As part of our series about the “Five Things You Need To Be A Highly Effective Leader During Turbulent Times,” we had the pleasure of interviewing Stephen Wyatt.
Stephen Wyatt is a leading expert, thought leader and advisor in leadership and business. He has 25 years experience working with over 80 organisations and 14,000 executives to help people fulfill their potential and adapt to changes driven by the 4th industrial revolution. He is Professor of Strategy and Leadership at the University of Bath, Affiliate Faculty at Singapore Management University, Industrial Associate at the University of Cambridge and author of Management and Leadership in the 4th Industrial Revolution.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
Along time ago, in the 1980s, I was studying Manufacturing Engineering at Cambridge University — and at that time Asia was just exploding with the Tiger economies. Korea was in start-up mode, China was just waking up and Japan and Japanese manufacturing was on everyone’s lips. So, we managed to organise a study tour throughout the region. My own focus was on East-West joint ventures. I had a great time and met so many business leaders. After that I was hooked. I became a business consultant, working initially for the Monitor Group, which was founded by the thought-leader Michael Porter. I had a great network of contacts (from the study tour) a unique point-of-view (on managing joint ventures and operations in Asia) and I loved the energy of the region. I ended up staying for 30 years, only moving back to the UK in 2019.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
I had been studying East-West joint ventures, advising companies and helping to resolve the difficulties they experienced but, when I went on to create a joint-venture myself with a partner in China, I pretty much made all the mistakes that I usually helped others avoid!
I didn’t background check my partner enough. I hadn’t worked out what his goal was in joining with me. I didn’t speak to other companies that he had partnerships with. The one saving grace was that I had insisted on a ‘shot-gun’ clause in the joint venture agreement. So when, inevitably, there was a falling out (our objectives were completely different), I could trigger the clause. Although I didn’t recover ‘fair value’, there was a path straight to exit, which he didn’t contest. My learning from this was that advising is very different to doing. When it was my own business I was caught up with the emotion of the project and I was cash and time constrained, so I cut corners. This experience made me a lot more empathetic to others thereafter.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
In the early 2000s I was elected to be a partner of the Monitor Group and put in charge of running the South East Asia region, based in Singapore. It was a dream job, running teams across the region with both government and corporate clients. Whereas most client companies were American or European I wanted to move beyond seeing issues through the lens of western business theories and management practices. I wanted to connect with the mindset and perspectives of leaders from the local countries. I had the good fortune to meet with Mrs. Elizabeth Sam, who had previously been the head of the Monetary Authority of Singapore and was a senior board member of several prestigious, indigenous corporations. Elizabeth was a delight to be with socially and she arranged countless lunches at which I could meet the A-list of local business leaders throughout the region. From these encounters and my conversations with Elizabeth I began to understand the profound self-inflicted weakness of several standard practices of western corporations operating in Asia, such as the rotation of expatriate managers and the transactional nature of relationships.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
My company is called ‘Corporate Rebirth’ because our purpose is to help leaders and their organisations to be reborn — to refresh their mindsets and practices so that they can thrive in unstable, dynamic contexts. The traditional approaches to strategy planning and organisation run into difficulties in fast-changing or unstable marketspaces. This, I realised, was the common theme to all my work and time in Asia. So Corporate Rebirth was established to help organisations and leaders thrive in complex, fast changing contexts and to help them avoid burn-out, self-doubt and frustrations that can undermine the morale and performance of the whole organisation. After my own experiences in China I felt I could empathise with business leaders and the challenges they faced. I had a strong grounding in western management practices and theories but I was acutely aware of the different mindsets and behaviours required for success in Asia. Over time I realised that the unstable, dynamic context that has been the norm in Asia for the past 20+ years was increasingly becoming common elsewhere in the world, as a consequence of the disruptions and technological advances of the 4th Industrial Revolution. So, what’s the purpose of Corporate Rebirth? To help leaders and their organisation to thrive in dynamic, complex, fast-changing contexts; with a high regard for their well-being.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?
One of my companies was the Nine Dragons Hill Polo Club, which was the first international polo club to be established in China. I registered the company in early 2006. The sport of polo did not exist in China at that time. My goal was to create a unique platform for global luxury brands to connect with the affluent and influential in China. Now the problem with creating something new is that you have to create all the parts of the value chain. In our case that meant everything from growing high quality grass to be used as feed for the competition horses through to managing the media to ensure the sponsoring brands got the coverage they wanted. You have nothing until everything is in-place — and there was no-one in the country who had seen what it was that we were trying to achieve, let alone having prior experience of it. So I was constantly training people. For example, the club house was designed and built to cater for an exclusive, highly affluent membership, but some of the waiting staff had never tasted Coca-Cola in their lives and had no idea why a slice of lemon should be offered with a Diet Coke or if the beverage should be served hot, cold or at room temperature. By the time of the first major international tournament (October 2007) we had a staff of over 200 people and had imported over 60 competition horses. Every day on the journey from 0 staff and 0 facilities to that tournament was spent breathing the dream into the lungs of the staff. The dream has to become infectious so they want to stay, their friends to join the company and to make history. They need to be able to passionately and animatedly describe the showpiece event, even though they themselves have never yet seen or experienced it. During the journey there were so many set-backs and emergent crises that needed to be overcome. There were tears of frustration and long nights of despair, but the staff kept the momentum going. The October 2007 tournament was a huge success; attracting 8500 visitors and 38 million TV viewers. After this everyone knew what was involved and they started to contribute ideas for how to make the next one even better.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
In the above story, yes…there were times when it seemed impossible to move forward. But I couldn’t let the staff down. I didn’t want to be one of those expat managers who promises a lot and asks a lot and then leaves. The staff had put their trust in me and had decided to follow in my mad enterprise, so giving up wouldn’t have been fair on them. Also, once the horses had been imported, I felt a huge responsibility for their welfare; there was no way to just sell them or abandon them.
