The Future-Ready Leader

Challenging world issues for business leaders: Responsibility, responsibility, and responsibility!

The socio-, geo-, and political contexts in which the firm finds itself shall always evolve. World affairs will tend to change, often dramatically and at a rapid pace. The COVID-19 pandemic and the Ukrainian war are just two examples. So, how do we deal with such events? How do we make sure to observe, analyze, react, sometimes even predict or foresee these types of changes, in order to be sure that we might withstand and perhaps even “master” this type of change? In this Part, we shall simply observe current world and political events and trends.

The author was the largest foreign investor in Russia, through his investment fund Hermitage Capital, capitalizing on imperfections in the Russian economy due to non-rational, at times even illegal moves by oligarchs and members of government. When such moves became exposed, there were inevitable reactions from the Russian government, perhaps even sanctioned by Mr. Putin himself. Not only was Mr. Browder expelled from Russia, but also some of his closest allies were put in prison, some even tortured to death. Russian courts ruled against Hermitage and Mr. Browder, dishing out huge fines based on false, fabricated evidence. Lack of predictability seems to be at the center of all of this. Humiliation of those perceived as threatening is also present. There is much brutality. Mr. Putin seems to be squarely behind it all.

To say the least, it is difficult not to agree that the world seems to be in a certain state of disarray. However, maintaining positivity and practicing solution—and opportunity—mindsets can prove beneficial.

Clarity of thinking is critical for today’s leaders that want to navigate the unusually complex environment they have to operate in. The classical waterfall process of planning will produce a plan, but we can be quite certain that we are failing to account for some unknowable unknowns quickly rendering the plan, if not obsolete, at least suboptimal. Therefore, we need to complement the planning process with a culture of healthy suspicion regarding the plan’s underlying assumptions coupled with constant experimentation.

So, with world spinning, with daily, sometimes hourly significant change in markets, and with often dramatically new customer demands on markets, what do we do? We may of course obtain some solace and assurance from knowing that life is impermanent—and in a flux, that change is constant—but we also need to understand how to act even react! Resilience can help, “paranoic optimism,” as Siilasmaa (2019) says. But specifically, what can we do? How can we as business leaders lead and grow through these storms?

The author makes the distinction between tight ways of managing and controlling in contrast to loose approaches. This could be applied to corporations (Daimler, Chrysler, Mitsibushi—tight, versus Microsoft—loose), as well as to countries (Germany—tight; France—loose) or even to regions (California—loose; Texas—tight). The author develops this distinction further, to distinguish between flexible tightness and structured looseness. There seem to be at least three classes of issues that could determine which side of this tradeoff to settle on: norms and preferences applying to oneself: am I cautious, controllable or rather adventurous and impulsive, and do I prefer good order or do I prefer less structure and more tolerance for ambiguity. For businesses that operate internationally in particular, to run operations relatively decentralized so that each country might be allowed to run itself in a fairly tight way, while other countries in the same firm may be run relatively loosely.

The need to think ahead is a key driver for the NRC organization and its Secretary General, and this manifests itself in four core areas where the NRC works: (1) refugees, relief, and resettlement; (2) stimulate impact investing by leading corporations, to create new job opportunities, for youths in particular; (3) fuel innovations in the humanitarian sector, by promoting new technologies and digital transformation, to enhance more efficient running of humanitarian organizations; and (4) better identification documents as a part of enhancing human mobility and fight corruption. NRC’s success is clearly linked to its organizational independence, not being associated with any country’s foreign policy, nor branded by financially driven biases from where its funds might be sourced.

Adapting a firm’s strategy to the external environment is perhaps an issue of being sufficiently open-minded, so as to squarely observe, capture, and reckon with critical shifts that may be more or less apparent. It is perhaps worthwhile to consider the most valuable corporations on Standard and Poor’s list of top ten, a generation ago versus today. Classic corporations such as Exxon, General Motors, and General Electric were previously on the list, but are no longer be found on today. High tech, software-driven firms have taken over. Why did Exxon and other energy-producing firms not see the shift towards the increasing prominence of alternative sources of energy? Why did General Motors not see the shift towards electric propulsion? Also, why did General Electric not see the shift towards asset light business activities? There seems to be one overriding conclusion when it comes to this, namely a strong propensity to stick to one’s traditions. To question this would typically not be on the agenda.

