even argue that marketing is getting merged into the IT function or outsourced to companies such as Google Marketing Platform.

Another explanation is that the technology-oriented founders do not fully appreciate the importance of marketing and underinvest in the function. Many of the leading brands today, such as Google, Microsoft, Amazon, and Facebook, were created by technology prowess. Compare this strategy to the advertising-based brand creation strategy of past successful brands such as Coca-Cola and Nike. It is noteworthy that among Apple, Microsoft, Google, Facebook, and Amazon, the top five most valuable brands identified by Forbes magazine, only Microsoft had a CMO that appears in the list of top five paid executives in 2017.

Yet another possibility is that firms increasingly acquire brands instead of developing them organically. This is evident from the increasing pace of mergers and acquisition transactions. Recall Microsoft’s acquisition of LinkedIn, Facebook’s acquisition of WhatsApp, and Google’s acquisition of YouTube, in multi-billion-dollar deals. This trend might explain the growing importance in the organizational hierarchy of the CFO, who negotiates the acquisition and the integration strategy of the target and arranges financing.

Whatever the definitive explanation, our findings indicate that the importance of CMOs in the organizational hierarchy has declined while that of CTOs has risen dramatically. Our findings should interest board of directors, CEOs, and IT, marketing, and human resources departments, as they consider their future staffing, compensation, and promotion policies. Perhaps it’s time to stop considering marketing and technology as two isolated departments and encourage closer collaborations between them.

Source: HBR.org

Posted on

Is Technology Subsuming Marketing?

Executive Summary

Data suggests that the importance of marketing in organizational hierarchies has declined, especially compared to functions like engineering, technology, and innovation. The authors previously found that U.S. companies’ advertising expenditures decreased from 1% of total expenditures in 1975 to 0.8% in 2017. In new research, they looked at the top leadership of S&P 1500 firms, and found a dramatic decline in the number of chief marketing officers (CMOs) in the group of top five compensated officers of a firm from 1999 to 2017. Meanwhile, the number of officers representing information or technology in the top five highest-paid category increased.

HBR Staff/boonchai wedmakawand/Getty Images

Last year, we published an analysis showing that U.S. companies’ advertising expenditures decreased from 1% of total expenditures in 1975 to 0.8% in 2017. We concluded that the importance of marketing must have been reduced in the organizational hierarchy, especially compared to, say, engineering, technology, and innovation. (R&D expenditures increased from 1% to 8% in the same time frame.)

Many scholars and practitioners wrote to us arguing that marketing is much more than advertising spend. It was a fair point. Unfortunately, marketing expenses, as opposed to advertising outlays, are not typically disclosed by firms, making it hard to examine the importance of marketing over time based on reported expenditures.

So we turned to another data set: the top leadership of S&P 1500 firms. When we looked at the top five compensated officers of a firm between 1999 and 2017, we found a dramatic decline in the number of chief marketing officers (CMOs) in this top rung — about 35%. Meanwhile, the number of officers representing information or technology in the top five, highest-paid category increased, and now far exceeds the number of CMOs. Because compensation typically reflects an executive’s seniority in an organization, our data suggests that the importance of CMO in the organizational hierarchy has declined, which supports our earlier assessment that marketing as a function is less valued today than it once was.

We found several potential explanations for these trends. One is that the number of tech firms has increased over time, while the number of firms in other industries, such as retail and manufacturing, has declined. Both retail and manufacturing sell physical products and rely heavily on the traditional 4P marketing principles (product, price, promotion, and place).

Another explanation is that marketing itself has changed. Customers now spend an increasing percentage of their income on software-based services that are created, priced, and distributed over the internet. They also get more information about products and services from online sources — bloggers, online reviews, influencers — than from watching advertisements. Advertisements themselves are now instantaneously placed in browsers based on customer data.  So the application of the 4Ps today requires more constant experimentation and dynamic decisions (not to mention algorithms, data scientists, econometricians, and big data experts), instead of the well-thought-out and stable policies that are recommended by extensive market research. As a result, IT must play an increasingly important role in marketing, and the importance of the person who looks at marketing from the technology lens must have increased over time. On the flip side, a marketing person who doesn’t understand technology must find it difficult to keep his or her job. One could even argue that marketing is getting merged into the IT function or outsourced to companies such as Google Marketing Platform.

