Trust and Authenticity
The era of the imperial CEO is over. Command and control behavior is less effective in today’s business climate. Neither is the absentee CEO, who operates in a void by failing to engage strategic stakeholders critical of the company’s behavior, internally and externally.
As the Economist recently noted: “Effective communications skills are a relatively new requirement, the result of the increasing intrusion of the outside world. A corporate leader must talk convincingly. Motivating employees requires a gift to present a clear vision persuasively. A leader who cannot inspire trust and convey authenticity will find the task difficult.”
Hard Power and Soft Power
There is an analogy for business leaders in the foreign policy model developed by Professor Joseph Nye, dean of the Kennedy School of Government at Harvard. He talks about the hard power of military force and coercion, while soft power is based on attraction and intellectual legitimacy.
Hard power, for CEOs, is making the numbers; soft power is about values, ideas and leadership. Soft power can inspire and justify corporate decisions, which may be based on hard power considerations. Effective CEOs and corporate leaders explain their decisions in the context of the company’s vision and mission.
CEOs also need to exert leadership on the public stage, interacting with key players in government, the media, activist groups and the community. The CEO’s absence from the stage surrenders the spotlight to all manner of opponents, from disgruntled employees to demagogic public officials to headline-grabbing plaintiff’s lawyers.
At the same time, CEOs must act as stewards of the corporate reputation, which is the umbrella for workplace values, product excellence and social responsibility. They must forge relationships with multiple stakeholders based on continuous communications, respect and transparency. The key to effective corporate reputation is trust, built by regular interaction with strategic stakeholders.
What Matters Anywhere, Matters Everywhere
Former Secretary of State Madeline Albright was recently asked what advice she would give to world leaders. She did not hesitate for a second. “An essential qualification for any world leader is the capacity to understand that what matters anywhere, matters everywhere.”
It’s not hard to see how this advice applies to leaders within your own organization. What matters in any division, function or team within a company matters everywhere. What matters to your customers should matter to every division of your company. To the degree that it does not, you’ve got trouble. Like a car with an engine that can’t fire on all cylinders, a business consisting of silos with competing agendas may move forward for a while, but eventually, it stops running.
A leader’s most valuable currency is not money, charisma, self-sufficiency, an MBA, industry expertise or the ability to analyze a case study, read a P&L statement or build a really cool PowerPoint deck. A leader’s most valuable currency is relationship. It is emotional capital. Leadership defined in terms of relationship, and taught and measured in terms of capacity to connect with employees and customers at a deep level.
The next frontier for exponential growth, the place you’ll find a new and sustainable competitive edge, resides in improving human connectivity. It is here that significant gains can be made, both in inter-company relationships and increased market share.