What would you say is the most critical role of a leader during challenging times?
The leader has a huge responsibility to the followers. If you appear to lose faith in the project you bring into question the choices that others have made to join the project. You have to be resolute in your efforts to articulate and achieve your vision. You have to connect everyone to that vision so they are highly motivated to achieve it, not for you, the leader, but for themselves. In times of crisis, your role is to monitor and shore up the morale of team and demonstrate your commitment to and ingenuity in overcoming the latest trial.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
Be visible, be in the thick of the action, but don’t lose perspective. You have to have the space to think creatively, outside the box, but still ensure your team you need to be alongside the team.
What is the best way to communicate difficult news to one’s team and customers?
In cases such as a business set-back, it’s important that, when you communicate, you don’t make it seem like it’s becoming your team or your customer’s problem to solve. Instead, communicate the set-back and then say what you are doing to address the situation. If there is a real set-back, such as losing a major client account, run a post-mortem exercise with the team to see where the team thinks the problem may have been and what as a whole could be done better next time. It’s important for leaders to be accountable, to be alongside their team or client and to constantly learn from set backs.
How can a leader make plans when the future is so unpredictable?
The journey is unpredictable — but the destination should remain clear. That’s why Purpose is so powerful. The clearer the objective, and the more broadly it is embraced by employees, the greater the flexibility to adapt and overcome obstacles. Think of a tree with deep roots. The roots hold firmly to the purpose. When a storm hits — as long as the roots are strong enough — the tree will survive it. It’ll bend and twist. It might lose leaves and even branches but, when the sun comes out again, the tree will still be standing, and chances are, it’ll be one of the few.
The leader sets the direction and empowers others to achieve it. The leader needs to adapt the plans and the allocation of resources as the future unfolds and new challenges and opportunities emerge. There’s an expression that ‘no plan survives the first 5 mins of battle, but you always need a plan’. The leader adapts within 3 boundary conditions: firstly, a plan is required so tasks can be actioned and resources can be deployed; secondly, the plans will need to be adjusted as the future unfolds; thirdly, the plans must be adjusted in a timely manner, being neither overly sensitive to new trends nor delaying too long and insisting on certainty, however unrealistic this might be.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
The combination of the following 3 ‘axioms’ is key:
1. Adopt an audacious goal that is purpose-led: Be anchored on the purpose objective yourself and ensure that everyone else is also passionate about its pursuit; then be flexible in the face of obstacles and opportunities.
2. Build the capacity of the organisation to adapt; This is what I call Dynamic Capacity — the ability to Sense & Make Sense as the future unfolds x the ability to Seize & Replicate (opportunities and solutions) x the ability to Reposition and Reconfigure (assets and activities).
3. Embrace and Empower talent and teams; Constantly upskill & reskill, Fluidly form and reform high performance teams, Support the well-being of the workforce (fulfilling the Duty-of-Care).
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
Leaders must keep in mind the key paradigm shifts in the 4th Industrial Revolution. These are difficult for leaders to absorb, in large part because they contradict traditional approaches (and business school taught principles).
1. The scarcest and most valuable asset in 4th Industrial Revolution is talent — whereas traditional management thinking has focused on Finance (e.g. cost of finance and capital efficiency). Funding is now cheap and widely available, a consequence of 12+ years of quantitative easing. The World Economic Forum estimates that 50% of the workforce will need to reskill by 2025!
2. In 4th Industrial Revolution companies win a huge valuation premium through speed, moving quickly and effectively to create the new future. The traditional managerial mindset is that of optimisation and risk avoidance. Careful analysis requires data to assess, but we only have data on the past, not the future. The Fear of Missing Out (FOMO) is an ever-present risk consideration for the leaders of the fast-moving companies whose valuations dominate slower, more traditionally minded companies. Tesla is valued at approx. US$650bn compared with GM which is 15x bigger and yet valued at only approx. US$90bn.
3. The traditional framing for leadership was ‘Command and Control’, i.e. with the assets at my disposal, how can I best deploy them? With the speed of business’s evolution, this mindset is now too restrictive. Leaders are now tasked with finding relevant assets that will often be beyond the boundaries of their formal control (in other parts of the firm or outside the corporation). Leaders increasingly now need to be able to ‘Connect and Collaborate’ with people and assets that they do not control.