Another explanation is that the technology-oriented founders do not fully appreciate the importance of marketing and underinvest in the function. Many of the leading brands today, such as Google, Microsoft, Amazon, and Facebook, were created by technology prowess. Compare this strategy to the advertising-based brand creation strategy of past successful brands such as Coca-Cola and Nike. It is noteworthy that among Apple, Microsoft, Google, Facebook, and Amazon, the top five most valuable brands identified by Forbes magazine, only Microsoft had a CMO that appears in the list of top five paid executives in 2017.

Yet another possibility is that firms increasingly acquire brands instead of developing them organically. This is evident from the increasing pace of mergers and acquisition transactions. Recall Microsoft’s acquisition of LinkedIn, Facebook’s acquisition of WhatsApp, and Google’s acquisition of YouTube, in multi-billion-dollar deals. This trend might explain the growing importance in the organizational hierarchy of the CFO, who negotiates the acquisition and the integration strategy of the target and arranges financing.

Whatever the definitive explanation, our findings indicate that the importance of CMOs in the organizational hierarchy has declined while that of CTOs has risen dramatically. Our findings should interest board of directors, CEOs, and IT, marketing, and human resources departments, as they consider their future staffing, compensation, and promotion policies. Perhaps it’s time to stop considering marketing and technology as two isolated departments and encourage closer collaborations between them.

Source: HBR.org

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Get Adventurous with Your Leadership Training

Orla/Getty Images

Organizations spend billions of dollars each year on leadership development. Yet research has shown that many of these programs don’t seem to work — they fail to help individuals develop the sorts of dynamic, collaborative leadership skills needed for today’s work.

In our research, teaching, and consulting on leadership development, we’ve been inspired by the success of one particular form: wilderness adventure expeditions, where people develop and refine their leadership as they and their team navigate the interpersonal and physical challenges of trekking through the wilderness. By forcing people to work collaboratively, develop new skills, and take control of their decisions and outcomes, the austere environment can help expose key facets of leadership and team interaction that might otherwise be overlooked in “normal” settings.

In our own experience leading these kinds of expeditions, including a leadership development expedition course for MBA students (a 10-day course either sea kayaking off the coast of Belize or backpacking in the mountains of Norway), we’ve found that they effectively achieve many of the goals of modern leadership development. These expeditions help participants develop their ability to tackle complex challenges, make strategic decisions in ambiguous situations, and collaborate and learn with their team — precisely the attributes desired in modern organizational leaders. They also help build adaptability and resilience.

While outdoor expeditions and adventure leadership activities are used in a variety of organizations (including at NASA for training and building trust in astronaut teams), we of course recognize that they require significant time, resources, travel, and physical ability, which may not be accessible to all leaders and companies. Yet, we believe that there are at least four characteristics of these expeditions that can be adapted and applied to improve many other types of leadership training and developmental programs:

Complex, unfamiliar experience. A wilderness expedition naturally places people in unfamiliar environments that require them to adopt new skills and ways of interacting to be successful. Arriving at a remote island, with no cell reception, and being handed a tent, stove and kayak paddle is not a normal weekday routine for most people. It forces them into new patterns of action and opens the door to new habits and working styles.

This novelty unlocks opportunities for people to step up in new ways and reveal untapped aptitudes and attitudes that can bolster their leadership. Even for experienced adventurers, the ambiguity inherent in an expedition (e.g., dealing with unpredictable weather and other conditions) forces people to stretch themselves as they work with their team.

Unfortunately, we see many of the opposite trends in more traditional, “indoor” leadership development efforts. For example, a traditional leadership training course might include a lecture on general leadership ideas, combined with feedback or coaching on what the individual is doing well or poorly in their current role. Though informative, these structures miss an opportunity to expand beyond what the person already knows how to do and hone their leadership for new environments. Simply focusing on general principles or reflecting on past behavior doesn’t provide the same opportunity to unlock new, untapped potential or learn how to respond in the kinds of unfamiliar, ambiguous settings the person might face in the future.

