by Shannon Houde: If it is changing faster out there than it is changing in here, then we have a problem” – Jack Welch.
Stephen Howard, chairman of Power to Change, was chief executive of Business in the Community(BitC) for 10 years. He said that leadership is a lonely place. Chief execs don’t keep their jobs long. Pressure is high to not think about things such as values. Politically, socially, financially, we are in uncertain times. Nobody trusts anybody — the bigger you are, the less you are trusted. We trust local MPs, but we don’t trust Parliament; we trust the branch manager but not the big bank.
Howard said that the reality of leading is about making hard decisions because the easier decisions already have been made by someone else. There is no magic formula or self-help book when running or leading an organization.
As a native Michigander, Howard has been running large PLCs and living in the U.K. for 30 years. He recently retired after 11 years as chief executive of BitC with 830 member firms. Previously, he was chief exec at building supplies company Novar (bought by Honeywell) and engineered ceramics company Cookson Group (now Vesuvius).
So let’s dive into his perspectives from both the corporate and non-profit sectors.
Shannon Houde: How do you define “leadership?”
Stephen Howard: As leaders, we need to be able to operate and navigate in ambiguity and uncertainty while holding on to what we deem important.
I see two styles of leadership:
- being the “boss” who drives people, relies on power and focuses on “I.”
- being the “leader” who coaches, inspires and focuses “we.”
Both leadership styles are about three things: Permission; protection; and process.
Permission: We will all make mistakes. We will try things that don’t work, but we need a discipline to be ready to regroup when that happens. Otherwise, we can’t feel comfortable with making the mistakes.
Protection: The idea of playing to win instead of playing not to lose is crucial. With the pace of change, there isn’t an organization that isn’t worried about being “Ubered.” But if your defense for your model being upended is to try to build up protection or to stall the inevitable, then you will lose and it will catch up with you. Knowing how to continue to stay ahead and innovate isn’t optional.
For example, if you are a business you will have a carbon footprint. There are certain realities you have to deal with. But how will you not deny them? How will you get in front of them?
Boots is excellent at this. It was first owned by private equity but held on to the trust of high street moms and then a couple of years ago they didn’t hide when being attacked about taxes paid (due to headquarters in different places as part of a bigger group). They disclosed all the numbers rather than deny or ignore it. They tried to explain the facts transparently and proactively.
Process: I look at this as compliance vs. commitment. Do your people really buy-in and understand why and what they are buying into? Is what you are selling to your team genuine? Leaders have to relentlessly communicate the core messages because everyone is inundated with too much information in this digital age.
Houde: You were also chief exec at Novar. How did leading in the corporate sector differ from BitC and some of the third-sector leadership roles you have had?
Howard: Managing a charity requires the same disciplines as a business — the dynamic is the same: productivity; cash management; clarity of offer; career opportunities for its people. I entered the non-profit world with a corporate arrogance thinking that people were paid more, so are smarter and will work harder — this is not the case. NGOs may measure profits in a different way but the organization still has to be well managed for people to trust it.
It is certainly harder to prove purpose if making soap (consumer goods) versus helping the homeless (charities). Regardless, we always need to ask — who are we trying to help? Corporates have it easier in terms of measuring KPIs with numbers, whereas in an NGO, it may take years to be able to measure the long-term impact on young people.
Houde: How many of your changemaker roles have required technical skills vs. emotional intelligence/people skills?
Howard: What a leader doesn’t need is specific technical skills because you should surround yourself with other trusted colleagues for these. No one can be an expert in all things. There are three “soft” skills that are crucial:
- You first have to be able to create both short and long-term vision that is realistic and aligns with the values of the people you are working with internally and externally. This is easy to say but hard to do. Then you need to be able to communicate this vision, communicate what success looks like beyond the numbers.
- The best leaders have the best teams. They have to enable other responsible leaders with an internal system to develop and reward them.
- Effective leaders have to be advocates for their business, their industry and for business generally (media, Brexit). We need to be continually proving the value business adds to society through skills, employment or the economics.
Houde: If you were still leading a multinational corporation in these unchartered times, what three things would you prioritize in your first year?
Howard: First, listen and be open to ideas from everywhere.
Next, create a clear, simple reality-based vision of what it is you are trying to do and then relentlessly do it. Nobody reads 30-page strategy, not even the board. This needs to be an “elevator pitch” that everyone will understand.
Finally, build competitive advantage through thinking about what it is we are offering plus driving costs and speed. If you pause, people will pass you by. We don’t want to panic or be complacent, but we need to be constantly reinventing who we are and what we do. Cutting costs is a short-term solution and the benefits won’t last. Always have a sense of urgency.
Houde: What advice would you give a younger version of yourself (say, a 30-year-old) in terms of leading in complex cultures?
Howard: First, be aware of your shadow. Leaders cast significant shadows. Values and integrity have to start at the top. People watch what you do, not just what you say. Cut costs and then fly first class? No. You have to demonstrate what matters and what is important.
Next, realize that the purpose of business isn’t profit. It is creating products and services that your customers want and need. Think about the business that drives the numbers — regulators attitudes, consumer behavior changes, etc.
Finally, be ready to walk away from categories of business if they aren’t aligned with your values.
Houde: So what’s the next big thing for leaders to address?
Howard: In the corporate world, it is about recognizing that we are under increasing pressure to disclose, report and invest in people and communities. We are seeing the value of incubator hubs, where people with big ideas are driven to succeed but never talk about the money. Instead, they talk about how to make the world a better place. However, there is still a generation in the chairman’s seats that are a bit too old-school — those who don’t yet understand that their stakeholders have new expectations. Eventually, this will catch up with them.
There are also so many companies wrestling with how to engage with the under-25s. This younger generation collects information and thinks about the world in a very different way. We need to think more about how that changes the way we train and develop our people. Globalization, digitalization and the gig economy are here and going to stay.
As leaders we need to be asking: What can we offer a young person that is unique? How can we give them a sense that they are getting more than a pay check? How can we get them to believe that what we are doing has social purpose?