This article discusses the challenges of modern leadership. Successful leadership requires adapting to rapid shifts in the business landscape, where there is no precedent. Leaders must focus on developing "substance" by basing their strategy on a term of reference close to their personal values and legacy. This will allow them to guide their organization with conviction through an evolving environment. Key social and economic indicators suggest the current phase requires "age of substance" where organizations demonstrate transparency, authenticity, and speed in order to earn consumer trust and punish those who do not live up to expectations.

1. d er ’ s L e g
ea a
cy
AL
:
?
Ar
e
se
yo p o
u fi ur
t for p
www.criticaleye.net 01

2. Leadership is hard work. While you’ll find many words of wisdom,
tools and techniques, and practical applications focused on improving
leadership skills, all are empty if not implemented with both substance
and passion. In this article Charlie Wagstaff, one of the Founders
of Criticaleye, outlines the shape of successful, modern leadership.
The challenge for any leader, when What are the indicators? Community Comment
setting the organisation’s strategy, is
to accept that the business landscape There are some key social economic shifts Tim Smit, CEO and
has no precedent and is rapidly shifting. that clearly indicate the transition we are Co-Founder, The Eden Project
Therefore, the leadership style and undergoing, and that will continue to
A legacy is the work you have enabled to
approach must respond accordingly. It challenge the way leaders will need to act. As take place that has improved people’s
really is Darwinian – survival of the fittest. a leader, you have obligations (for which you lives. More than this, it’s what those
are under increasing scrutiny) that go beyond who have worked with you would say
To navigate this evolving landscape the short- or medium-term. These are: of you, in terms of how their lives have
effectively, any leader seeks a term of been enriched through that experience.
reference and focus on which to base their Consumer awareness – Savvy Many corporations actually infantilise
strategy. This is called ‘substance’. If it is consumers will no longer be readily their members rather than giving them
the confidence and freedom to work as
to be achieved with conviction, it needs taken in by superficial brand positioning
independently as they need to. A great
to be close to your personal DNA and or public relations initiatives.
leader fledges the people that work
bound by the legacy that the organisation around him or her to encourage them
- and you as a leader - needs to create. Take BP. The Gulf of Mexico spill in 2010 was to take responsibility for what they do.
always going to be a serious crisis for the
company. What doubtlessly exacerbated
Community Comment
the feeling against BP was their overt ‘nice’ those who ran the firms, the individuals who
Paul Polman, CEO, Unilever image. When you change your logo to a ran the CDO ‘machines’, or the investors,
flower, you give a clear impression of your fostered behaviour that, while not illegal,
stated intentions as a ‘green’ company. was certainly morally questionable. The
The main thing for a leader is that they
can be themselves and be driven by an Looking back at BP’s brand transformation, unravelling and subsequent bailout of
inner compass and guidance that is it was in the 1990s, ‘the age of image’, the banking financial system has meant
more important than anything else. If when BP dropped its old name, ‘British that financial institutions in particular
your values – your personal values – are Petroleum’. The second phase (from 2000 are experiencing tighter regulations.
aligned with the company’s values, to 2010) was the ‘age of progress’, when
you’re probably going to be more companies made ethical behaviour a point As business leaders, having access to large
successful longer term than if they are of competitive differentiation. I believe that amounts of money, both personal and
not. If they are not aligned, then you the current phase is the ‘age of substance’. commercial, disassociates you from the
are simply acting the role, not living it.