Similarly, we often see team leadership “retreats” that place people in a similar environment to their day-to-day work (e.g., a conference room). As a result, relatively little new insight or development occurs, because people simply fall back on their well-learned habits and patterns of interaction. An expedition naturally forces everyone to adapt to a new situation, but indoor development efforts could take advantage of this principle by moving to a new setting where existing hierarchies are less relevant (e.g., even something as simple as an “escape room” exercise). A new experience forces people to shake up their habits and reveals pockets of knowledge, insight, and potential that might have been hidden.

Purposeful preparation. Very few people would show up for a wilderness expedition without doing a good bit of homework — preparing physically, logistically, and mentally for the challenge ahead — and setting goals. Then, actually embarking on the expedition requires a high degree of intentionality and focus, forcing people to disconnect (literally and figuratively) from their day-to-day work setting. This preparation and intentionality enables them to engage more thoughtfully in their experience and draw potentially unexpected insights about leadership and behavior — both their own and others’.

For instance, we have many women and men in our expedition courses who are military veterans — people you’d expect would be comfortable leading a team in a remote, austere environment, and thus might default to taking the lead. Yet with the opportunity to be purposeful and think about the developmental goals they have for the expedition, these students often seek to use it as an opportunity to step back and learn from others’ leadership in order to better understand how to transition their military leadership to the corporate world.

The benefits of preparation and setting developmental goals are certainly not limited to an expedition setting, but a remote environment often encourages this preparation in ways that more traditional leadership development efforts do not. All too often, leadership development programs are seen as unwelcome burdens on one’s calendar, with any preparation left to the last minute. It’s also common for people to stay connected during training courses, responding to email or checking in with colleagues at the expense of fully engaging in their own development. And in team settings, retreats and “off-sites” can quickly devolve into complaint forums or focus on technical, process-improvement discussions, rather than on individuals’ development goals.

Continuous, multisource feedback. During our expedition courses, students receive a large volume of feedback on their leadership and performance. The work of an expedition itself provides excellent feedback – the team ends up where it intended to be on the map (or doesn’t), the tent stays dry (or not), and everyone leaves camp on time the next morning (or a dinner in the dark awaits). We also have nightly debrief meetings as a team, and dedicated peer feedback partners provide each person with effective reflections, observations, and advice over the trip.

This continuous practice of feedback-giving generally creates a team norm of open discussion and honest appraisals of how people experience an individual’s leadership in positive and negative ways. These ongoing interactions also engender a sense of vulnerability and trust in the group that builds camaraderie and reliance that lasts long after the expedition ends. Indeed, we have observed our part-time MBA students continuing to use their expedition-mates as virtual “sounding boards” and sources of feedback as they return to their day-to-day work life, despite being in different organizations or in different parts of the country.

Again, the benefits of ongoing, thoughtful feedback are not unique to the expedition setting, but it goes without saying that a lot of feedback in organizations is given too little, too late, and much isn’t effective. Leadership development interventions also tend to feature sporadic instances of feedback every week or month, or aggregate feedback (as in a 360-degree assessment) that paint a leader’s behavior in broad strokes, distant from when and where the behavior occurred and could be addressed.

Repeated challenges. Wilderness leadership development also benefits from the repetitive nature of life in the outdoors. Each day of the expedition is different in some ways, but revolves around a similar set of challenges (e.g., pack, navigate, break camp, etc.). When combined with the continuous feedback described above, this repetition gives individuals an opportunity to actually implement new behaviors after receiving feedback, closing the loop on their development by testing out new actions immediately and gauging the difference in outcome.

For instance, we see students struggle through a particular task (e.g., working together to prepare a meal on camp stoves), debrief the challenges that emerged, and then wake up the next day with an immediate opportunity to implement the lessons learned when it is time to cook again. Though improvement is not always immediate, the repeated opportunities aid students’ learning and help them incorporate different behaviors in real time during the course, which can help them bring these behaviors back to their work.

