7 Living with turbulence

‘Keeping your energy going is at different levels. First, you have to discover something exciting to do in the organisational context. You have to try and celebrate the building of the vision. You have to work with younger people to keep your energies going. You have to have an entrepreneurial mindset, and I think finally you also need to reinvent yourself every year. In today’s world you are obsolete if you are not doing that. If I look at the last 10 years, if I hadn’t reinvented myself I would have fallen by the wayside long ago.’

K.V. Kamath, ICICI Bank

Giving it all

There’s a powerful children’s book called The Giving Tree by Shel Silverstein. It is a story about a tree and a little boy.

Every day the boy comes to swing on the tree’s branches, to eat its apples and sleep in its shade. The boy loves the tree. And the tree loves the boy. But as the years pass the boy finds other things to do and the tree is often alone.

After much time has passed, the boy comes to the tree and asks for money. The tree suggests he picks its apples and sells them in the city. This makes the boy happy; he picks all the apples and goes away. And he stays away for a long time.

One day the boy comes back – he wants to build himself a house. The tree suggests he cuts off its branches. This makes the boy happy; he cuts off all of the tree’s branches and goes away to build his house.

He stays away for a long time and is old when he returns. He is unhappy and fed up with life and wants a boat so that he can sail far away. The tree tells him to saw its trunk in two and make a boat. This makes the boy happy; he hollows the tree’s trunk into a boat and sails away.

The tree (now a tree stump) is alone. After many years, the boy comes back; he is now very old and sad. And the tree is sad too, because he feels he has nothing left to give the boy.

The boy tells the tree that he is just so very tired and needs to sit down. The tree suggests that the boy sits on his stump and rests. And the boy does, and the tree is happy; it was wrong when it thought it had no more to give the boy.

Being a leader can feel like being a giving tree. At work, and at home, people need you to give more. And as the turbulence mounts, the calls on the leader’s time increase exponentially. We demand a lot from our top people. More now than perhaps at any other point in the last century. Forget about 9 to 5, or 7 to 7, or 6 till 10. The cell phone, Internet and BlackBerry changed all that. Now we can work 24 hours a day, across every region in the world. Ever spent an afternoon at the in-laws’ quietly closing a deal? Ever gone on vacation and thought, just a little peek at my email won’t hurt? Leading in turbulent times demands huge reservoirs of energy, will, and stamina. But how can leaders manage this? How can they survive?

Among our interviewees five sanity-preserving factors emerged. They fall into our three categories of Passion, People skills and Maintaining a Big Picture Vision.

Passion:

the ability to accentuate the positive whenever possible;

a willingness to see opportunities for self-development.

People skills:

to show kindness and sincerity towards yourself and others;

the ability to look after yourself physically and mentally, but also a willingness to accept support when it is offered.

Vision:

maintaining a sense of context.

It’s not life or death . . . usually

‘I’ve been through six of these’, said PwC’s Sam DiPiazza. ‘I joined the firm in ’73 and that was the last time we had as big a drop in demand and it was the oil crisis that caused it. It was nasty, but I didn’t realise it was happening because I was a brand new staff guy. Today, most of our young partners, 42 or 43 years old, were also relatively new staff people during the last big recession in 1991. So this is the first time they’ve seen it, and that’s why you have to keep a measured response.’

It was surprising how calm and aware of the historical context the leaders we talked to were. Lawson’s Takeshi Niinami provided an interesting take on leading during crisis. He conceded that he was busier than ever before, often clocking up 120 hour weeks. He viewed turbulence as an opportunity to really accelerate human development in the organisation. Much of his time is spent supporting and guiding his management team as they weather their first crisis. ‘I’ve found more talented people than before’, he told us with enthusiasm. ‘People working together is the key if you are to overcome this kind of crisis. I have changed the management team totally over five years, but I want young managers to go through it themselves. The new guys will pick up a lot of experience and absorb it.’

A real crisis brings out the philosopher in the world’s leaders. For some, a global crisis is actually and somewhat strangely a relief. Suddenly, the playing field is levelled. We are all in trouble. ‘From a stress standpoint, even though you’ve got your own, at least you know you are not the only person who is dealing with the magnitude of challenge that’s out there. And I think there has to be a bit of comfort in that’, reflects Linda Wolf of Leo Burnett.