‘majority’ and, by logical extension, from
I see leadership very simply: a leader
is someone who positively influences Now take Toyota. In the era of online social reality (80% of the wealth is owned by 20%
people and, for me, there are many media, where the public has so much of the population – an often cited Pareto
mentors for this from history. Gandhi, access to information and can share it principle). One way of tackling this and
Mandela and Mother Teresa, for example, and comment on it so rapidly, consumers providing a ‘reality check’ is by setting up a
exhibited an unselfish form of leadership punish those businesses that don’t live up charitable foundation, and many companies
that is very appealing to me: they put to expectations. Toyota’s disaster was not do this irrespective of their size. Extreme
the interests of others ahead of their so much the accelerator issue but rather examples can be found in the global brand
own. The Dalai Lama said that, if you the perceived culture of denial and desire Microsoft, which has the philanthropic Bill
seek enlightenment for yourself just to
to sweep the issue under the carpet. and Melina Gates Foundation, while private
enlighten yourself, then you miss the
purpose. But, if you seek enlightenment equity-backed software experts Sumerian is
for yourself by helping others, then Companies must demonstrate sheer a founding partner of the Johari Foundation,
you are with purpose. This is the style transparency, authenticity and speed - all a UK based charity which aims to eliminate
of leadership that we increasingly qualities that BP and Toyota had seemingly long term poverty through social enterprise.
need in today’s world and, for my own lacked. Wrapped up in this is ‘worth’ - and
legacy, I would hate to be remembered its monetary relationship. Short-term Global business and communities
for building market share, but rather systems of incentives, such as those found – Global business has the power of
for making a difference in society. in the financial markets, whether it was choice; it can largely choose to ignore
www.criticaleye.net 02

3. corporate citizenship that meet employee
Community Comment
expectations, while marketing concentrates
John Whybrow, Chairman on aspects that enhance image and
Wolseley plc build brand. Yet what is needed is for all
parts of a business to exchange ways in
Two years ago, the business world
which good practice can enhance all of
was entering a difficult phase:
the objectives, for the medium- to long-
markets falling dramatically, banking
structures disintegrating and values term benefits of every stakeholder.
being questioned. My own company
in plumbing and building materials Generation engagement – As we
distribution was particularly hard hit, move through life, each generation
our various markets around the western becomes ‘smarter’, more technically
world down by anything between 20 adept, has greater expectations, and
per cent to - at worst – 85 per cent. As more worldly. Interestingly, each new
chairman, I could see the organisation
generation seems to push the barrier
losing confidence. By this, I don’t mean
further. A summary of some common
that the markets were losing confidence
in Wolseley but rather that the company’s themes that seem to have evolved are:
leadership was losing confidence and
this was permeating through the whole • ife is not all about work Life should
L
organisation. However, a change in be about being happy, giving back to
leadership restored that confidence others and having fun. If you are a leader,
within months. Markets can be benign, and you are just focusing on work, then
booming or collapsing, and leaders have something isn’t right in your life. The
the task of finding the right path through
younger generations have watched
whatever the external environment
their parents ‘work their fingers to the
brings. It may be the maintenance of
an internal culture of finding solutions bone’, and they don’t want any part of
locally through to giving strong it. They know how to use their networks
direction in identifying and exploiting and technology to get a 60 hour-a-week
opportunities corporately - even though job done in 30. This challenges what
significant costs may need be removed. constitutes ‘a good day’s work’.
In good times, they need to ensure
confidence does not turn to arrogance. •
Keeping up with current trends and
Leaders should leave an organisation
technology is a must for success Social
feeling proud of what is being achieved,
networking, blogging, podcasting or
no matter what the external environment.
sending tweets is now the norm. If
you want to be an effective leader, you
the interests and concerns of others, must be willing to use the most current
or it can recognise them and discover tools to your and your organisation’s
new means of creating value, while advantage. If you are not keeping
simultaneously serving its own interests. up, you will be seen as outdated.
Arguably the influence of global
corporations has shifted power away from
local communities to distant boardrooms. The most significant
Not only do these organisations have
the ability to undermine the will of
elected local and regional governments,
contributions leaders
but also those of powerful states.
