The MT Essays 40th Anniversary: Leadership - Managing paradox

Vital though they are, strategic skills will not be enough for the successful leaders of the future. Tolerance, pragmatism and 'international literacy' must be in the mix too.

by Elisabeth Marx and Steve Tappin, Heidrick & Struggles
Last Updated: 31 Aug 2010

The best leaders know themselves well. They use knowledge of their own strengths and weaknesses to build leadership teams with comple- mentary skills. They know that the success of a company will depend on a well-functioning team at the top, so they spend time and effort developing that team to ensure the strategy is delivered.

The emphasis on the CEO as hero is waning. The obvious complexity of business instead warrants the view of 'team leadership at the top', which in many cases is already evident in the corporate triumvirate of chairman, CEO and finance director.

As a result of our own research and consulting work, we have come to believe that the key criteria for future leaders are: an ability to deal with paradoxes; a balance between internal and external stakeholders; an ability to build effective teams; and international literacy.

Psychologically, executives will have to expand their thinking to accommodate greater cultural relativism (rather than providing black-and-white solutions), develop stronger interpersonal sensitivity and communi- cation skills, and deal with the constant confrontation with unfamiliar patterns, people and business.

Progression to a senior business role requires the ability to operate strategically: to develop a helicopter view and think in the long term.

Management assessments show that successful executives are strong in this strategic area and that candidates who have developed this ability are typically at a more senior level than those who haven't. Yet strategic thinking isn't enough on its own: it needs to be complemented by a focus on operational results and the ability to switch easily from long- term to short-term thinking, from helicopter view to operational details, and from cost-saving to expansion mode. The flexibility to handle this potential paradox and deal with seemingly incompatible extremes is what characterises the top executives of the future.

This ability to reconcile contradictions will also be useful in balancing the interests of internal and external stakeholders. In the 1990s cult of the CEO as hero, chief executives were oriented towards external stakeholders: we wanted charismatic, media-friendly per- sonalities. But this narrow view of successful executives was being questioned even as early as 2001, when Jim Collins' Good to Great was published.

Of course, we'll continue to need outward-looking executives who develop relationships with their external stakeholders, customers and shareholders.

They must have a finger on the pulse of their customers, think ahead of the competition and manage shareholder expectations. But it's just as important for them to focus on internal stakeholders. The personality, values and attitude of a leader are never more apparent and more deeply felt than in the relationship with staff.

Globalisation has made international literacy a key criterion of success: the ability to recognise global economic factors, to operate in different geographic re- gions, to understand the cultural differences of both employees and customers - and to tolerate ambiguity.

The career patterns of FTSE-100 CEOs - role models for executives of high potential - have shown clear shifts towards international literacy over the past decade. In 1996 only 42% of them had international experience, but this rose to 61% in 2002 and was at 79% by 2005. Most of this experience has been gained in North America or Europe, and a minority in the new economic growth regions of Asia and South America.

The changing demands of leadership are taking hold in the recruitment and development of senior executives. International literacy is ideally complemented by fluidity in thinking and execution, the ability to deal with ambiguity and an acceptance that all norms are relative. These are some of the characteristics that will determine the 'best of the best' in the next 40 years.

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