“ hierarchical top-down style of management is ‘industrial age’ and being replaced by self-managed teams“
The Grid: In recent times, CEO life cycles are averaging less than four years. How can leaders optimize their shorter tenures in a VUCA (volatility, uncertainty, complexity and ambiguity) reality?
Ed Capaldi: The average lifespan of a CEO or an organization, for that matter, has never been shorter and continues to shrink. In these times, leaders who recognize that industrial-age strategizing is dead and develop an agile mindset will optimise performance and will have a greater chance of surviving longer in the role. Disruption across industries requires leaders to be a ‘game shifter’ focused on delighting the customer and able to make people want to do what must be done. In other words, it is about having the ability to deviate from past practices and adapt to change.
The Grid: How specifically can CEO’s ‘go agile’?
Ed Capaldi: First of all, today’s leaders must learn to be less ego-centric and more inclusive. That means surrounding themselves with smarter people, who can understand and process the barrage of information and misinformation out there. They must also be focused on customers not shareholders
The Grid: And how should these smarter people be organized so leaders can get the best from their people?
Ed Capaldi: An agile mindset means that, as CEO, you are prepared to move away from what we have traditionally regarded as ‘management’ or a centralized ‘command and control’ way of thinking to a style of leadership that is able to transform groups into high-performing agile teams. More specifically:
- Create teams that are lean and accountable and not based around a centralized function. An example of this would be Urbanise or Riot Games
- Develop an environment that encourages feedback and nurtures collaboration instead of one which is competitive and toxic. Both Microsoft, and GE have embarked on this journey, in Microsoft’s case the transformation is 8 years young
- Promote transparency, self-management and allow teams to act and perform. Do not micromanage .
- Establish a collective purpose and encourage ownership with a focus on delivering value.
- Reward shared success and jointly share failures
In essence, it is about building stronger customer centric teams that work well together, who have clear leadership. That way, as ‘black swans’ enter the environment, the organization is better equipped to deal with them. A black swan, popularized by author Nassim Taleb, is a random happening that is difficult to predict. In a VUCA world, black swans such as cyber-attacks or technological disruption, are becoming much more frequent.
The Grid: To sum up, hierarchical top-down style of management is ‘industrial age’ and being replaced by self-managed teams of smarter people who are given stronger incentives to perform. How else can CEO’s optimize performance during a shorter tenure with a lot more complexity around than before?
Ed Capaldi: There is no need to add to complexity by making things more difficult to understand. Keep things brutally simple. Realistically, a strategy plan can be confined to one page or KPI’s reduced to a handful. That way, goals are more easily understood and strategy has a better chance of being executed. You can better make changes when there are fewer things to amend, and set 90 day Objectives and Key Results
The Grid: If indeed CEO’s have such little time to prove themselves, how else can they avoid the usual obstacles, drains and distractions that derail a business or flag problems too late?
Ed Capaldi: They have little time to prove themselves because they are failing to adapt to the VUCA reality. An agile mindset ensures they respond to change more quickly. Statoil, the Norwegian oil company, is a good illustration of agile thinking. They have implemented ‘Beyond budgeting principles’, where they have replaced annual budgets with budgeting based on value and not by time. Going agile means being able to let go and only keep metrics that matter. Google Bjarte Bogsnes and Beyond Budgeting to learn more.
This requires the willingness to approach planning in a radically different manner. We see such companies replacing strategic planning cycles and annual budgets with 90-day plans based on OKR performance management, then turning these OKRs into reality by applying the discipline of SCRUM.
Instead of annual planning that is calendar-based, it is more ‘value-driven’. The assumptions that annual planning are based on, are more likely to become outdated as shorter planning cycles that have a stronger link to strategy allow for strategic pivots in direction that can be rolled out immediately, effectively. This way, organisations become more disciplined and are able to adapt smarter and faster when needed. It is about taking everything as a learning and the willingness to fail, learn how to deal with mistakes and reset. As in the lean start up guide’s ‘build measure learn’ feedback loop
The Grid: So in summary, the effective CEO in a VUCA world lets go of ‘industrial age thinking’, which is hierarchical tied to annual planning and focused on delivering shareholder value Given today’s shorter tenures, leaders are best-advised to build customer centric strategies, surround themselves by smarter people organized in self-managed teams working with shorter planning cycles where failure is part of the learning and success is shared.
Ed Capaldi: It is all experimental right now but what is certain is that doing the same thing over and over does not produce results or allow for the flexibility and adaption that a VUCA world demands. Fostering an agile mindset is to instill a way of thinking that becomes a way of life to adapt, change and stay relevant and competitive. Build, Measure, Learn yourself to success.
This is an extract from an interview with Ed Capaldi, Strategic Catalyst & Agile Business Coach.
Ed Capaldi, The Growth Catalyst, is a Strategic Advisor & Business Coach supporting high octane CEOs & Entrepreneurs accelerate through the chaos of a disruptive age, turning vision into action & strategy into sales to achieve a 10X-ing of their business.
Interview by May Khizam, Founder & Chief Strategist, The Grid Media Ltd
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