LEADERSHIP & ORGANISATIONS
Twenty global business leaders share the attributes that make them effective.
We often hear that running a large company is one of the most complex jobs in the world. Business schools, strategic consultancies, headhunting firms, training providers, executive coaches all have a tendency to mystify the work of the CEO. However, effective CEOs see their jobs in much simpler terms and consider this simplification an important element of their effectiveness. That was one of the surprising findings of a research project we undertook over the last five years. In order to understand how the CEOs themselves see their work and which factors make them successful, we interviewed a carefully assembled selection of truly international CEOs from the world’s twenty biggest economies (other findings are reported in our book CEO School: Insights From 20 Global Business Leaders). Although our respondents come from different continents, countries, industries and types of companies, they all emphasised four essential roles of a CEO: envisioning; nominating; enabling and managing crisis. They also shared specific practices – iterative behaviour strategies – that help them play these roles. Across a series of four articles, we will expand on each of these roles and how these CEOs carry them out. We start in this article with envisioning. Envisioning Our 20 CEO-experts needed no prompting to talk about “vision”. It’s a topic nearly all of them raised spontaneously. “The ability to define an accurate vision is very important,” says Jean Sentenac of Axens (France). For Abdel F. Badwi, formerly of Bankers Petroleum (Canada), the “role of the CEO is mainly about vision”. Contrary to the widespread view of a corporate vision as a picture of the future set in stone, our CEOs consider vision a work in progress. Fine-tuning and updating the vision is a never-ending process of unravelling a paradox. It entails a number of elements.- First, good vision is always crystal clear, yet it is also evolving along with the company and the macro- and micro-environment in which it operates. As Diego Bolzonello, formerly of Geox (Italy) says, “Direction is made by a long-term vision…and you modify it continuously, because in this environment you need to understand what is happening all around the world.”
- Second, good vision is grounded in rational evaluation of the market and business potentials, yet it must also be inspirational and emotional. Renato Bertani of Barra Energia (Brazil) explains: “It’s not about sending orders out; it’s really about making people believe you know the right way and providing the right vision.”
- Third, good vision provides direction and establishes fundamental working principles, yet it leaves plenty of room for creative expression from every individual. As Lee Chul Kyoon of Daelim (South Korea) says, “Once a system is set up, it will function. But if we don’t all share the same future perspective, it won't work. The CEO provides that.”
- One of our clients calls the first practice a “walking vision”, which comes from the idea of “walking the talk”. We just call it personification of vision. In other words, the CEO becomes a living representation of what her vision is about. If it’s about excellence, the CEO strives to excel in everything she does. If it’s about collaboration, she makes collaboration her way of work. Diego Bolzonello sums it up: “You must be an example to others and understand the meaning of your actions [for them]”.
- The second practice is sometimes called a “talking parrot”. But it simply boils down to the reiteration of vision. Good CEOs use every opportunity to articulate their vision: regular management team meetings, corporate conferences, shop-floor walkabouts and occasional encounters in the office corridors. They may use different words each time, but they keep sending the same message about where the company is going and what it stands for.
- The third practice is operationalisation of vision. According to Richard Rushton of Distell Group (South Africa), the CEO is “fundamentally required to shape the future” and part of this future is internal. Corporate rules, policies and procedures, working methods and products… they all speak without having a mouth – and effective CEOs make good use of them to promote the vision. If your vision is “to be number one in the world in the shoe business”, as Diego Bolzonello claims for Geox, you have to make sure that you reward excellence rather than mediocrity. And you must recruit and promote ambitious people, giving them freedom to create and innovate.
- The fourth practice is instrumentalisation of vision. Nishi Vasudeva of Hindustan Petroleum (India) describes it as follows: “a broader vision and a feeling for external factors, so that you can fix difficulties as they arise”. To explain this more fully, good CEOs encourage their people to use the corporate vision as a benchmark for all kinds of decision making. When a VP of marketing asks for advice about who to hire as head of marketing for the Northern European region – an INSEAD MBA with two years’ experience working for the company’s main competitor or an industry veteran – the CEO’s first question should be: “Who would fit our vision better?” The same logic applies to investment projects, acquisitions or divestitures, as well as new products or services.
Stanislav Shekshnia is Senior Affiliate Professor of Entrepreneurship and Family Enterprise at INSEAD. He is also the Co-Programme Director of Leading from the Chair, one of INSEAD’s Board Development Programmes and a contributing faculty member at the INSEAD Corporate Governance Centre. Kirill Kravchenko is the Deputy Director General in charge of Administrative Affairs at Gazprom Neft and is on the board of directors of NIS Gazprom Neft, Serbia. Elin Williams is a writer specialising in business, careers and higher education. She holds a BA and doctorate from the University of Oxford. Shekshnia, Kravchenko and Williams are the co-authors of CEO School: Insights From 20 Global Business Leaders. This article is republished courtesy of http://knowledge.insead.edu. Copyright INSEAD 2017.