With this have come the destruction of local
are required to make
environments, and the erosion of distinct
national cultures. Equally, global business are not to the bottom
can be perceived to play developed and
developing countries off against each other,
to secure better short-term conditions
line but to the long-
for investment in developing countries
through lower environmental or labour
standards, taxation and regulation.
term sustainability of
To overcome such short-termism, individuals, communities
you must ensure that good corporate
citizenship is built into all aspects of the
business. Even where good practices
and institutions that can
exist, they tend to be segmented: human
resources will concentrate on aspects of adapt, prosper and grow
www.criticaleye.net 03

4. • uilding relationships is key to a
B
Community Comment
leader’s success Leadership is most
Alan Parker, CEO successful by being in the ‘middle
Whitbread plc of people’, interacting with every
stakeholder on your value chain, from
A CEO’s role is to create the environment
your customers to your board to your
in which his/her team can deliver high
suppliers. Developing relationships
performance and the foundations for
long-term success. Constant openness with people takes time, but is worth the
to learning is important and I learned at effort. After all, people follow brands
Harvard Business School that, in the end, and leaders based on whether or not
everything comes down to one thing: they like them/you. So, the question
people. It’s about listening to customers, is ‘Do people like you?’ If not, then
building relationships with stakeholders, maybe it’s time to find out why.
understanding motivation and creating
the right culture for employees to
While the older generation is largely still
flourish. No one prepares you for when
running companies, the younger, for many
you become a CEO and, at Whitbread,
I had to take some tough decisions, organisations, is their best chance of
particularly in the early days. When I ensuring it can understand and respond to
became CEO, Whitbread was a company its customers and continue to have a legacy.
of ten different divisions. Now, we are the These individuals are the ‘natives’ of the
UK’s leading hospitality group because digital world and networks are in their DNA.
we took the difficult decisions to exit That said, how do you manage a generation
from pubs and breweries and focus our that looks sideways rather than upwards
business on the engines of real growth
for inspiration? And how will these ‘flatter’,
– budget hotels, restaurants and coffee
less hierarchical organisations perform?
shops. As I retire from Whitbread, I am
most proud of how the team has created At the Brazilian engineering firm Semco,
the well positioned company it is today, employees decide how much they are
with customer focus at its heart and paid and what hours they work. Its
exciting opportunities for future growth. Chief Executive, Ricardo Semler, values
autonomous business units driven by
• etting and giving feedback are critical
G peer pressure, not bureaucracy. At Cisco,
for development Youth clearly signal they CEO John Chambers has reorganised the
want to know they are on the right path. company, from a command-and-control
They want to know how they can do their job operation into an empowered network
better. They want to know they are moving of councils and boards. These flexible
in the right direction. Doesn’t everyone? units are backed by a financial incentive
Organisations need to move towards a system and an ever-improving set of
facilitating/coaching culture where feedback custom web tools, such as blogging.
is given every day. Feedback feeds growth,
empowerment and a more informed service. Reputation and culture – With a greater
global spotlight on the reputation of
organisations, companies are considered
Community Comment responsible for their own actions as well
Darryl Eales, CEO, Lloyds as those of their suppliers and all those
Development Capital it interacts with or impacts. Their ability
to cope with this responsibility is tested
The critical thing about being a CEO is daily; wishful thinking, naivety, and
to know yourself; you must also know in
even standards of legal practice can all
your heart that you want to lead and be
lead to good intentions going awry.
sure that your interests are absolutely in
line with those of your company. If that
is the case, then people will generally The majority of companies intend to
follow you; if they doubt your motives, operate at the highest standards of
then they generally won’t. You can only integrity. Most have strong ethical
lead people if they choose to follow, so guidelines for themselves and their
I don’t think you can be told that you suppliers. Many of these are written into
are the leader – you either are or you contracts. There is though a reliance
aren’t. The thing that occupies me more on written standards of conduct rather
than anything else is how to build a
than a focus on the conduct itself.
sustainable business – one with a clear
succession. In every business, a key role Standards of conduct are there to protect
of the CEO should be to consider the you legally, and almost never control
long-term strategic objectives for the behaviour, unless they are quite specific
business and, within this, and possibly and are enforced and believed by those
of most importance, how to develop a who implement them. The culture of the
team that can maintain the growth of the organisation dictates the behaviour, and
business when the incumbent moves on. this is ultimately set by the leaders.
www.criticaleye.net 04

5. Stage One
Community Comment
• cknowledge that you are the value
A
Helen Alexander leader. The buck stops with you.
