At the 2022 Alexander Group Executive Forum, we addressed an intriguing management question.
Are there leadership principles that enable companies to deliver consistent, high-end growth year after year in different economic conditions?
In 2022, Alexander Group tested whether such principles existed by exploring the results of over 1,000 companies during the past 20 years. We wanted an extended time span that would include the 2001 recession and terrorist attacks, the 2009 great recession and the 2020 pandemic. These companies were sorted into quartiles and we paid particular attention to those in the 75th percentile of revenue and stock price growth over those 20 years. The end result was 300 companies demonstrated consistent growth across different time periods.
Alexander Group then interviewed executives from a sample of 60 firms to determine whether these high-performing companies had common management principles, regardless of industry. Three common characteristics stood out.
With these results in hand, Alexander Group gathered keynote speakers from a selection of these companies for our 2022 Executive Forum to tell their stories and offer examples of these Enduring Leadership principles in action. The executives who delivered keynotes at the 2022 Forum were:
Missions at companies represented by our speakers were about more than growth. Corporate missions are a dynamic tool to energize teams. Sometimes by pointing out how important a product is to helping customers do their jobs. Sometimes by integrating products into a much bigger picture. For example, Francine Katsoudas, executive vice president and chief people, policy and purpose officer at Cisco, described their mission as “powering an inclusive future for all,” and offered this insight:
Cultures at Enduring Leadership companies are thoughtfully designed, not accidentally developed. Their cultures are centered around three pillars: ownership, trust and inclusion. These leading firms do not underestimate the importance of a proactively designed culture. For instance, Fran Katsoudis, executive vice president and chief people, policy and purpose officer at Cisco, referenced a Wall Street analyst observation. “With a looming recession, we expect companies with strong human capital management to outperform. Cisco, the number one ranked company on this list, and consistently ranked high every year, is well positioned.”
Ownership, trust and inclusion comprise the three pillars of successful cultures contributing to dynamic performance.
Ownership starts with listening carefully to what employees have to say.
Katsoudis added that while listening is necessary, action is needed to show that you heard. “Our employees first suggested that we give employees the day off to vote. That was something that came up about six months before the rest of the market looked at it.” Soon after, another colleague commented, “I have no downtime anymore. Could we consider giving everyone in the company the same day off so that meetings aren’t happening on your day off and everyone can just step away?” And now part of Cisco’s operating procedure.
Reaching out to large or geographically diverse organizations can be a challenge. Laura Molen of NBCUniversal commented, “we created something called our ‘one update office hours’ where on a weekly basis, our leadership team all gets together and speaks to the entire division. There’s about 1,500 of us all over the world, and we speak to our teams all at one time and we tell them about what’s going on in the company, what’s exciting. We celebrate people’s successes and people love it.” This approach brought technology and process together to overcome the pandemic, bringing teams closer.
Celebrating team members of the team is critical. Emmanuel Ligner of Cytiva shared, “We had an R&D specialist who was excited about helping a Nobel Prize winner. When we heard about this, we engaged our communications team to create an internal documentary to highlight this team member’s contribution. We made it a celebration.”
Great cultures encourage people to do the right thing when no one is looking. Right behavior depends on trusting people to do their best in all situations.
Ligner at Cytiva tells us, “Trust is giving people room and then giving them credit. Don’t say to someone, ‘I trust you’, then micromanage them. That is a killer. I sit down with my team and say, ‘I don’t know 1% of what you know. Don’t look at me for a solution. Come with the problem and the solution. If it makes sense, I will just say go do it. If you succeed, it’s your success. But if you fail, it’s my mistake and I’ll take the blame.’”
Humility and trust are close partners. Enduring leaders have a strong dose of humility, and Ligner captured this concept by saying:
Diversity makes leaders more resilient. Said Ligner of Cytiva, “You build resilience by creating a close team, which is extremely complementary. It’s a team that will come and sit down with you and say, ‘I think you are dead wrong!’ It’s a diverse team that complements my strengths and weaknesses.”
Lori Tierney of J&J built on the importance of diversity. “Over the last ten years, our leaders have come with more global experience, global walks of life and understanding of global socioeconomic realities. They come from first-generation, college-educated families. Diversity in our leadership is a reflection of J&J’s leaning into the world at large and to the evolution of how people are seen and heard.”