4. A fourth paradigm shift that some leaders struggle to embrace is related to stakeholder management. Traditionally the focus has been on managing direct stakeholders; particularly customers, investors, employees. However it is, increasingly, critical to manage indirect stakeholders; such as public opinion and broader reputation as an employer, as a member of society. Maintaining the Social License to Operate, which comes from the trust and goodwill of indirect stakeholders, is essential.
Failure to make these changes in thinking creates difficulties for the leaders and their companies. Hence, they are arguably more important to embrace in difficult times.
Apart from these very core issues, the most common mistake that leaders make during ‘difficult times’ is not taking action soon enough. Seeking greater certainty from accumulating data on the new before acting — but by definition there is only data on the past (and at best the present) so such an approach usually results in decisions being taken too late and incrementally rather than being decisive.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
Whilst companies and individuals globally are seriously impacted by the Covid pandemic, Unilever, like other corporations, has learned lessons from past crises and is putting them into action; perhaps with the words of Winston Churchill ringing in their ears ‘to never waste a crisis’.
At mid-year 2020, Unilever reported results that were above analysts’ expectations. Sales were down 0.1%, but the sector focused analysts had predicted a drop of 4.3%; meanwhile profit had actually increased year on year by just under 4% and through timely actions, free cash flow had more than doubled to €2.9bn from €1.3bn. As a result of this Unilever was able to seize opportunities and strengthen its ecosystem in ways that will help to ensure the company emerges from this period of turbulence stronger than it entered.
- Unilever has pledged $540 million in cash to support companies across its extended value chain in order to help these small-to-medium sized businesses survive pandemic-triggered economic downturn.
- They will also donate $108 million toward efforts to help fight the coronavirus outbreak. This includes donating about $54 million toward soaps and hand sanitisers to the Covid Action Platform of the World Economic Forum as well as donations of sanitising products to hospitals and schools.
- These initiatives will help the company strengthen its eco-system and may enhance loyalty among partners as well as customers. A recent study found 75% of people want to see brands taking action to fight the pandemic.
In 4IR, ambidextrous leaders — those who remain resolutely focused on the pursuit of the purpose of the corporation whilst simultaneously being flexible and adaptable to the speed of disruption — will ensure their organisations thrive, whilst others only survive or worse.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.
1. Focus on the purpose of the company. All stakeholders should already know and be aligned with the pursuit of the purpose. The choices that the leadership team makes and the messaging of ‘why’ actions are to be taken, how flexibility is being enhanced and operations adapted should always be consistent with the pursuit if not acceleration towards the purpose. Maintain active communication to all stakeholders — keeping the messaging on ‘why’, linked to the pursuit of the purpose, whilst responding to and adapting to the present changing context.
2. Free up cashflow and strengthen the balance sheet to be ready and able to seize emergent opportunities. Reduce costs through a focus on operational efficiency, while maintaining investment in the future of the company (e.g. R&D, marketing). Divest underperforming assets to increase financial flexibility and strengthen the balance sheet to be ready to move quickly on investments such as M&A targets as the downturn slows.
3. Follow through on key strategic priorities that had been defined prior to the crisis. These initiatives may need some adaptation, but the turbulence of the crisis provides an opportunity to accelerate their implementation. Prioritise the actions most pragmatic for the business at this time, within the broader plan. Push through planned changes in business scope and operations. Emerging from the period of turbulence having completed the key strategic initiatives will further extend the anticipated advantages.
4. Seize on initiatives that shore up trust; with employees, corporate partners and as an actor in the wider society. Fulfil the ‘duty-of-care’ to employees and workers. Amplifying initiatives that support the well-being and resilience of staff, where-ever they are located, even if far from the HQ. Ensure that exit schemes are handled humanely, and that fair process is adhered to. Look beyond your own operations to provide insight on eco-system partners; react quickly and confidently when required; for example, as demonstrated by Unilever, adjusting payment terms or on-boarding alternative suppliers or channel partners.
5. Accelerate switching over to new working practices and digital enablement. Use the urgency of the situation to switch over into the mainstream, behaviours and reliance on applications and systems that may have previously been regarded as experiments, pilots or only suitable as exceptions. Scale-up the new practices and abandon the old. In the Covid pandemic we have witnessed rapid scale up in flexible working and working from home. Triggering many firms to reconsider the longer-term value of office space.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I have 3 …
‘Looking at the quality and energy of your followers is like looking at your reflection in a mirror.’
‘The culture of an organisation is controlled at the top. If you want a better culture, change the behaviour of the leaders.’
‘Say ‘thank you’ every day.’
How can our readers further follow your work?
My publications (books and articles) are usually highlighted on LinkedIn https://www.linkedin.com/in/steve-wyatt-phd-b81521/
I’m always happy to find time to learn from and share ideas with others, every day I try to have a virtual coffee with someone new. Contact me on [email protected]