Authors: Michael Beer, Flemming Norrgren, Russell Eisenstat, Nathanial Foote and Tobias Fredburg
Publisher: Harvard Business Review Press, 2011
ISBN-13: 978-1422159743, 218 pages
Concentrating solely on the bottom line may produce short-term results, but it won’t provide the basis for long-term success or contribute to the greater good. Only “higher-ambition leaders” — CEOs who focus on their company’s social contribution as well as its performance — can do both. Professors Michael Beer and Flemming Norrgren, working with co-authors Russell Eisenstat, Nathaniel Foote and Tobias Fredberg, interviewed 36 successful CEOs who exemplify higher-ambition leadership. The authors base their higher-ambition leadership model on these leaders’ principles, processes and behaviors. getAbstract believes the authors hit an innovative chord and fill a gap that MBA programs leave open by concentrating primarily on increasing shareholder value. These tales of determination, vision and courage will help leaders lift their eyes from today’s bottom line and look beyond the horizon.
“Higher ambition” leadership in action
Doug Conant became CEO of Campbell Soup Company in 2001. The company’s struggles at that time dated back to the late 1990s, when it raised prices to boost short-term profits and thereby opened the door to more aggressive competitors. The company compromised its product quality when it slashed costs rapidly. Campbell’s even took the chicken out of its signature chicken noodle soup. These decisions are an example of how focusing only on shareholder value undermines the long-term viability of a business. Conant realized that he had to reverse Campbell’s “doom loop.”
Conant drove Campbell’s extraordinarily successful business and cultural transformation over a decade by utilizing four strategies that are key to higher ambition (HA) leadership. First, HA leaders “see the glass whole” and face reality without minimizing their challenges. Conant was honest with his board and investors that achieving a turn-around would not be easy, and he didn’t overpromise.
Second, leaders “envision the potential” of their organization and its people. Conant believed that despite its short-term challenges, Campbell’s success required building up, rather than walking away from, its historic capabilities and brand and the passion of its people. One way he powerfully sent this message was by committing to revitalizing the company’s oldest brand, condensed soup.
Third, higher ambition leaders “set worthy goals.” Conant created the “Campbell Success Model,” a three-pronged strategy that emphasized not just “winning in the marketplace,” but also “winning in the workplace” and “winning in the community.”
Fourth, HA leaders “don’t compromise on the things that matter.” As Conant explained, he was “tough on standards, but tender with people.” For instance, he held managers accountable not just for strong financial performance but also for their employee engagement scores. The organization ultimately achieved the 95th percentile in comparison with other companies.
Achieving the simultaneous solve at the “Banana Skin Bank”
When Peter Sands became CEO of Standard Chartered Bank (SCB) in 2001, the mid-sized institution was plagued with erratic fiscal results. The media referred to SCB as the “banana skin” bank because it “slipped up” so often. By 2010, Sands had steered SCB to profitability and had made it a desirable place to work. He had also built a leading position in international markets.
How did Sands achieve this turnaround? …