What is currently robbing entrepreneurs and managers of sleep? First and foremost, it is inflation. Inflation does not only affect price management; all functions are affected. Central, of course, is pricing power. Companies without sufficient pricing power run into trouble because they cannot pass through the cost increases. Purchasing also has a difficult task. Not only does it have to ensure favorable purchase prices, but in view of the supply bottlenecks, it also has to make sure that the required goods are available at all and on time. In other words, purchasing assumes a kind of overall responsibility under the prevailing conditions.

What is a business really? Why do we establish them? How can we grow our own businesses, or those we work for? Our efforts and activities can benefit from observing and learning from business success stories, as well as those companies who have struggled or failed.

To develop habit-enhancing products/services is an important approach for keeping competitors out—less brand-switching—and/or renewal rate up, less “churn.” Good to take away is to aim for a deeper commitment to observing the behavior and psychology of the customer, in order to be able to work it to the favor of the business. Are we really “creatures of habit?” Let’s look in the mirror.

This is a summary of a presentation that Dr. Hermann Simon gave at Otto Beisheim School of Management (WHU) on September 20, 2019. He argues that many of the relatively unknown, but no longer so small, German-based export companies seem to become and remain successful due to their closeness to the customers as well as a strong emphasis on quality. Business-to-business strategic settings seem to be particularly well suited for this approach. What may we bring away here is how steady, solid growth, and development can pay off. It is not always about being so visible, rather to commit to performance using a very practical, grounded long-term approach to business, sometimes discreetly, and understanding that time is an ally rather than a source of pressure.

It is not always simple to split the topic of business from strategy. You cannot have a business without a strategy. We might see from the wide span of foci in the books reviewed as well as in the executive interviews that there typically are many viable ways forward. We have chosen to split the two in order to provide a logical foundation for our discussion— namely, by starting with a look at the product or service offered by the organizations selected herein, we can then afterwards reflect on the firm’s strategic options. Strategy means choice (Lorange, 2005). And strategy is much more thinking and execution than planning (Lorange, 2009). So, as we move from a look at business to a discussion of strategy, let us acknowledge the necessity for clarity, structure, and foundations when establishing a business. An explicit, straightforward, and relatively simple sense of which strategy and direction to be taken seems critical. That seems to be a consistent “message” coming out of the book reviews and interviews alike.

This foreword describes ABB’s strategic choices and my experiences with the restructuring process of the Swiss-Swedish technology company that I am currently serving as CEO. It will highlight the leadership principles I truly believe in and that have been key in driving the transformation towards a more entrepreneurial company.

Now to the book reviews and interviews. This part discusses some key strategic options for businesses. We shall pay particular attention to how business strategies seem to be evolving and especially in today’s rapidly changing world. As commonly accepted, the first step in business is to define a strategy that sets the direction of business through its clear definition, goal setting, values, and purpose. Thus, we too shall begin with the topic of strategy.

How to scale up rapidly is being discussed in more detail, with a “warning” about factors that might derail this process, such as financial constraints and excessively detailed management processes. Seductive and exciting, scaling your business in a blitz intense way may get you to where you want to go. But beware the demands! It is not for the fearless.

Impact investing, particularly in the assets where the reduction of CO2 is achieved and/or intended, constitutes a core area of Staub-Bisang’s agenda. BlackRock is one of the world’s leading investment firms with the purpose to help people experience financial well-being and advancing sustainable investing. Mirjam Staub-Bisang (MSB) has been head of BlackRock, Switzerland, since 2018. Previously, she was with Independent Capital Group, Commerzbank, and SwissLife among others. MSB raised several important issues in relation to sustainable investing. The present executive profile discusses where MSB sees risks and opportunities of sustainable investing. For most of our readers, sustainability is a central concern or commitment, and the transition towards a nature positive future can be achieved through the careful and complete analysis of options before making the choice.

