OVER THE LAST FOUR YEARS, we have engaged with, learned from, and been inspired by thirty-six CEOs from around the world, all of whom share a higher ambition. These leaders are not content to just make their quarterly numbers; they are committed to creating institutions that sustainably win, with their people, their customers, their communities, and with their shareholders. These leaders are working to fully realize the potential of their firms to create superior and lasting economic value. At the same time, they are putting their shoulders to the wheel to create superior social value. And they seek to accomplish both goals simultaneously.
That is their higher ambition.
This ambition distinguishes the companies we profile in this book from those that focus primarily on building financial wealth and only secondarily pay attention to the social nature of their organizations. It also sets these companies apart from those that equate social value solely with corporate philanthropy or think of it as just giving back to the community; although these are worthy pursuits, they do not in and of themselves lead to the creation of a lasting and valuable social institution.
For each of the CEOs we include in this book, higher ambition—although defined with some individual distinctions—is similarly understood. By superior economic value, these leaders typically mean that the company consistently meets or exceeds short-term performance expectations, outperforms its industry peers for a meaningful period of years, and does both in a way that contributes to long-term advantage. By superior social value, our leaders mean that they are building lasting institutions that both contribute to the social good (building a better world) and create social capital (relationships with employees, customers, communities, and others characterized by distinctive levels of trust and mutual commitment). Higher-ambition leaders understand that these two dimensions of social value are mutually reinforcing. Contributing to the social good builds trust and commitment, while this commitment in turn is reinforced by the sense of meaning created by contributing to building a better world.
We should also make clear that, for the CEOs of these companies, higher ambition does not pertain to personal gain. These leaders are, of course, ambitious and successful people who push themselves hard and achieve a great deal, but their ambition is distinctly not about maximizing organizational power or being the highest paid CEO.
The higher-ambition CEOs we interviewed operated in a wide variety of industries across three continents. They led private companies, public companies, nonprofits, and hybrids; some were very large, some relatively small; some had existed for over a century, others were start-ups. Some of the leaders had been at their posts for extended periods of time; others had served more briefly. They came from a variety of cultures, had varying educational and professional backgrounds, and lived very different kinds of lives.
They had, however, certain important characteristics in common. None claimed to be superstars or models of management perfection. They spoke to us with candor, insight, detail, and a degree of humility about themselves, their companies, and what they do and don’t do. Many told us to highlight the collective contributions of the team around them more than their own. They revealed themselves to be thoughtful practitioners of the craft of leadership, whose insights, taken together, define an approach to leadership that is distinctive and substantially different from mainstream practice. They all were uncompromising in their commitment to simultaneously create both economic and social value; neither financial gain nor social worth alone was a sufficient outcome for any of them.
Our research method was quite simple. We decided to work from the “leaders out” rather than from the “scholar or consultant in.” That is, beyond the idea that today’s exemplary company is the one that creates both economic and social value, we did not set out to prove a hypothesis about how such value is actually achieved. Rather, we chose to listen carefully, observe closely, then analyze the material, and, finally, synthesize what we had learned.
We did not intend this study to test a hypothesis nor did we set out to show that companies that outperform their peers do so because of their values or people-centric cultures. There are a number of studies that have already shown that relationship.1 Rather, we were interested in learning about an area that is far less well understood: the critical roles and practices of leadership that contribute to creating superior and sustained economic and social value. We sought leaders across a wide range of industries and geographies with sufficient commitment, experience, capability, and self-awareness that they had something genuine and important to say on this topic.
We make no claims that the leaders we spoke with are the “best” CEOs, rigorously chosen from a comprehensive scientific sample, or that any of these CEOs are without their faults. (In fact, one of the defining characteristics of these leaders was a greater awareness of their limitations than some of their peers typically have.) This is what our more academic colleagues would call an exploratory or hypothesis-generating study. What we were after was not scientific proof but practical insights from CEOs with something genuine and thoughtful to say. (See table I-1 for a list of the leaders and companies in the sample. Also see the appendix for more details on our research methodology.)
TABLE I-1 | ||
Leaders and companies in the sample | ||
Leader | Organization | Country |
Anu Aga | Thermax, Ltd. | India |
Torben Ballegaard Sørensen | Bang & Olufsen Group | Denmark |
Carl Bennet | Getinge Group | Sweden |
Paul Bulcke | Nestlé | Switzerland |
Christian Clausen | Nordea | Sweden |
Bertrand Collomb | Lafarge | France |
Douglas R. Conant | Campbell Soup Company | United States |
Anders Dahlvig | IKEA | Netherlands/Sweden |
Roger Dickhout | Pineridge Group | Canada |
Peter Dunn | Steak ’n Shake | United States |
Russell Fradin | Aon Hewitt | United States |
Kenneth W. Freeman | Quest Diagnostics | United States |
William W. George | Medtronic | United States |
Val Gooding | BUPA | Great Britain |
Steven H. Holtzman | Infinity Pharmaceuticals | United States |
Sherrill W. Hudson | TECO Energy | United States |
Leif Johansson | Volvo Group | Sweden |
Gary C. Kelly | Southwest Airlines | United States |
David H. Langstaff | Veridian Corporation | United States |
Allan Leighton | Royal Mail | Great Britain |
David H. Lissy | Bright Horizons | United States |
Edward J. Ludwig | Becton, Dickinson & Co. | United States |
Anand G. Mahindra | Mahindra & Mahindra | India |
Dale F. Morrison | McCain Foods Ltd. | Canada |
N. R. Narayana Murthy | Infosys | India |
Archie Norman | Asda | Great Britain |
Jorma Ollila | Nokia | Finland |
Stefan Persson | H&M | Sweden |
Carlo Pesenti | Italcementi Group | Italy |
Dick Pettingill | Allina Hospitals & Clinics | United States |
Peter Sands | Standard Chartered Bank | Great Britain |
Marjorie Scardino | Pearson | Great Britain |
Tim Solso | Cummins Inc. | United States |
Douglas W. Stotlar | Con-Way Inc. | United States |
Ratan N. Tata | Tata Group | India |
Brian C. Walker | Herman Miller | United States |
To find these CEOs, we relied on recommendations from trusted colleagues, our own direct experience in working with some of these leaders, as well as the usual lists of most admired companies and best places to work. As a check on our judgment and to keep ourselves honest, we applied two tests:
The CEOs we profile here are not the first to have built and led businesses that achieved superior financial results and were also seen as valuable social enterprises, nor is this the first book to have documented such companies. Our higher-ambition CEOs have read and admired such works as In Search of Excellence, Built to Last, and Good to Great, and were proud to think of themselves as following in the tradition of the companies profiled in them. Michael Porter and Rosabeth Moss Kanter have also written about the symbiotic relationship between social and economic value.2 We also see the themes identified in this book as quite consistent with those we have found in our own previous work, including most recently, Mike Beer’s book, High Commitment, High Performance.3 There are, however, two important differences of note, first about the current business context and, second, about this book.