Utilizing this approach helps J&J build inclusive leadership teams that last through generations, and they found that mentoring is a crucial component. Tierney says, “It is 100% understood that the talent around the table is going to be plucked out and rotated through other businesses. With people going to other parts of J&J there is an expectation that you are going to role model the next generation of leaders. And there is no such thing as ‘you’re baked, you’re good’. Every year there is an expectation that every leader is finding a way to get better, to expand their scope.”
At J&J, the CEO is in the middle of winning the war for talent. Lori Tierney told us how CEO Joaquin Duato responded to a question about finding and keeping talent. She paraphrased his response, “We do not make any assumption that because we’re J&J, we’re going to win the talent war. We’re going to work every single day to ensure we are a great place to work and are a ‘talent magnet.’ Our first priority is to care for the talent that exists in our 135,000 associates around the world. And if we do well by them, our talent magnetism will be strong and enable us to import new and diverse experiences in the process.”
Part of caring for talent includes making tough people decisions. Fran Katsoudis of Cisco stated, “The worst behavior that you’re willing to tolerate sends a message around what you’re willing to accept as a company. Every leader needs to be an example of the behavior we want, of what we are willing to tolerate. Getting business results is not enough. You have to do it in a way that’s aligned to a conscious culture. And as a result of that, there’s a ton of coaching that we do. And I think all of us need to be coached from time to time. There’s power for all of us in saying what we’re not willing to tolerate.”
In a challenging economy, headcount cuts are always a possibility. But in enduring leadership companies, such cuts are not hastily taken. Said Katsoudis of Cisco, “Cuts are a last resort. Some of the things that we’ve tried, for instance, is nudging employees from areas where we see business performance slipping into emerging growth areas. We say, ‘Hey, maybe it’s a good time for you to start to look at these opportunities.’”
Managing and building talent through change was a recurring theme at the 2022 Executive Forum. Laura Molen at NBCUniversal states, “Managing change is a bit like helping people get on the bus and sometimes helping them get off.” She expanded on this point by adding:
Enduring leadership companies give people every opportunity to make the transition. But they don’t allow the negative energy of a few to impact the morale of teammates that are engaged and ready to move.
Lori Tierney summed up this concept. “J&J always invests in people. During the COVID crisis and the build back planning, we had this question. ‘Do we press pause on our leadership development programs? Do we press pause at this time on our finance development programs, on our new hire programs?’ We had a very thoughtful discussion about what that would mean. And we made the conscious commitment to maintain the discipline on our talent development strategies.”
Teamwork is now at a premium in a world where “frictionless customer coverage” across complex marketing/sales/service motions is expected. Enduring leadership companies understand this concept and do three things to build exceptional teamwork into the fabric of their coverage.
First, they make sure everyone understands the mission. “All the different teams have to understand the bigger goal,” says Neeracha Taychakhoonavudh, former executive vice president of customer success at Salesforce, where “trust and customer success” sits atop the list of company values. Everything you do revolves around trusting your team and enabling customer success.
Second, they provide precise role definitions to each team member so they can deliver superb execution. For Salesforce, Taychakhoonavudh tells us:
Finally, they use shared metrics across the team to interlock jobs and functions where they overlap and depend on one another for superb customer coverage. Taychakhunavudh, offered an example. “My sales counterpart — our sales leader — her first priority is to make the number, to make the bookings. But she has a very strong secondary metric around the revenue attrition. Our shared metrics make sure we cooperate very closely on delivering frictionless, total coverage.”
High-performing companies adopt these Enduring Leadership tenets as part of their foundational strategy. Our dynamic business environment requires companies to adopt a sound philosophy that is successful and adaptable to ongoing change yet inspires growth.
Success is a journey requiring leaders to focus their attention on:
Enduring Leadership is a philosophy with an inherent, positive impact on companies focused on long-term success. Join us on May 10 – 11, 2023 at the Four Seasons in Chicago, IL for our Women Revenue Leaders Forum, and on October 25 – 27, 2023 at the Breakers Resort in Palm Beach, FL for the Executive Forum where we will continue to explore the principles and practices of Enduring Leadership companies and how they deliver lasting, sustainable results.
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