We have now read and heard much about why strategy is so important for business. Vision, direction, clear goals that are vocalized, and the idea that strategy is a fluid process have been shared here. Strategy should create or improve business performance, but establishing, embracing, and communicating strategy is no easy feat. Strategic planning requires data, analysis, time, effort, and a constant assessment. Everything is impermanent. Accepting this can help us evolve, both professionally and personally as leaders. And, as we have seen, creativity and originality are at the center of this process. Each of the persons featured indicate how they have been able to “spot” something truly original, which has then become the “raison d’être” of the firms they lead. It is this uniqueness that makes the differences, but realism is also key here—there seems to be relatively little difference between success and failure. To push for positive limits seems to be key!

Family businesses, or as we now say, family enterprises (because business families usually own several shared assets rather than one single legacy business), are evolving and changing every day. Large societal demographic shifts take place alongside internal family generational change to form a fabric of continual change for every business family. The concepts of resilience and reinvention have become the central focus for continual family enterprise success. It has been many years since families faced a business and family environment that was predictable and consistent.

To establish a long-term business focus is critical for any firm; hence, an approach taken from family businesses who are inherently good at this may be helpful. Many of the fundamental challenges facing business today call for such a longer-term focus. In privately held firms, there is often no need for short-term performance reporting. This Part focuses on the family-owned firm, usually privately held, and how it operates, invests, creates value, and generates wealth. The learning angle we wish to propose to all readers here, whether from family businesses or not, is to use experiences and information from entities in both related and unrelated businesses or sectors who excel at strategies based on future growth and horizons. In other words, let us avoid silo-thinking.

This relatively old book, though in many ways a classic, hones in above all on the critical importance of having a specific mission for one’s family business, thus allowing various family members to be effectively informed, even those who are not necessarily participating actively in the management of the family firm, and also including those next-generation members who might be uninterested. A clear articulation of a mission may make it easier for some of those initially less interested to step into management roles later, as well as to facilitate a smoother wealth transition between generations.

Carol Hübscher is the chairperson of one of the world’s leading art materials and writing instrument companies, with around 50% of its business from the artist sector and the rest from retail (office and private). The importance of quality and innovation are highlighted, both typical, it seems, for Swiss-based firms.

So, what are the main insights a family business may provide other family-owned or family-run businesses? Is it to maintain a sense of core values? Focus on the long term? Is it to do good, give back? And can these insights be useful to nonfamily businesses, regardless of size, geography, culture, and sector? We think so. Lessons are everywhere. What is important is to stay curious, look for inspiration at every corner, and use the experiences and perspectives of others when running and growing our own organizations.

How can we invest to maximize wealth? This is an important question for businesses as well as investor executives. Let us take a look at a few strategies and approaches gleaned from some investment experts. Their concepts and input can also help organizations and their leaders better assure long-term wealth maximization.

We have looked closely at a few family businesses and family business topics and can now move towards the vast and exciting discussion of investing to maximize wealth, clearly of importance to all categories of firms, including, as we saw in the previous chapter, also for family firms. Although an enormous topic and, at times, very subjective, there are certain investment strategies that appear to be more successful than others. Issues such as risk propensity and appetite for this, choice of different investment vehicles, picking investment advisors, and so on, are all important elements of the overall investment decisions you could face. Understanding the complex world of investing is critical in order to achieve growth.

This book discusses how leading bankers seem to deal with issues such as risk and chaos. A total of twelve axioms are provided for how these leading bankers appear to operate. Positivism and optimism are seen as especially important.

Martin Stadler’s interview unveils the importance of involving banks in constructive ways when it comes to investing successfully. For business-to-business, the players include investment bankers, in contrast to business-to-consumer, whereby we speak of banks that provide portfolio transparency, something typically offered by most commercial retail banks. It is a matter of being actively involved as a partner with specific resource persons acting as counterparts in both of these types of banking institutions.

Investing is complex, yes, but can be made simpler by pushing hard to stay focused and linked to your investment strategy and goals. We have seen the importance of diversification, constant reviewing of the portfolio, and continuous learning. Investment mistakes to not make—trying to time the market, fallacies of staying too narrow, paying too high fees, not choosing the right employees or talents to back up one’s investments, pitfalls regarding over- as well as under-investing, “dragging one’s feet” and thus not exiting at the right time—were all key.

When it comes to running a business, my late father and my late husband followed a technique for success that can work for you. Who were they and what is this technique?