President, CBI Believe in it and be passionate
• nderstand that your role is to
U
A leader’s legacy lies in the change
communicate the overarching
they have effected - change that keeps
purpose and framework that
the organisation vibrant and healthy. It
is underpinned by a set of
should be change that is in tune with the
shared values
environment inside and outside, so that
• eflect the values, and the
R
the firm is well-positioned for the long-
notion of being valued
term. But it’s also necessary to have the
• ntimately know your consumer’s
I
talented people who can take the firm on
motivations, vulnerabilities and
to the next stage; that means finding the
triggers for negative emotions
best people, developing them, and being
clear about the succession after you.
Stage Two
• ive ‘space’ and resources and
G
What are the ramifications ensure you are approachable - create
for leadership? safe environments for sharing,
and democratise innovation
Where can you find the right moral compass • nderstand the business ecosystem
U
to lead, guide and protect a company’s and be outward looking
legacy? Above all, a strong and clearly • reate a vision-driven team and help
C
understood ethical conscience needs to them see the organisation’s potential -
exist across the entire organisation, from examine inward before acting outward
top to bottom. Leaders must continually • ave three strategic plans - a long-
H
set the framework for this standard and term plan, a three-to-five-year
act in a manner consistent, not only with plan, then your annual plan
policies and practices, but also according • ncentivise your top team to achieve
I
to a strong personal value system. long-term issues – it will filter down
• reate teams and environments
C
This is right across the whole organisation where everyone is destined to win
and, indeed, all its stakeholders. And each
needs to be able to challenge the other Stage Three
without fear of the consequences. It seems • onstantly challenge what
C
so simple, but many organisations struggle success looks like
to subscribe sufficiently to this high level of • now how to balance managing by
K
open communication and transparency. influence and managing by authority
• on’t build more followers, build more
D
Self-reporting is one of the best ways of leaders. Ensure the success of those
ensuring that you and your suppliers engage around you - plan and train successors
in actions that truly reflect the behaviours and position others to succeed
your ethics promise. It helps you to scour • hen determining costs, price true
W
your world for adherence in the same long-term costs and ‘externality’,
way that a successful consumer company ie cost of capital plus carbon
continually ‘mystery shops’ itself. It puts
into place consistent measurement and Finally, take a look
communication that lets constituencies in the mirror
know what standards you expect, how you
will maintain performance and that you will To espouse whether you are truly ‘fit
point out ineffective action when you find it. for purpose’ - transparent, energised Charlie Wagstaff
and confident in your belief - your Co-founder Managing
Arguably the most significant contributions leadership style must be consistent Director, Criticaleye
leaders are required to make are not with who you are and your own DNA.
therefore to the bottom line (this is And this means being authentic.
Charlie’s diverse background gives him
taken for granted) but to the long-term in-depth understanding of the challenges
sustainability of individuals, communities As Gandhi said, “Be the change you and development issues facing today’s
and institutions that can adapt, prosper seek.” You should understand what it is leaders. He believes that an organisation’s
and grow. If only a short-term view that you are passionate about because, longevity and need to innovate can only
is taken, then you will only be on a to be successful as a leader, you can only be achieved by encouraging leaders to seek
constant rollercoaster ride. A behavioural lead from the ‘heart’. After all, when constant change within an ‘inspirational’
mindset has got to be adhered to. you look at your organisation, you are framework; he is a great believer in Ghandi’s
mantra, ‘be the change you seek’.
really looking at a reflection of yourself.
As a leader, there are three clear
Contact Charlie through www.criticaleye.net
stages to achieving this: © Criticaleye 2010
www.criticaleye.net 05