‘Part of what helps me is a sense of context, I think, knowing that this is a stressful situation, the market’s going to hell and the economy is tough, etc., and as a result of that we need to do some creative and appropriate and nimble things to get back. But those are all opportunities, those are not people dying’, says Kaiser Permanente’s George Halvorson.

Retaining a sense of perspective lies at the heart of the business philosophy of Severstal’s Alexey Mordashov. ‘It’s important to look at the fundamentals, not for the business, but for you. I ask myself, “Is it your choice?” “Would you like to continue?” And sometimes it’s difficult and tough, but it’s my life. I’ve chosen it consciously, deliberately, and voluntarily, and I’m thinking, basically, get on with it. Of course, you see tough times, and good times. You have to be prepared. This should be an important feature in the culture and the mindset of all executives in mature industries, because all mature industries are cyclical.’

The glass is half full . . . always

‘It’s very difficult to keep a positive attitiude constantly. It’s difficult to be upbeat at meetings, but people look at you to do that’, admits Bijan Khosrowshahi, who was CEO of Fuji Fire and Marine. Bijan is exactly right and this was a point reinforced by all the leaders we talked to. The leader sets the tone and a positive tone trumps negativity every time – no matter what the situation. ‘A leader is a dealer in hope’, Napoleon once observed.

‘It’s your job to have a cup half full, it’s your role to provide that enthusiasm and positive energy to the organisation’, says Mark Frissora of Hertz. ‘But how do you do it?’, we countered.

‘I think you’ve got to be predisposed that way. Winners always typically view the world that way. Having that cup-half-full attitude helps you get through life, makes you more successful, and it’s what I preach to my management team. You guys walk out of a room and you’ve got a frown on your face, everyone in the organisation will be depressed, and you’ll take your organisation right down the proverbial toilet. The shadow of a leader is huge so it’s very important that we walk out of this room with smiles on our faces, and talk about the opportunities. We need discipline, but at the same time we need to make sure that we always put a positive frame of reference on everything we’re doing. I’ve always been built that way, so I’m always looking for where’s the next way to make more money, get more revenue, drive more costs, or efficiency.’

Richard Langan, the CEO of North American law firm Nixon Peabody, capped his 20+ years legal career at the firm by being elected its CEO at the start of 2008. This thrust him into the senior leadership role at the most turbulent of times. For Dick, balancing how he communicates the passion he feels for his firm and its future, with the need to respond quickly to extremely challenging demands caused by the global downturn in demand for legal service has become the cornerstone of his leadership. ‘Difficult economic times require leaders to establish a good balance between optimism and realism. Since the great recession set in, I’ve worked relentlessly to convey my strong belief in the firm’s vision and future success together with highlighting the need for heightened vigilance. With passion, a leader can motivate others to give 110 per cent and maintain infectious enthusiasm in the face of concerns over the economic uncertainties.’

Leaders are, somewhat fortunately perhaps, born optimists. They believe in the future – no matter how dreadful the present. Ed Dolman of Christie’s is definitely in the glass half full category. ‘You know, it could be worse. That’s what I keep saying to myself. It could be worse, and I’m grateful that we can adapt quite quickly. I am grateful that we’re in the business we are in, even though we’re all so highly affected by the destruction of personal wealth that’s happened worldwide’, he told us. ‘Luckily we’re not a public company. We were public until 1998, and then we were bought by a private individual, François Pinault, and I thank my lucky stars every day that I don’t have to make public pronouncements on performance.’

Blind optimism is not what is required, emphasises Tom Glocer: ‘You have got to get the balance right. Your investors don’t want somebody who doesn’t have a clue as to how serious it is. You have got to be honest with your employees.’

Among the people we talked to one of the most philosophically optimistic was Alexey Mordashov, CEO of Severstal, Russia’s largest steelmaker and said to be one of Russia’s best-run businesses. Severstal hired Mordashov, in his early twenties, as an economist in 1988. He went on to secure outright control of the firm and became chief executive in 1996. Hit hard by the financial downturn, Mordashov was calm and collected when we spoke.

