Companies must re-examine leadership in light of the new normal

Roger Philby, the chief executive officer and founder of London-based talent management consultancy The Chemistry Group, explains why the unprecedented disruption caused by the Covid-19 pandemic is forcing organisations to re-examine their leaders. 

For a while, the term ‘business disruption’ has fallen into popular discourse with leaders looking for ways to accelerate and scale business transformations, be more agile, wipe away outdated practices and create better more adaptive business models to thrive in the 21st Century.

After trying to create disruption internally for so long, it was something of a rude awakening when the biggest single disruptive force of the century (so far) came from outside. Almost overnight our context has changed entirely due to Covid-19, which got us thinking, are the leaders we need in our business now the same as the ones we started looking for six months ago? Now more than ever it’s vitally important to ensure that you are choosing the right leaders for your current business context.

The Chemistry Group has been profiling high performing (and, as it happens, low performing) leaders for nearly two decades. Part of the process involves using our experience and an extensive data set to define the critical traits and behaviours for leadership success, based on the business context. And context is key here because when trying to predict future performance, context is everything. It’s why we have always maintained that previous experience is such an unreliable predictor of future performance. 

Think about it; when did you last fire an executive because they did not know what to do? You hired them precisely because they knew what to do, my issue is that they probably didn’t do it in the current context of your business. The leadership of Winston Churchill is probably one of the best-known examples; seen as a brilliant wartime leader, the country rejected him as a peacetime leader. So much of leadership is situational, an ability to excel in a given context or environment – and then fail in others. 

Leadership is situational

A few years ago I concluded to a chairman that he’d have to replace his entire executive team. What no doubt surprised him was that the particular team I was referring to had in the previous four years turned around two big organisations, delivering fantastic value for investors and the group. Incredible achievements, and yet here I was telling him that it was time to shake things up. Within 24 months the team had gone on to confirm my worst expectation. Why had I been so confident they would?

The team had been hand-picked to deliver the strategic and commercial objectives of a specific context; that of a privately owned and broken business where taking outsized risks and batting for outsized returns were rewarded. But, entering the FTSE 100 required something else, that particular executive team were unable to adapt their behaviours to the changed context of a company heading for the FTSE 100.

Context is the overwhelming principle that guides our work at The Chemistry Group. Good leadership isn’t a one size fits all, it appreciates the changing context and while it’s situational, it is just as much influenced by behavioural factors. Through our work with James Allen [a partner at Bain & Company] around understanding ‘scale insurgency’ and micro-battles we identified that people, broadly fall into three communities:

• Disruptors – those generating new or innovative ideas
• Scalers – people who “industrialise” innovation into new practices and process
• Executors – the people who turn ideas into business results

Or to put it another way (and we are paraphrasing here) if Executors are asking “what do I need to be doing” and Disruptors are asking “why are we doing this, is there a better way?” Scalers are opening a conversation with questions like “Which of these ideas is the right one and how do I turn it into something that makes sense for the Execution community.” 

“Given the seismic change in context over the past months, the today’s leaders may not be tomorrow’s leaders.”
_{– Roger Philby, CEO of The Chemistry Group}

Accelerating transformation

Given the seismic global events of the last six months, many companies from Walgreens Boots to HSBC have announced that they are instigating or accelerating transformation plans. It is likely that this external disruption has been seized upon by the Disruptors in organisations. They will have embraced change, innovated, continually pumped out new ideas about new ways of working.

Further reading: 12 macro-economic trends creating post-covid's new normal.

It is also a fair assumption that the Execution communities feel a little adrift in many cases. Things changed overnight without design. Creating a rapid, largely improvised set of working practices and playbooks retrofitted to the current situation on the fly. It is also a fair assumption that the benefits of any new practices and mindsets have yet to be scaled effectively across organisations. So, at Chemistry, we would hazard a guess that if you are looking for leaders in your organisation right now, you may well be looking for those harder to spot Scalers in key positions.

Of course, people don’t fit neatly into just three categories, and these three broad communities overlap. For each executive leadership role, there will be a clear set of criteria that the best candidate will have to meet in order to succeed, and given the seismic change in context over the past months the leaders you should be looking for now are unlikely to look the same as they did in the pre-Covid-19 era.

For if you don’t appreciate the changing context, even the best leaders are doomed. Look at old Winston Churchill.