A company will be managed differently in the future. What is the role of CEOs in the agile world? What do CEOs have to focus on and what do they have to focus their valuable time on?
So if a top manager has to reinvent himself, he must not get bogged down. Otherwise his Return on Management (ROM) will decrease dangerously. To prevent this from happening, he must concentrate unconditionally on the essentials. But what is the essential thing at a time when much is changing? Here are a few points of reference:
In a first approximation one can certainly consult the old master of management theory Peter Drucker. In his article “What Makes an Effective Executive” he writes that successful CEOs have very different personalities, attitudes, values, strengths and weaknesses, but very similar working methods. They focus on the following:
- You ask, “What needs to be done?” (solution-oriented)
- You ask, “What’s right for the company?” (selflessly)
- Develop an action plan (no actionism or muddling through)
- You take responsibility for decisions (self-confident)
- You will assume responsibility for communication within the company (strong communication skills).
- You keep an eye on action alternatives (not stuck)
- You conduct efficient meetings (binding and time-saving)
- You think and speak in the we-form not in the ego-form (team player)
Even in the new VUCA era, these eight working methods, on which top managers should concentrate, have not lost any of their topicality. They continue to be important orientation points for managers. As basic virtues, they unite the management of old and new times. However, they are not yet sufficient as a guideline for new leadership, especially with regard to shaping the conditions for agility.
Core of the CEO Job Description in VUCA Era
VUCA primes call on leaders to focus on developing vision, understanding, clarity and agility as ways to manage and overcome the discouraging and debilitating effects of the VUCA world. According to Johansen, the best VUCA leaders are characterized by vision, understanding, clarity and agility. But one could also say that the VUCA primes are the core of the CEO job description or requirement profile.
Johansen says volatility can be countered with vision. Managers should pave the way and strengthen the way forward and thus point the way in spite of turbulences. Just as a good skipper defines a destination by a compass setting or a fixed landmark to help the helmsman and crew regardless of the conditions. While the mission is more about the status quo and purpose of the company, the vision is about the role of the organization in the future. Vision requires explicit answers to the basic questions: Where does the company want to go, what does it strive for or what do the company’s wishes for the future look like?
With vision comes the chance to translate uncertainty into understanding and thus bring all team members into a common way of thinking and make them understand how they can contribute to success. Key principles are active communication and participation in decision-making processes. As with any transformation aimed at creating new individual and team behaviors, continuous and consistent communication in both directions is essential. This means not only talking to people, but actively listening. A widely communicated strategy map that is lively, interactive and dynamic contributes to a continuous understanding because it is not a one-off campaign. It is a living, breathing and intrinsic way of leading.
Complexity can be counteracted by clarity, which arises when everyone knows what their task is and these tasks are defined around the core tasks of a company. The dead ends of non-value-adding activities are systematically avoided. The VUCA world brings with it an enormous complexity every day so organisations must be careful not to create mountains of internal complexity and maintain a shared commitment to simplicity. Clarity can be achieved by reviewing, for example, meeting plans or internal information.
Finally, ambiguity can be countered with agility. The light-footedness of agility will help to read the swamps of ambiguity. Here not only agile methods like Scrum or Design Thinking come into play, but above all clear rules and expectations as well as courageous and unbiased acting people in an uncomplicated contact to each other. Companies that systematically analyse and measure their agility at all levels and then improve leadership and organizational behavior through measures such as coaching or interactive workshops will find themselves in a position to gain competitive advantages from their agility in an increasingly fast-moving VUCA world. It therefore makes sense to make agility transparent at management level, in teams and in business units, to localize and close gaps. If you work in the management of a company, you should ask yourself: How good am I at bringing vision, understanding, clarity and agility to my organisation today? Or: How high is my ROM when it comes to agility in the company?
A paradigm shift in leadership is required
Companies do not become more agile by asking their employees to work even faster or by declaring even tougher goals. They don’t become more agile if you prescribe agility to the workforce. Agility must be prepared and the framework set. This requires an urgent paradigm shift in management that emphasizes leadership with vision, understanding, clarity and agility. The ability to concentrate on these essential aspects preserves the ROM and leads top managers out of the fatal time trap.