‘I don’t see any significant changes in my view on the world, long term. The world remains a competitive place. What is happening, is just the normal consequence of the free market. Fundamentally what is happening is understandable and generally good. The best proven way to improve quality of life is the free market economy’, he said.

Personal development

As well as a keen sense of the historical and economic context of turbulence and positivity at all times, leaders retain a constant commitment to improving themselves and their organisations. They recognise that no one is perfect. Leaders also need to develop and improve. This is surprisingly difficult. It is a bit like trying to get fit when you are in the middle of a title fight.

It begins with questions, asking questions of yourself. ‘Now more than any other time, you have to make the separation so work doesn’t influence your personal life and family. I like exercise, for example, and try very hard not to let all the things that are happening eat into that. It’s critical’, says Bijan Khosrowshahi, formerly of Fuji. ‘As a leader you need to sit down and think about the decisions you have made, take responsibility for them and come to terms with them. To keep your head straight, you have to focus on going forward. You have to focus on saying that’s okay, this has happened. How do we go forward and how do we get the company to move forward to the next level?’

In a world where knowledge is a critical organisational asset, great emphasis is placed on personal development.

Corporate universities, e-learning programmes, in-house training, personal learning networks, these are just a few of the learning options available to employees. But what is available for those higher up the organisation? What about a chief marketing officer (CMO) who wants to hone their leadership skills, acquire a deeper self-knowledge or maybe just retain their edge both mentally and physically?

The higher up you are the harder it is to do personal development. For a start, who delivers it? When you get to the top of the organisation the issues you are dealing with are much more around leadership style, personal effectiveness, and interpersonal skills such as empathy, communication, listening, impact, clarity, and this is feedback and coaching that is very hard to give to anyone who is more senior than you or who is a colleague.

Externally, executive education programmes and leadership forums are options. But many senior executives are too busy running teams and organisations to take the time out to attend.

Just a few years ago, news that a senior executive was using a coach would have raised eyebrows in the boardroom. Today, however, assigning an executive coach to improve a leader’s management performance and/or overcome their personal development deficiencies is a far more acceptable practice.

For senior executives, the attractions of employing a coach are obvious. There is no need to leave the office for a start – a major plus for time-strapped executives. Better still, the coach fits into the executive’s timetable, and provides a tailor-made programme focused solely on the needs of the executive.

Then there is the important issue of trust and confidentiality. ‘We have this idea of organisations as pyramids, so at the top there’s only space for one person. Also there are tactical reasons in the following sense: careers are individualistic, people are just not prepared for or used to sharing power. People are not used to trusting someone’, reflects Professor José-Luis Álvarez. Sad but true, yet trust underpins the coaching relationship. ‘An executive coach provides a safe place. Who else can leaders turn to? They are surrounded by senior managers who drink from the same water fountain’, says one coach. Today, coaches who work with the most senior levels of leaders see themselves, and are viewed by their clients, as trusted advisers with a unique perspective on the leader and organisation with which they are working.

Looking after yourself

‘I try to keep positive, even with the headlights on me, so I really think that having a positive attitude and a sincere love for the job you do keeps energy levels high. I try to have some time for myself also, I exercise every day, I eat well, make time to share with my family and friends. And, well and obviously I drink at least one Modelo a day’, replied Carlos Fernandez when we asked him about how he looked after himself in turbulent times. Equally, he was adamant that part of his job was to broaden the sense of responsibility in the company. ‘I try to make clear that it’s not only me that works in the company, so I need the help of everyone. I need the help of the team to be positive, and one of the things that I also like to tell them is that I feel proud of working with them, because they are talented, a great team and we have gone through many things that are very difficult to handle, so I really feel proud of them and they should be proud of working for this company.’

Looking to develop skills and new perspectives has to be combined with physical and mental fortitude.

‘I tend to ratchet up physical activity in times of stress, so a bit more in the gym, a bit more tennis’, Tom Glocer, CEO of Thomson Reuters, told us. ‘ I’ve got young kids. I think the first thing in life is you’ve got to have is a really stable home platform. Which isn’t to say that even in the happiest and most normal home there aren’t stresses.’

