At a time when the cost of capital is essentially zero, the success or failure of a business is determined more than ever by its leaders. Have you got what it takes?
Our research into more than 3,000 teams, summarized in our book Accelerating Performance, found that top teams deliver 22.8% more economic benefit compared with teams that are laggards.
Some companies find even greater benefits: Google says its best-managed teams deliver 38% more economic benefit than lagging teams do. What differentiates the leaders of top teams from those that are lagging? Eight mind-sets separate the best from the rest.
I need to constantly discover patterns and connect the dots
An academic study found that, on average, 45% of a company’s profitability depends on external and industry events.
But unsurprisingly, most leaders focus on the 55% they can manage. To tap into the events that can’t be controlled, leaders should develop “ripple intelligence” by doing a top-down review of the trends and events causing ripples in the company’s environment.
Leaders who can sense what’s happening sooner can react faster and better than the competition.
My job is to optimally match resources to opportunities
Businesses assign resources to business units, which would be fine if the external environment stayed static.
So despite that resources assigned today will soon be out of phase with the market, units will guard their preassigned resources jealously.
Leaders need to build “resource fluidity” by focusing on three enablers: continually reallocating capital resources, keeping people mobile, and rigorously sharing and reusing resources.
How do I dissolve the either/or paradox?
Senior executives face many conflicting pressures. “Dissolving the paradox” can turn conflict into opportunity, but leaders must move up the usual modes (or levels) of thinking.
Level 1 thinking sees problems as binary. A level 2 thinker recognizes shades of grey and works toward compromise. Level 3 thinking looks for a mutually beneficial arrangement as opposed to splitting the difference. And level 4 thinking finds ways of making two opposing objectives not only compatible but also reinforcing.
Working through a traditional hierarchy takes too much time
Have you ever asked permission to make a decision in a hierarchical organisation?
Rigid leaders exercise control and power at every step, and control mechanisms, put in place to filter out bad decisions, add time. Processes are slow and frustrating.
To work around the boundaries of hierarchy and drive acceleration, leaders need to think not about a corporate ladder but about a corporate lattice - leading across boundaries and allowing autonomy in the workflow.
Doubt is powerful
Leaders do well when they exercise the power of doubt. The Persians used to make decisions twice: once while sober and once while drunk.
If the decisions agreed, they proceeded. If not, they deferred a decision. We’re not recommending drinking at the office, but the Persians ruled the known world for 300 years by combining their thinking and feeling sides.
CEOs who combine the two dimensions can embrace discomfort, distinguish constructive doubt from disruptive second-guessing, and better minimize risk and maximize opportunity.
I’m on 24/7, and what I do impacts every second
Grumpy leaders aren’t as effective. Daniel Goleman and his colleagues write: “A cranky and ruthless boss creates a toxic organization filled with negative underachievers who ignore opportunities; an inspirational, inclusive leader spawns acolytes for whom any challenge is surmountable.”
Leadership is contagious. A core skill in leaders’ tool kits is to be able to change their internal state to ensure that the contagion they’re spreading is positive.
Creating leadership is my goal
For four years, researchers at Stanford studied the performance of more than 20,000 frontline workers such as airline check-in and supermarket checkout personnel.
An analysis of six million data points showed that productivity increased by 12% if someone who had a poor manager was given a strong one. How leaders make decisions, have conversations, direct the actions of those they lead, and behave generate a chain reaction in those they lead.
Feedback is a gift
Accurately gauging how we impact others can be very difficult. When we asked one leader how he knew his people were empowered, he replied non-ironically, “Because I told them to be.”
Leaders need to find time to reflect on their impact on others and determine how to adjust their behaviors. Goleman and his colleagues write, “It’s not that leaders don’t care how they are perceived. But they incorrectly assume that they can decipher this information themselves.”
Fit for the future?
Getting all eight of these mind-sets right is only part of the puzzle. But they’ll at least get you started on the right path toward becoming the kind of leader that the future will require.
About the author
Colin Price is a partner in Heidrick & Struggles’ London office and a member of Heidrick Consulting.
 Daniel Goleman, Richard Boyatzis, and Annie McKee, “Primal leadership: The hidden driver of great performance,” Harvard Business Review, December 2001, hbr.org.
 Bill Snyder, “Researchers: How much difference does a boss make?” Stanford Graduate School of Business, September 27, 2012, gsb.standford.edu.
 Daniel Goleman, Richard Boyatzis, and Annie McKee, “Primal leadership,” Harvard Business Review.