Higher-ambition CEOs are operating in a complex, pressurized global business environment that encompasses a greater diversity in national cultures, ethnicity, gender, and religion than ever before. In addition, they have had to build and sustain their companies in the context of an extremely well-developed market for corporate control, where the survival of the CEO—and the company itself—can depend on meeting quarterly earnings goals. This later factor, along with the truly extraordinary rewards that the CEO who pushes for glittering short-term financial results can reap, has helped to create the massive crisis in corporate legitimacy that we see unfolding around the world. That crisis is likely one of the reasons that the higher-ambition CEOs agreed to talk with us. They wanted to tell their stories and to differentiate themselves from those corporate executives who were grabbing the headlines, often in less-than-admirable ways. They wanted to distinguish their strong, grounded companies from those constructed on shaky foundations.
As for this book, our goal goes beyond the descriptive to the prescriptive. The CEOs that we describe here have been converging on a distinctive way to lead and manage that they, and we, believe delivers better and more sustainable results in both economic and social terms. Indeed, their simultaneous pursuit of these dual objectives, we assert, is precisely why they are able to succeed. As we will describe, by focusing on the social dimension, they are able to create an organizational model that is both higher energy and lower friction, which allows them to succeed in economic terms. In turn, by succeeding in creating economic value, they are able to invest over time in ways that deliver superior outcomes to their key stakeholders and society as well as sustain the institution’s social fabric. As one higher-ambition CEO, Peter Dunn, explained to us, “Creating social value unlocks the dormant creative energies that exist in all of us, which in turn creates outstanding financial results. Conversely, with growing profits, you are able to attract and energize people over time. Creating both social and economic value directly reinforces the primary motivators of people: purpose, autonomy, and mastery.”
Yet, if leading to create both economic and social value is so powerful, why do so few current CEOs pursue this path? We believe this is not primarily due to lack of good intent, but because productively managing the tension between financial results and social value is far from easy. It requires a CEO to make tough business decisions such as restructuring or outsourcing—which may be necessary for a firm’s financial viability—in ways that don’t compromise an institution’s core human values and integrity. It requires the CEO personally to move out of the protective cocoon created by support staff, advisers, and counselors, and corporate jets and comfortable perks to confront the truth about the firm’s (and their own) strengths and weaknesses.
To take on such work is tough enough. But CEOs have, in our opinion, been less inclined to do so because they don’t have enough models to emulate, nor is there a rich literature that sets out lessons and describes in detail the methods, practices, and tools that higher-ambition leaders can use to achieve their goals. It is this urgent need for grounded and specific leadership methods and behaviors to which we have responded with this book.
Our focus here is to go beyond a discussion of the general nature of higher-ambition leadership and provide a compendium of the practical. Collectively, these leaders are pointing the way to a distinctive leadership model that we illustrate through their individual practices. Exactly what do our leaders do? How do they go about their tasks and fulfill their responsibilities? Of course, not all of these leaders exhibit all elements of the model: what we are offering is an integrated picture, synthesized from their individual examples.
Our hope is that our approach—which seeks to deliver deep understanding along with useful advice, all originating with leaders who have been there and done that—will provide readers with new insight, new inspiration, and new courage in shouldering their own work of leadership and in pursuing and achieving their own higher ambition.
We cannot reduce higher-ambition leadership to a simple checklist of key success factors or to a two-by-two table of leadership attributes; the whole goes well beyond the sum of the parts. With this in mind, in part I, “Higher-Ambition Leadership in Action,” we provide an integrated view of higher-ambition leadership.
In part II, “The Disciplines of Higher-Ambition Leadership,” we highlight the distinctive approach that higher-ambition leaders take to the core disciplines of general management. At the end of each chapter in this part, we provide a summary table that shows how higher-ambition leaders both embrace and go significantly beyond traditional management “best practices.”
In part III, “Moving to a Higher Ambition,” we take a step back and consider the broader implications of what we have learned about how leaders, companies, and business as a whole can more rapidly and powerfully achieve their higher ambitions.
The reader can find additional supporting materials on higher-ambition leadership at www.higherambition.com.