Anand Mahindra was one of the many leaders who talked to us about how they looked after themselves. Anand has a long-established workout routine to ensure he is physically up to the job. And then, as he explains, adrenaline kicks in: ‘When you do a big deal the adrenaline is something that you don’t anticipate and it’s a huge booster. We’ve seen that with a lot of people when they get into a position of much greater responsibility, influence and accountability, the adrenalin comes naturally. And I think you need that whole elusive work–life balance. This is not the time to forget about it. That’s where I think I have a secret weapon and that’s my wife who functions as my coach and guru. She certainly keeps me honest and makes me remember that there’s a family, that there’s another world. That balance, I think, is going to be absolutely critical. If you don’t maintain a balance and you get obsessive about any one thing, I think the only decisions you’ll make will be the wrong ones.’

Balancing acts

Work–life balance was a constant refrain – even in turbulent times.

‘I think balance is essential; you don’t do as good a job if you don’t have some of that balance; and you get it wherever you can. It’s basic stuff like exercise and also finding those moments when you can gain additional insight in whatever other area you might feel is appropriate. You can work yourself to death but in the end you’re not going to add as much value’, says Linda Wolf.

Working more hours is not the answer, advised PwC’s Sam DiPiazza. ‘You’re not going to solve this problem by working 20 hours a day. You have to be smarter, and that means you have to stay fresh and alert. You have to keep a level of balance, otherwise the big judgements you make right now, which are really tough judgements, you’re not going to make at the top of your game’, he said.

When we spoke Sam had just been to India to deal with a problem. He made sure that the day before he left he did nothing but relax – ‘I didn’t do anything and my wife and I took a nice long walk in Zurich. I think every executive has to keep that balance in their life or they’ll find themselves making a lot of bad decisions.’

Definitely in the balanced category is Chip McClure of ArvinMeritor. We asked him about his schedule. ‘I tend to get in early. I think the only person that gets in before me in the morning is my CFO [chief financial officer]. I’m usually in by 6.30; he’s in by 6.00 so he’s got the coffee made, which is nice’, he told us. ‘There is no average week. If I look at my calendar for a full year, there’s obviously certain things which are locked in – starting with board meetings, committee meetings, various shareholder meetings, analyst meetings, earnings calls, that type of thing. So within each week there may be those kind of things interspersed.

‘If I look at next week, on Monday I’m meeting with one of our heavy truck customers; on Tuesday and Wednesday I’m going to be in Washington, DC. One of the things I try to do is spend time in Washington not only as a representative of the company, but also to represent the automotive industry. So I’ve got a number of Capitol Hill visits with senators, and congresspeople. Then on Thursday I’m visiting with a company that’s totally outside of our industry, just to do some benchmarking on technology. The company I’m meeting with has done a tremendous job reinventing itself by developing innovative technology. Then the following week I’ll be visiting some of our global facilities. Two weeks ago I was in Mexico and visited six or seven of our plants. Obviously, I spent the majority of my time with our people, but at a few of the facilities I also took the time to meet with some of the local elected officials.’

Chip is famed for his ability to ensure that meetings run on time. ‘The only thing you can’t recapture is time’, he says. He has three strategically placed clocks in his office. ‘These clocks are in place because I don’t normally like meetings to last more than an hour. I understand that sometimes a meeting might have to go a little longer because of the content, but when we hit 45 minutes and haven’t gotten through all of the items, I’ll say, “Listen, we’ve got 15 minutes left, what do we need to get resolved? Let’s get it resolved, and let’s move on. Because there’s only 24 hours in a day.” ’

The roads travelled

Energy is undoubtedly a prerequisite for leading in turbulent times. Leaders also expect it of the people they work with. Energy levels are most obviously tested by the vast amounts of travel which come as part of the job. ‘I travel a great deal’, one chief operating officer (COO) told us. ‘My home office is in a suburb of Washington, DC, but I spent a great deal of my time on the road – in excess of 50 per cent. So I am in the office less than half the time.’

That’s pretty typical. The reality as a twenty-first century leader is that you are on the road most of the week. You do overnight flights because you’re commuting, and when you get to the weekend you’re tired, and perhaps not as patient as you should be. Says Caterpillar’s Jim Owens: ‘I don’t know how you can be a CEO and not know how to sleep on an airplane. I sleep about as well overnight to Europe as I do at home in bed.’