In our minds, this element of repetition is one of the major missed opportunities of many leadership development programs or team training efforts. Leadership programs or team-building exercises are too often “one-offs,” and even when adequately debriefed and reflected upon, the intention is to simply take the lessons home and implement them in their workplace. But without the opportunity to practice putting these insights into practice right away, the positive changes or intended behaviors can be lost.

This gap allows new information to be forgotten, insight to fade, intention to waver, and confusion to set in. Knowing that the transfer of leadership behavior from training settings to the workplace (where systems and structures are still built on the “old” way of doing things) is already an uphill battle, giving individuals immediate practice in applying new behaviors or strategies can help them bring these ideas to work more effectively.

Unmediated by technology, competing demands, or office politics, the wilderness distills many facets of leadership and team interaction down to their essence. Yet, we think that these four elements of outdoor expeditions can shed light on how leadership and team development efforts in any setting might be enhanced. Though we will always take any opportunity to move leadership development out of the office and into the wild, recognizing and applying these principles to all leadership development activities might be a way of bringing the outdoors inside and expanding the growth of leadership in organizations.

Source: HBR.org

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Does Your Family Business Have a Succession Plan?

Executive Summary

When a family business assumes that the next generation can simply take over where mom or dad left off without pausing to consider the CEO job description, governance, or the evolving business context, they may be setting themselves up to fail. Families have broken up, reputations have been lost, and businesses have collapsed because the generation in control did not consider how to set the next generation up for success. Just as a business must reinvent itself as markets shift, so must a business family reinvent (or at least thoughtfully revisit and refresh) its ownership and leadership model. Seek to understand the changing players and dynamics so that you have better context for what your business, family, and owners need in the future.

Fuse/Getty Images

A day before his 35th birthday, Hampton Berger*, a fourth-generation member of a successful family-owned manufacturing business, stood outside his father’s office, anxiously waiting to discuss his father’s succession plan. Hampton had spent his life “checking the boxes” that he hoped would position him to take over the family business someday: he obtained an MBA and received several promotions in his R&D role at a global car manufacturer before joining the family business.

Much to Hampton’s relief, his father announced that Hampton would inherit ownership control and become CEO of the business, just as his father and grandfather had done, effective immediately. As Hampton realized his childhood dream had been fulfilled, he thought to himself: “What could possibly go wrong?”

A lot, it turned out.

As is true in many well-intentioned family businesses, succession in Hampton’s family business was built around the idea that leaders from the next generation can simply step into the large shoes of their predecessors and run the business (and the family) exactly as mom or dad would have done. But that fails to take into account that each new generation of leadership likely has different skills and interests, and that business contexts and needs inevitably shift over time. When a family business assumes that the next generation can simply take over without pausing to consider the CEO job description, governance, or the evolving business context, they may be setting themselves up to fail. We like to call this the “Sequel Fallacy.”

Insight Center

In Hollywood, many sequels were created in the 1910s as a cost-saving measure that allowed directors to reuse sets, costumes, and props. Sequels have become big business in Hollywood because they build pre-awareness — the audience’s sense of comfort and familiarity with the concept that often leads to big box office numbers today.

Family business sequels have similar traits to cinematic sequels. But in family business, it’s not sets and costumes that are reused; it’s ownership structures, role descriptions, and decision-making processes. On paper, defaulting to a family business sequel makes perfect sense. After all, what worked for the senior generation should work for their children, right? Enacting sequels also often offers the path of least resistance: it doesn’t require the senior generation to change their own responsibilities in anticipation of succession (or after), or to change how their organizations make decisions. But that path can lead to significant challenges.

In our example above, the Berger family traditionally passed controlling ownership and the CEO position to the eldest male in each successive generation, without even considering other candidates. Other siblings of that generation became co-owners, but were not given the chance to lead the business and were expected to be passive as owners. In Hampton’s father’s generation, that arrangement had worked well, and his father was allowed to run the business as he saw fit.

