“Courage is the first of human qualities because it is the quality that guarantees all the others”…Winston Churchill.
Here’s how this plays out today.
Without doubt, our economy, corporate leaders are navigating through extraordinary uncertainty. Uncertainty equates to indecision. CEOs, in response to the unknown, have sought to preserve financial flexibility as an offset to conditions that were, and continue to be, choppy and unpredictable. Cash is viewed as king.
Boards, rightfully concerned, encouraged their CEOs to play it safe.
Yet, it takes courage to lead.
Now, the pendulum is beginning to swing. And, CEOs and their boards are feeling the pressure to move forward. Yet, there is a strong temptation to continue to “run” tight. Even as CEOs offer initiatives including proposing attractive acquisition opportunities, Boards of Directors are waving the yellow caution flag.
We have observed a heightened gearing inside the boardroom. Boards are seeking guidance on how to balance interesting opportunities with the risk of missteps and undesirable/ unintended consequences. Yet, wisdom is hard to come by these days.
Here is the essence of the situation and its dilemma.
Companies, in playing it safe by hoarding cash, may be an attractive target for an unwanted suitor as equity prices remain depressed, face increasing pressures from activist shareholders to efficiently deploy these troves of cash or return it to the shareholders via a special dividend, and/or utilize these funds to opportunistically “buy” growth.
Being both “hunter” and “the hunted” at the same time is vexing as corporate leaders and their boards sort out the uncertainties of moving on strategic opportunities.
This paradox has led our forward thinking clients to view the current situation somewhat untraditionally.
That is, uncertainty is now a “certainty” with no end in sight. This perspective of “certainty” translates to a different view of risk and by definition, requires different metrics and leadership navigation that takes into account that the signs about the future point in different directions.
And, this suggests a different expectation for leadership and how boards expect their corporate teams to act. The “leadership speak” we hear most often centers on discipline and adaptability with a large dose of courage.
First, our clients are seeking flexible leadership.
By that, we mean executives with a broad breadth of operating experience, who honor transparency, and with a comfort at dealing with unknowns. They seek executive teams interested in uncovering/driving opportunities quickly forward, adjusting to new conditions as they arise. We seek executives who expect and demand their corporate teams to be change agents, applying disciplined approaches, with little consideration about career preservation.
Secondly, our clients expect their leaders to fully examine the “safe heavens” of their organizations and crack the code of inefficiencies and ineffectiveness. This means thoroughly reviewing every aspect of their enterprises to seek out value and if it can’t be found, redirect critical resources elsewhere.
To maximize value requires the CEO and his/her leadership to demonstrate a high level of emotional intelligence and curiosity. This translates into a strategic thought leadership combined with a willingness to relentlessly dig into the details and challenge “sacred cows.” This is a real change as most large and mid cap CEOs are a bit removed from their day to day operations and their complexities.
Thirdly and most importantly, our clients are seeking true leadership courage.
This means making tough decisions today and yet, even though as a leader who may not be there to see its outcome, preparing the enterprise to succeed in the future.
All this translates to improving and upgrading executive talent. Our clients are cautious but realize that now is the time to add key executives with the prized experience at driving value in the certainty of uncertain times.
To win now, take advantage of uncertainty by upgrading your talent before it becomes scarce and pricey while retaining your best executive assets. Defend your strongholds while expanding your influence.
Your thoughts are most welcome and as always, please call on us as executive search needs arise.