The reality is that extensive travelling is a prerequisite for anyone in a top job if they are to help their organisation maintain its competitive edge. Business relationships are based on communication and, as we’ve seen, communication is the cornerstone of any top job. The question is why all the new communication media have failed to make a dent in travel schedules? The answer seems to lie with a simple statistic. More than 80 per cent of human communication is non-verbal (some studies put it as high as 93 per cent). In other words, email, telephone, video conferencing, and all the other communications marvels do not have the bandwidth to carry more than 20 per cent of the face-to-face experience.

Facial expressions, body language, eye contact – these are key conduits. Without them you can’t get past first base. It’s tough to bond over the Internet. So, unless your client is in the next office, to do business you have to travel. How else can you meet customers, colleagues and competitors? ‘A CEO from Switzerland told me once that he has a personal key performance indicator that he wants to meet twice as many customers as investors and I think that’s a very good target’, says Monika Ribar of Panalpina.

At Caterpillar, Jim Owens travels the world attending employee meetings. With over 300 significant facilities scattered across 40 countries, it is impossible for Owens to visit every one every year, but he tries to ensure that an executive officer from HQ in Peoria gets to every major facility. ‘That’s a lot of getting out’, he reflects, ‘but I like to be sure that at least one of us appears there and has a chance to have a dialogue and talk to people, make them feel like they’re a critical part of our organisation everywhere we do business.’

The downsides of constant travel are well documented, and justifiably so. Less emphasised are the plus sides. As a well-travelled leader you get to meet a huge number of people and develop relationships which are important to them as businesspeople and as human beings. Travel allows people to connect. It can be a richly rewarding personal experience. Travel not only broadens the expense account. Business trips offer new and exciting vistas.

Making space

Ask leaders how they factor in some downtime and you will get a bunch of different answers. One they will all tell you, though, is even if, and especially if, you are a global CEO, you still need to take some time out to unwind, both physically and mentally.

One CFO told us about visiting another corporation where busyness reigned supreme. ‘Every day there were two or three firm-wide new initiatives. Everybody had open calendars. The entire day, nine hours a day, was controlled by somebody else. People had to go to meetings but they didn’t know what they were about. People were bombarded with ideas that weren’t screened. If you wanted to manage your career up, you had to invest three or four hours a day just catching up with the news in the company. You can’t manage a company like that. You overload.’

Loyal supporters

With huge demands on their limited time and a punishing travel schedule, the leader – any leader – needs support.

There is a central paradox to being a leader: it is the most prominent and eye-catching role, but it can also be the loneliest. As a leader you get the attention, you get the welcome at the airport, the welcoming committee when you visit an office. Then you are sitting in a taxi on the way back to the airport and you know it is your name which will go against the decision.

Leaders realise pretty soon that they need support from every network they can lay their hands on. As a leader it doesn’t take long to see that it is a very different job from any other position. Days are longer and busier than ever. They travel constantly. The impression the leader gives tells people how the company is doing; they need to be up, positive and engaged, all the time.

During the research for this book, the incredible patience of the leaders’ spouses has come up again and again. Leaders nearly always mention their home life and the insight and support they couldn’t do without.

‘Running a mega-company, like Caterpillar, is about having a great leadership team, great cohesion, understanding of the business and industry, so you can lay out the broad strategic direction, stake out very bold goals for what you hope to achieve, and then working with a great team of people, who really understand all aspects of the business and can cascade that down to a work agenda for the whole organisation’, says Caterpillar’s Jim Owens. ‘Also, it’d be very difficult to have this job and not have a wife who was a partner. My wife is just great support. We’ve moved the family around the world – Geneva, Switzerland, Djakarta, Indonesia, Nassau, San Diego, back and forth to Peoria. She does that with full recognition of everything I’ve got to do and the fact that she’s got to do a lot of things with me, if we’re going to stay together as a team.’