But Hampton’s leadership wasn’t as smooth. After his father passed away, Hampton and his siblings became co-owners of the business, with Hampton remaining in the CEO position. Following his father’s traditional playbook, Hampton made several critical decisions without consulting his siblings. Hampton’s unilateral decision to replace several long-serving board directors was the proverbial last straw. Though his intentions were good — he was bringing in new board members with expertise in a growing segment of the business — Hampton’s siblings were enraged by his actions, not only because they held close relationships with the replaced directors, but because they feared that their opinions as co-owners had been ignored. Hampton’s relationship with his siblings devolved into infighting, significant business losses, and eventually lawsuits. This succession sequel was a flop.

How to avoid these succession challenges

Your family business might avoid the sequel fallacy by sheer luck. Superstars in the next generation can have just the right relationships with their siblings to smooth over jealousies. Or the business context might create opportunities for other family members to find their niche and coexist within the existing structure, or pursue their passions elsewhere, thus avoiding jealousy or a power struggle.

But in our experience, such success stories are the exception. Families have broken up, reputations have been lost, and businesses have failed all because the generation in control did not pause from tradition consider how to set the next generation up for success. Neither Hampton nor his father recognized that in successive generations, family businesses typically need to involve different people, with different interests, relationships, and aspirations, operating in a different business environment, with a different ownership context and culture — and even family as new spouses are added. When company and family have changed, but the approach to owning and managing them has not, it almost always has an unhappy ending.

Just as a business must reinvent itself as markets shift, so must a business family reinvent (or at least thoughtfully revisit and refresh) its ownership and leadership model. In our experience, families should take five steps in advance of succession decisions:

  • Articulate the changing dynamics. As families grow, they inevitably become more complex. What once happened all under one roof in one generation can quickly span to multiple households. Growing up with different experiences often results in a group of individuals with a much wider set of interests, expectations, and behaviors. Coordinating these more diverse groups presents much different challenges. Seek to understand the changing players and dynamics by updating your family tree and analyzing the changes from the last transition period to today so you have better context for what your business, family, and owners need in the future. And once you understand those differences, name them explicitly and have several discussions with your family and owners to explore how those differences might affect the future.
  • Look outside the company for advice. Engage with other business families to understand how they have managed their transition process. While their situation may be different from your own, getting insight into their approach and the reasons they chose their path can shed light on your own challenges and decisions. For example, how did they decide to transfer ownership to the next generation and why? Whose expertise did they seek in the process? How did they build alignment in both the current and future generations? Be open during these discussions, as they often introduce new perspectives that you haven’t previously considered. And seeing examples can often help build the courage you need to break tradition.
  • Be open-minded. Respect tradition and understand why decisions were made in the past. But don’t get stuck in conversations that start with “but that’s how we’ve always done things here.” Instead, talk with your fellow owners about what you would do in the absence of tradition. Can you stay true to your past and simultaneously embrace new ideas? Can you chart a better path forward if you remove some preconceptions that no longer apply? The Antinori family in Italy did just this when, after 25 generations of passing ownership and leadership of their winemaking business to sons, they split ownership equally between three daughters and divided leadership of the business according to each daughter’s strengths. They were able to do so in part because they removed preconceptions about how succession worked and started with a blank slate. In the end, tradition may guide you, but don’t let it be the primary reason for continuing down your succession path.
  • Don’t commit to succession decisions too early. The pride that comes with bringing the next generation into the business, and as a next generation family member honoring your family’s tradition, can lead some individuals to make their decision about succession too early. Committing prematurely as either a senior or junior generation family member can put undue pressure on the successors and alienate talented — maybe even more talented — family members. Instead, develop a plan and process that can evolve over time — one that takes into account new information as it is available and course corrects as needed. Put simply, make succession planning a topic that owners discuss regularly and continue to ask: “Do we have the right people in the right places working well together to make the right decisions with the right information for our ownership and family?”
  • Talk openly about plans for the future. Succession planning is a process, not an event, and it equally affects the family, the business, the owners, and the communities where each of these groups operate. Engage with each — especially your next generation — during the succession planning process. Talk with them about the past, what worked well, and what was challenging. Share your aspirations and views on what an ideal future would look like. Acknowledge the traditions, the differences, the new innovations, and the personal aspects of succession. For example, while a current generation leader is able to unilaterally make most decisions about the business as controlling owner, perhaps the next generation would fare better with a governance process that delegates some decisions to an independent board and requires significant decisions to be approved by a majority of co-owners. The next generation may support this sequel or may have different ideas. Doing all of this will not only create a shared view of the future and drive commitment from both generations, but it will also provide the next generation with a roadmap for how to eventually transition to their own children.

