The Importance of Leadership “Vision”
Vision is an intangible but critical asset for a CEO to drive high performance.
WE
try and understand whether the top job is one that can be learned or
whether it’s even a profession one can be schooled in. In a series
of interviews with chief executives from Jeff Immelt to Bob Dudley
among many others, we found that a deep understanding of personal
values mixed with traits such as curiosity, ambition and passion
often lay the groundwork for CEOs to formulate effective "visions.”
But
how important is this quality in the top job? Vision is a popular
term these days, but the CEOs we interviewed shared a very specific
notion of a good business vision. For them vision is a continuous
work-in-progress, one of the major tasks of any CEO, which requires
time, effort, investment, experimentation and reflection. The company
vision should evolve as its business environment evolves, but it has
to be crystal clear at every given moment it time. This vision
provides the rest of the organisation with direction, meaning and a
benchmark for decision making. In academia Julio Rotemberg of Harvard
Business School and Garth Saloner of Stanford University, claimed
in a paper that
leaders who have “a bias in favour of projects that are consistent
with the CEO’s view of the likely evolution of the industry”, can
achieve greater performance.
Former Geox CEO, Diego Bolzonello, believes that vision is “really the main role of the CEO to understand which will be the future, what will happen in the market, which could be the space that you could get in the market, etc. That’s a very important point, to select where you have to go, and to transfer it to the management."
Always
learning
To
keep a company’s vision current every CEO needs to continue
learning. Our experts agree that this learning should go beyond the
industry and beyond business and take on global dimensions. Jeff
Immelt of General Electric told us, “You become a CEO not because
of what you know, but because of how fast you can learn, and that’s
something that people don’t always understand. There is a
projection of what the world will be like in 5, 10, 15 or 20 years,
and can a person continue to meet that change as time goes on?"
Bolzonello
adds, “After you become a CEO, keep an open mind. Read books, watch
news, listen to the music, and speak to young people. Pay attention
to what is happening. Keep track of the times.” Our experts also
confirmed that they continue to learn from their parents and pick up
interesting ideas and tools from their children, including young
ones.
Vision
as people enabler
Vision
is the piece of the CEO’s job that cannot be delegated, but most
other organisational tasks cannot be performed by the CEO alone,
which leads to another critical competency identified by our experts
– selecting people. Experience-based intuition, genuine interest in
people, time invested in understanding them and courage make the
trick. "When selecting new people, they have to be better than
the CEO in a particular skill”, says Diego Bolzonello.
When
right people put into the right positions they can create miracles
provided they operate in the right working environment which the CEO
has to create and maintain. Our experts did not use the catchy
phrases such as “empowering people” but spoke of “enabling”
them. Enabling CEOs try to keep it as simple as possible and
continuously fight organisational complexity in all forms, make as
few decisions as possible, do not meddle with office politics and
power struggles, challenge the followers by setting high standards
and asking tough questions and support them by providing resources,
attention and mentoring.
They
also energise the whole company, as Stefan Messer, CEO of the Messer
Group put it. An effective CEO, he says, makes ‘Christmas for
everyone’ in the organisation. Social intelligence plays a role,
but our experts also referred to a variety of contemporary
communication tools such as videos, twitter messages, work-out
sessions, town halls, walk-abouts, e-mails and traditional memos.
Visionary
but visible
But
in playing visionary and architectural roles, good CEOs also keep
their feet on the ground and are ready to roll up their sleeves at
every moment. Our experts stressed that the ability to manage through
tough times is indispensable for an effective business leader. While
in good times ‘the biggest mistake of a CEO is to try to put his
hands deep down the organisation’ at the times of crisis she should
act.
Since
crises are inevitable, each CEO should prepare for them, regularly
mentally rehearse a different behaviour pattern and quickly switch
the mode when the unexpected happens.
Immelt
said that “Over the last 15 years I became better at risk
management. I understand a little bit more about what could happen in
the world…I didn’t have that when I first became CEO. I knew what
I wanted to do, but I didn’t have 2-3 contingencies in case it
didn’t work. I became smarter about what they might be… and I
have learned that through experience”.
Foundations
for vision
During
our interviews, we also observed a number of characteristics that we
believe have a direct impact the effectiveness of their visions.
Champions:
All
our experts found appropriate moments to speak about their companies,
able to articulate their visions and achievements. Not only did we
feel the sheer passion of these individuals, but saw that their
personal ambition is merged into the goals of their organisations.
They appeared to be on a self-defined mission, rather than on a job.
Self-discipline
and efficacy:
Even
our super-busy CEOs were prompt to react to our requests for a
meeting and efficient in organising and conducting it. All interviews
except one started and finished on time, yet we managed to discuss
all prepared questions and even touched upon other subjects. Our
counterparts were fully concentrated, not disturbed by phone calls or
e-mails and delivered a lot of valuable insights in a short period of
time, but the minute our interviews were over they switched onto a
new task.
Health:
Business
leaders we interviewed did not speak about good health as an
attribute of an effective CEO, but they all were in a good physical
shape. From other interactions we know that they use very different
methods of staying healthy from early morning work-outs to special
diets, but these activities work.
Great
image:
Most
of our experts passed fifty, but they all look great. Well-tailored
suits and carefully-selected ties play a role, but most importantly
we felt that they care about positive personal image and make efforts
to project it. Each CEO we spoke with had his own style, but they all
left an impression of energetic, elegant and attractive people whom
one wants to meet again. Studies show that more attractive CEOs not
only receive higher compensation but also exceed in negotiations.
There is also evidence of a positive correlation between CEO
appearance and profits..
Curious
people, always learning and putting image in high regard, executives
aspiring to the top job should select an industry early on and make a
deep dive to learn it. Hard skills are indispensable for CEOs, but so
are inner clarity and a high regard for physical condition.
Stanislav
Shekshnia
is
an 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 Initiative.
Read more at http://knowledge.insead.edu/blog/insead-blog/the-importance-of-leadership-vision-3653#vT6uepmrs6GcY2XW.99
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