The domestic anchor and support mechanism was universal. ‘Any time with my family, daughter and friends restores me’, says Kris Gopalakrishnan of Infosys. ‘The good thing is the family also has a lot of ownership of Infosys. It is a company they have seen from the beginning and have benefited from. The family support is important. Time we spend with friends and family is important. I get energised by interacting with people who are as passionate as I am, people who also feel that there are many more things to be done and that there are a lot of issues. If I can contribute in some way I feel energised.’

Support begins at home, but turbulence and the extra demands it brings inevitably take a toll on home life. Leaders tend to inhabit two separate worlds, with everyone demanding their time and attention. Talking with Richard Baker, when he was CEO of Alliance Boots, he told of how he broke his shoulder when he fell out of a tree because he was just trying to be a good dad. His daughter wanted to climb a tree but he was tired from jet lag and working away all week, so he wasn’t really concentrating as he climbed. He missed his step and fell to the ground. Tired leaders and trees don’t mix!

All the leaders we talked to, and have talked to over the years, reveal much the same trouble with balancing hectic schedules and family life. The family is the ultimate support network. ‘I take my family vacations, I spend time with my kids and wife and carve it out. But, you know, you’ve got to work about as hard at that as you do your job’, says Jim Owens, CEO of Caterpillar.

It was an issue also tackled by Jim Skinner of McDonald’s. ‘You know, we all work hard. I’ve seen a lot of people work hard and they confuse effort with results, and that’s a danger. I think that’s sort of dumbing down the whole concept around hard work. I’d rather say, let’s work smart. It makes more sense.’

Says Peter Sharpe, CEO of Cadillac Fairview: ‘I’ve always worked a lot and long hours, but I rarely ever bring work home. I’ve always been able to, to close the door of the office and make that break. I love what I do and I enjoy time with my family, but you sacrifice a lot if you aspire to grow and run an organisation. There’s lots of sacrifices along the way.’

Close at hand

At work there are a variety of support mechanisms. Many companies now have a COO who manages internally, while the CEO devotes more attention to what’s going on outside. It is not a new idea. There are precedents. Examples of famous business double acts abound. Think of David Hewlett and Bill Packard, James Hanson and Gordon White, Microsoft founders Bill Gates and Paul Allen, Body Shop’s Gordon and Anita Roddick. Richard Branson relies on his sidekick of many years, Will Whitehorn. More recently, David Filo and Jerry Yang, the founders of Yahoo!, styled themselves chief Yahoos.

Stephen Miles, a partner in Leadership Consulting at Heidrick & Struggles, has done a lot of work on the role of the COO. He sounds a note of caution about the COO/CEO relationship in his book (co-authored with Nathan Bennett) Riding Shotgun. He notes: ‘The key ingredient for COO effectiveness is often whether the CEO is ready to share power. Unfortunately some COOs do not realise the CEO is not ready until they are in the position and friction begins to appear in the relationship.’¹

But most leaders today, at least in theory, seem to understand that solo leadership in the corporate world is ultimately inefficient and ineffective. No one individual, no matter how gifted, can be right all the time; no one individual, particularly in a large organisation, has the relevant information to make every important decision. Over time, resources become misallocated, opportunities are missed, innovation becomes stifled. Over-control saps initiative and bureaucratic behaviour ensues.

Whether you like it or not, a leader has to rely on others – their secretary; their spouse; their colleagues; their team; their friends; their BlackBerry and many more. If you fly solo you go round in circles.

The perfect chair

At the very top, the relationship between the CEO and the chairman is key. ‘I have a very close exchange with my chairman’, says Monika Ribar of Panalpina. ‘I try to talk to him, certainly at least once a week or even twice a week, to inform him, to talk to him, to also get his feedback.’

With boards becoming more independent and the chairman’s role being split from the CEO, the CEO–chairman–board of directors relationship will be increasingly crucial to how a company performs.

Historically, the CEO and chairman roles were often combined in American corporations. Separation is now commonplace thanks to corporate governance guidelines requiring greater distance between the board and the CEO to encourage objectivity.

A study by the governance ratings firm GovernanceMetrics International (GMI) found that 95 per cent of the FTSE 350 firms rated by GMI split the roles of CEO and chairman. In France, where the combined CEO and chairman has traditionally been a powerful force, there is now movement in this direction, with companies such as Renault and Carrefour splitting the roles. In Germany, the roles of the chairman as head of the supervisory board and of the CEO as head of the management board are separated in law.

