This decade is already proving to be much more intimidating to the status quo than the previous three or four decades at least. And disruptive forces are challenging leaders in new ways across different industries. In the energy industry for example we are having to navigate three major transformations concurrently: the energy transition, the digital revolution, and diversity and inclusion (D&I). Environment, social, and governance (ESG) are top on the agendas of major industry players globally. Much of this has been expedited by this year’s events, especially the COVID19 outbreak and the growing concern about racial divide issues.
Building our transformational leadership muscle is now a ‘must have’ for those who are looking to pivot their businesses for wining in a disrupted reality. Leaders that had already aligned their overall visions with the digital revolution have been better able to run operations more effectively and efficiently during lock-downs. The resultant relatively safe and stable experiences for employees and customers in turn translated to favorable financial outcomes. Likewise, leaders that had already developed strong D&I brands for their organizations had better chances of avoiding the negative implications of perceptions about their bias on their sales and financials. And, oil and gas industry leaders that had already pushed their energy transitions/ESG visions forward probably felt more optimistic about the future of their organizations in the face of the recent oil price shocks.
But what does it take to excel as a transformational leader? And what traditional mindsets block the realization of transformational visions?
Top Transformational Leader Traits
Throughout my experiences in patterning with transformational leaders, I have observed that those who are able to excel in orchestrating major organizational shifts share five traits:
- Influential and engaging. Transformational leaders understand very well that they can’t go it alone. Their success hinges on their ability to engage stakeholders around common visions and well aligned strategic roadmaps. This may require a different balance between command-and-control and collaborative leadership styles compared with what worked in the past. In addition to securing buy-in and commitment to the vision, an effective stakeholder engagement approach establishes a safe environment for feedback solicitation, and innovative idea generation.
- Perceptive and insightful. Transformational leaders are insightful observers of events and developments within their businesses, industry sectors, and the wider economy. They tend to be highly talented in connecting the dots, realizing trends and identifying opportunities prior to others. They don’t have to be subject matter experts (SMEs) themselves but they know how to engage SMEs and translate their analyses and opinions into commercially relevant insights and drive results accordingly.
- Adaptive visionary. While being visionary is a valuable leadership trait in general, leading through transformations calls for a different type of visionary, the adaptive visionary. The adaptive visionary makes it a habit to check their vision against major internal and external developments as well as the views of experts and thought leaders within and outside their organizations. The highly disruptive nature of our times calls for dynamic rather than static visions and supportive strategies. The adaptive visionary is able to imagine and re-imagine the future under different likely scenarios as soon as early signposts emerge or are brought to their attention.
- Commercially–driven. Many major projects and organizational change efforts end up running above budgets and schedules. I am sure some of us feel that most if not all transformational initiatives miss their deadlines and exceed their budgets. They may also place pressure on the financial performance of the organization’s core business by leaning on its resources. Keeping an eye on the commercial priorities of the core business is top on the transformational leader’s list. In addition, understanding and managing the direct commercial outcomes of the organizational change under different potential constructs of the future is foundational for their success. This includes adopting solid approaches to identify, quantify, and mitigate risks in the short-term let alone the long-term.
- Strategic risk taker. Massive transformative disruptions naturally bring new and completely unimaginable risks, some of which are actually hidden opportunities. Winning takes leaders who are not only proficient in identifying and navigating risks but also make some bold strategic choices. They understand that the risk of inaction can be much higher than the risk of action in disrupted world. Strategic risk taking at the top is also important for inspiring a culture of creativity and innovation across the organization.
Regardless of the scale of the disruption and the nature of the journey, my clients and I find ourselves leaning more on these traits as we partner on leading successful transformations. Pivoting into new modes of growth takes a dynamic approach to balancing these five traits, while constantly prioritizing effective stakeholder engagement and teamwork. I hope this is not a surprise!
Top Leadership Mindsets that Block Transformations
Over the last decade, I have had many opportunities to partner with leaders on achieving their ambitions to pivot their businesses into growth in a disrupted industry. This included supporting energy transitions visions, evolving analytics to elevate an organization’s brand along its value chain, and redesigning structures and roles to prepare for major transformations. Throughout my experiences I have identified five legacy leader mindsets that tend to block transformative efforts:
- Direct returns-based assessment of new initiatives. In many instances, leaders find themselves working too hard to protect the successes of the past. This mindset only considers the direct revenues of new initiatives and ignores highly likely risks to core business revenues as the wider economy transitions away. It also ignores other opportunity costs associated with unfavorable transformation outcomes for conservative leaders compared to bolder competitors. Being outpaced by competition is one of the easiest ways to to hurt your brand and your core business results.
- Deterministic leadership cultures. This is somewhat linked to the first mindset. In an industry that had historically been lucrative like O&G for example, a deterministic mindset that assumes the continuation of past trends could easily become the norm. As major transformations unfold, long-term trends are constantly disrupted. Deterministic mindsets can lead to the handling of disruptions as short-term inconveniences rather than lasting shifts. This can easily result in facing the risks of a transformation without sufficient preparation and missing out on its biggest opportunities.
- Traditional competitive assessment. When I ask leaders about the competitors to consider when re-envisioning their future, they mostly list their past competitors. In most of the cases and after a little bit of digging, my clients and I find some big surprises. Traditionally, their competitors were entities that provided similar produce and services to theirs. During major disruptions, most players are transforming their businesses and customer mindsets are changing so rapidly. New competitors emerge, potentially doing very different things but customers could easily be putting them side by side with some traditional offerings for picking a winner. Understanding who competes for your customer’s attention during a major transformation is paramount to success.
- Job description orientation. This mindset is common among leaders with a track record in climbing the corporate ladder and typically aspiring for the next move up. During transformations, they struggle with the lack of clarity and their struggles become contagious across their teams . This is a first for us all! And no job description or annual objectives will spell out what it takes to come out on the winning side of the energy transition, digital transformation, D&I transformation, or even the COVID19 disruption. Regardless of the size of your team or business function, leaders could benefit from finding ways to thrive in uncertainty while staying aligned with overall corporate visions and values. Limiting your own imagination and creativity will only limit creativity and innovation within your team.
- And the winner is the silo mindset. This is perhaps one of the most common barriers to any organizational change effort. The ‘what’s in it for me or my team’ foundation for decision making and resource investment can therefore be extremely limiting. The transformations reshaping the future of humanity today are all intertwined, inter-disciplinary, cross-sectoral, global in scope and extremely large in scale. Leadership teams will float together or sink together. The desire to stick to traditional product or service definitions, organizational structures, and team boundaries is an implicit decision to struggle throughout the transformation and remain a follower of transformational leaders rather than one of them.
There are other mindsets that tend to block transformational breakthroughs. And like the five most common ones they are mostly related to the human tendency to stick to tried and tested methods. Consistently staying the course has its merits during more stable times. But when we are trying to chart a new path the balance will need to be tilted toward creativity, innovation, flexibility, compassion, and alignment.
Contact us to learn more about how we partner with executives to build their transformational leadership muscle and identify and make the necessary mindset shifts.