The persons who actually run the business are obviously utterly important. We often speak of “top-down” management and, in some cases, even “bottom-up.” The main point is that people matter, whether they are at the top of an organization or further down. Leaders especially play a major role in the way a firm at hand is driven. Their business-self matters, as does their personal-self! This latter point shall be covered in this next chapter.

This book chronicles the famous win by the US “eight rowing” boat in the 1936 Olympics in Berlin, a foot or so ahead of the German boat and another foot ahead of the Italian, after having completed a distance of 2000 meters, with Hitler himself in the stands. It seems to be a matter of six key issues: focus on “me” and on the team; a shared culture, the coach’s instrumental importance; the ability to sustain tough periods; to stand up for each other; and confidence in a strong social network of support.

ETH, one of the highest-ranked engineering universities worldwide, has a clear strategy, and ETH’s leadership helps them to remain in this top tier. Entrepreneurship is key, attempting to create business opportunities from its many cutting-edge areas. To maintain its preeminent multidimensional focus is fundamental. A high degree of cooperation also seems to be at the center of ETH’s strategy, with industry, for example, in Switzerland’s world-famous pharma sector. This goes both ways. Cooperating with competing schools is also seen as mutually beneficial. In total, an open approach is driving its strategy, which is also manifested by ETH’s truly international staff and student body.

An effective leader is able to find a good balance between top-down and bottom-up aspects of leadership, i.e., between top-down actions closely associated with the leader him/herself, and bottom-up actions coming from the leader’s organization, typically stimulated by the leader. Let us discuss what is implied in each of these two sides of leadership.

Let me first elaborate on what I see as a fundamental motivation for me as a leader and individual, indeed a passion that has driven me in the past and still continues to inspire me to learn every day. And this learning should focus on the future, stimulate one’s thinking about the future, and help anticipate the future. In contrast, learning should not dwell on the past nor on mastering what is already established as known phenomena.

We just covered how critical the persons running the business are to ensure the success of a business. Let us take a deeper look at leadership now and move towards examination of the “self” of the leader. Is leadership a case of nature or nurture? Are we born leaders? Or can we grow to become good leaders? There have been endless dialogues about this issue, and even research— for example, testing children in psychological settings and following them through adulthood, even testing fish to see what we can learn about leadership in schools of following fish (Nakayama, 2013). Some claim that most leaders are extroverts, or bolder and more active (Campbell, 2019). Others say leadership can evolve, especially with positive feedback (Kuisma and Meltovaara, 2021). We may not have the answer to this dilemma, and it is probably a bit of both; however, we shall still be able to discuss how important keeping an eye on “self” is, as we take on more and more managerial responsibilities. And we shall see that it is key that we effectively cannot lead our organizations if we do not understand ourselves and do not take care.

To be curious seems to be central in this publication, and to be able to practice this in less structured settings appears equally important. The objective seems to encourage being bold enough to practice “questioning the question.” To properly focus questions requires patience and the ability to be creative. To practice the art and science of good questioning might lead to positive improvement of our businesses, and of our own lives as well!

Securing health and well-being has proven to be helpful to all individuals, and we shall even dare to exclaim that they are essential to leaders at the head of organizations. As airline safety videos so vividly show, “put your oxygen mask on before you help others with or around you with theirs,” you cannot lead without giving yourself the nurture and caring you deserve as a human being.

Business schools face a turbulent environment. The combination of the growing challenge to traditional forms of learning, whether it is for young adults or mid-career professionals; the influence of AI-based support systems; the rise of capable and professional EdTech companies, of which some deliver high-quality and high-touch degree programs; the emergence of predatory journals and conferences; the growing competition from Asian schools and universities, etc. render the environment in which business schools operate all the more unpredictable and volatile. How should academic leaders steer their organizations?

We wish to briefly come back to the beginning of the book when we first presented the concept of an accelerated process for business learning. We recall that first, a general realization that a topic is of interest or importance is identified. Then we suggested that the learner review relevant book reviews and executive interviews on this topic, in this book. At each of these short intervals, we recommend that the learner engage in the process of topic absorption—small pauses that may help to ascertain that the perspectives, insights, and inputs presented have been captured, reflected upon, and processed by the reader.