In cinema, Marvel Studios provides an excellent example of how to avoid the sequel fallacy. Marvel Cinematic Universe has released more than 22 titles in just over a decade, grossing more than $18 billion during that time, without rebooting itself or replacing its cast. But each subsequent movie has evolved slightly, with individual characters becoming more or less prominent, new superhero talents being developed, and the context of the challenge they’re up against shifting so that different superheroes have a chance to play important roles. As business families and owners, it’s your job (and opportunity) to assume the role of director to create a future in which each of your own characters can survive and thrive for generations to come.

*All identifying details have been changed.

Source: HBR.org

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Hiring An Executive Coach? Be Aware Of These Five Risks

Coaching is having a moment. Whether reflected in pop culture—episodes of “Silicon Valley” and “Billions” come to mind—or through a quick scroll of your LinkedIn feed, it seems that lately everyone is either seeking an executive coach or claiming to be one.

While it’s great for a spotlight to shine on the value of developing better leaders, there is a risky side to coaching’s popularity as well. CEOs who are thinking about hiring an executive coach need to be aware of these risks in order to avoid potentially disastrous results for both their organizations and themselves.

Consider this real-life situation. A senior partner at a major private equity firm had received negative feedback about his ability to delegate. While he did not really see this as a problem, the firm got him to agree to meet with an executive coach to work on this essential leadership skill. The coach had come highly recommended, and the two shared an instant rapport and started meeting frequently. But what emerged over the next few weeks was not what the organization needed or had expected. It turned out that the executive reminded the coach of her beloved, recently deceased father. As a result, the coach lost all objectivity and fell into the role of an advocate, essentially reinforcing her client’s incorrect beliefs that the negative feedback he received was unfair and not rooted in fact.

The coach may have been well-intentioned, but the unconscious and unrecognized feelings between them resulted in driving a deeper wedge between the executive and the other senior partners. This caused enduring internal conflicts at the organization and damaged the credibility of the chief human resources officer, who had brought in the coach but was now being forced to lobby against this external expert she once endorsed. Because of this misguided and likely under-trained coach, the executive saw no need to change his behavior and the entire matter was abruptly and awkwardly dropped. Turnover on his team rose over the next few months, leading to reputational damage and collegial relationships getting harmed beyond repair.

One of the biggest problems the coaching “industry” faces is that there are no barriers to entry. Anyone can call themselves an executive coach. This carries considerable risk for the individual being coached, for the sponsor and for the firm. Undertrained or unscrupulous coaches can make false promises or follow instincts that are blatantly self-serving and do real damage to leaders and organizations. Here are some pitfalls that organizations must stay aware of and what they can do about them:

Risk 1: Overpromising, underdelivering

Executive coaching is essentially a framework to help motivated professionals learn new behaviors. Learning and adapting to new practices takes time and effort, so be wary of anyone who offers simple solutions or quick fixes. Executed effectively, coaching results in what psychologist Dr. Robert Kegan refers to as ‘transformational learning,’ i.e., significant growth in key aspects of oneself and one’s leadership behaviors resulting in meaningful individual and organizational change. Coaching involves intimate knowledge of the environment surrounding the executive and an awareness of the behavioral reinforcements and cultural variables that can function as roadblocks. A credible coach should be able to identify and articulate all the forces that maintain behavioral patterns and come up with a cogent plan to address them.

Risk 2: Looking for a gravy train

Coaching should never occur in an open-ended, unstructured, ‘what-do-you-want-to-work-on-today?’ context. From the outset, the coach must talk to the client about the end point, the finish line, and the measurable goals the working relationship needs to achieve together. Always consider coaching within a fixed time limit with compensation driven by measurable results. Many self-serving coaches are quite effective at creating dependencies in otherwise highly accomplished and senior executives. Whether unconsciously or consciously, a coach can manipulate the relationship to draw out the professional service relationship. An active sponsor, such as a chief human resources officer, and a regularly reviewed, written coaching plan with milestones helps keep both parties on target to the finish line.