More companies are splitting the chairman and CEO positions between two people. A survey by Institutional Shareholder Services of 1433 companies that make up the various Standard & Poor’s indexes, including the S&P 500, found that 41 per cent had separate chairmen and CEO positions in 2006, up from 37 per cent in 2005.

It is also notable that some high-profile CEOs have become chairmen of major corporations. This suggests that they see the roles as powerful rather than ambassadorial – examples include former Nokia CEO Jorma Ollia becoming chairman of Shell; and AstraZeneca recruiting Louis Schweitzer, the ex-Renault boss, as its chairman.

When it comes to healthy CEO–chairman relationships, best practice is rarely reported. Agreement between CEO and chairman is not a great media story. There is a wide range of approaches. Some chairmen are hands-on whereas others have a light touch. There is no formula. Successful instances often involve founders moving from the CEO’s job to become chairman. Consider Microsoft chairman and CEO Bill Gates handing over the CEO reins to long-time colleague Steve Ballmer in 2000; eBay company founder Pierre Omidyar becoming non-executive chairman with Meg Whitman as CEO; and Intel’s Andy Grove becoming chairman with Craig Barrett as CEO.

In reality, the most effective boards are high-performance teams. As with all effective teams, members have clearly defined roles, play to their strengths and complement each other. CEOs need to think of boards as part of their team rather than as a sometimes irritating supervisory body.

The board is seen by the leaders we talked to as a vital network. ‘I’ve heard it said that the board provides the cheapest advice the CEO will ever get. I’ve been a consultant for a large part of my career and, as a board member, the company and CEO have free access to me’, says Heidrick & Struggles board member Jill Kanin-Lovers. ‘That’s why I think who you put on your board also is very important. It is not uncommon when someone becomes the new CEO, and they take a look at the board, for them to say, “Hey, I could use maybe some counsel in this area and I don’t see it reflected on this board”, or, “You know, maybe there are folks on this board who I don’t think are giving me fresh thinking.”

Not only do we provide oversight, but we’re in essence a tool, a resource to the CEO, and they want to make sure they’ve got the right composition to reflect that.’

Feeling good, doing good, having fun

There is a final element to all of this: the leaders we have encountered over the years have always wanted to build something, achieve something fantastic, to do something special. Their motives go far beyond simply making money. ‘When I was asked if I wanted to lead Mumtalakat I knew that this was my opportunity to give something back to the country that has given me so much’, said Talal Al Zain of Bahrain’s Mumtalakat Holding Company.

Effective leaders are never one-dimensional. ‘Whether it’s skiing or travelling or reading or cooking, I’ve got all kinds of things that I’m interested in’, said Linda Wolf when we asked her about her interests. ‘Plus the not-for-profit area, I think that’s a place where you can take your business discipline and use it in a different way. It fulfils you in a different way because you’re giving back, you’re hopefully helping, you’re moving the organisation or project or whatever it is forward; but you’re doing it solely based on the fact that you care about it; you’re not getting any financial reward for it; you’re just getting the reward of helping somebody accomplish something.’

Says Gary Knell of Sesame Workshop: ‘At the end of the day, you’ve got to have fun at this job. When this stops becoming something that you get up in the morning and are really enthusiastic about coming in to tackle every day, it’s probably time to move on.’

Importantly, having fun increases productivity. It makes people work harder, faster, smarter. The reality is that firms that focus on fun are more productive. When companies show a commitment to something bigger than the profit motive, they build loyalty and show soul. Firms that focus on making fun a part of their culture build a better work–life balance, which in turn means healthier, more motivated employees. It is the same for those in top jobs, where CSR and philanthropy can provide a sense of purpose beyond hitting earnings targets.

To some this sounds superficial, but it’s not just about doing good, it also has to make sound business sense.

Resources

José Luis Álvarez and Silviya Svejenova, Sharing Executive Power, Cambridge University Press, 2005

Nathan Bennett and Stephen A. Miles, Riding Shotgun: The Role of the COO, Stanford Business Books, 2006

Marshall Goldsmith (with Mark Reiter), What Got You Here Won’t Get You There, Hyperion, 2007