Risk 3: Ignoring internal dynamics

As noted above, coaches can’t successfully work with a client unless they fully understand the structure and culture of the organization in which they are working. Leaders don’t exist in a vacuum; leadership and culture are two sides of the same coin. I recall a situation where a coach was brought into a “born digital” organization to work with the head of sales – a tough and very specific job for which the coach had expertise. This organization was based on a flat structure and had a fast-moving culture where teamwork and collaboration were paramount, while the coach’s experience and style were rooted in more hierarchal companies. As a result, the coach’s formal and chain-of-command approach was a complete mismatch and he couldn’t convey and transfer his knowledge and advice effectively. The lesson: culture must be part of the assessment process during selection. A coach who has been successful in one environment will not necessarily be successful in another.

Risk 4: Not understanding how people change

Coaching in business is a different discipline from other forms of professional training. Coaching requires knowledge of psychology and adult development, and while coaches don’t have to be psychologists to be effective, it certainly helps. At minimum, coaches should be able to demonstrate more than a superficial understanding of how working adults learn and grow. Coaches who are not trained to identify the executive’s unspoken or often unconscious needs and defenses will inevitably collude with them (consider the example at the beginning of this article). For executive coaching to have meaningful impact, consider a coach with a background in psychology, someone who understands that your past experiences are key to who you have become, one who has credible experiences in the business world, and who can constructively and empathically confront both your strengths as well as your weaker areas.

Risk 5: Neglecting their own sensitivities

Finally, a good coach must not only be adept at understanding others – their motivations, insecurities, personality strengths, weaknesses, and the like – but also at understanding themselves. An essential prerequisite is a coach who has not only been trained in how people can change their behavior, but one who is self-aware of his or her own motivations. A good question to ask when selecting an executive coach is whether he or she has been coached before and what that experience was like.  What did they learn about themselves and what was surprising? They should know what it is like to receive 360-degree feedback, for example, and have substantial experience as part of successful organizations and teams. They should also be comfortable discussing coaching engagements that didn’t go well for them.

A Checklist for Hiring an Executive Coach

1. Not ‘one and done’: Interview at least three candidates. Chemistry matters, as does interpersonal style and the ability to listen and to discern what is really being said. Coaching quality varies widely, so give yourself the benefit of choice.

2. Use your network: Personal endorsements based on past direct experience are key. Many executives have some experience with coaching and are happy to talk about it.

3. Check references: Ask the coach’s former clients what they did that was effective and whether they would re-engage with them. If a coach won’t offer at least three references, do not consider using him or her.

4. Understand their background: Ask more than cursory questions about training. One coach I met made sure everyone knew he had a Ph.D. degree. When I pressed him about what specialty he took his degree in, he said with a grin, “Art history, but I let people think I’m a psychologist.”

5. Begin with the end in sight: Have the coach walk you through a typical engagement. This should include some form of initial assessment, a goal- and milestone-setting process, a review process with other stakeholders, a schedule of progress review meetings, and a clear end date.

6. Anticipate the challenge: Be prepared to describe for the coaching candidate something you wish to get better at or a behavior you seek to understand more fully. Have them walk you through their approach.

7. Write it down: Make sure there is a one-page written coaching plan with goals and objectives. Review it monthly. Don’t go off-track or off on a tangent.

8. Set an end date: Before you begin, know when the coaching will end. Don’t move the date unless it is well justified. Watch for signs of increasing dependency on the coach. Remind yourself – and the coach – that this, too, will end.

While the risks involved in hiring a coach are real, they can certainly be managed. Ask the right questions, do your due diligence, and follow a few rules of thumb. For me, those are based on the three C’s: chemistry, character and competence. By giving equal attention to each of these areas while bearing in mind the potential pitfalls, you will maximize your chances of having a coaching experience that delivers lasting results.

Source: ChiefExecutive.net