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Within a few days of one another, the FT ArcelorMittal Boldness in Business Awards judging committee met in London and, during the World Economic Forum at Davos, in Switzerland, my Oxford colleagues released two new studies.
These were on the evolving role of the chief executive and the growing trend to define business in terms of “a broader purpose” — that is, one that benefited a larger set of stakeholders (customers, employees, suppliers and future generations) than would gain from simply increased profits and shareholder value.
The events in London and Davos turned out to be substantively connected.
My university colleagues and our research partner, Heidrick & Struggles, the executive search company, had interviewed 152 chief executives from around the globe to identify skills for 21st-century business leaders. We learnt chief executives believe they need to scan the world broadly to notice emerging interactions between global and local trends — something the research team calls “ripple intelligence” — and avoid tunnel vision.
One chief executive said for 30 minutes a day he intentionally reads about “seemingly irrelevant” phenomena to keep alert to a broad external environment. Some might argue the World Economic Forum provides chief executives with an institutionalised way of scanning the world for new insights into science and technology, social issues, emerging trends and their potential connections.
In reviewing our award candidates, it seemed clear they exemplify ripple intelligence. They appear to see around corners and connect new dots. My reaction to the work of many of the nominees was “where did that idea come from?”
They clearly had seen far beyond current products and what consumers say they wanted. Which focus group, for example, had asked for a polymer pellet to replace washing powder and reduce washing machines’ water usage by 80 per cent?
In terms of connecting the dots, another candidate’s business seeks to create jobs, curb traffic congestion and reduce families’ purchases of expensive capital goods (namely cars). We know it as Uber.
Chief executives reported that 80 per cent of their number doubt themselves before making big decisions, if perhaps only in private. (Another 20 per cent said they never doubted themselves — lucky them.)
Doubt is not ambivalence nor is it debilitating. Rather it reflects healthy self-awareness, which is then harnessed. In some instances, leaders use doubt to drive continuous learning, to seek a diversity of opinions from others, to seek peer mentoring, or to gather benchmarking.
Looking at our nominees, it is easy to imagine the constructive doubt these leaders must have felt — and how they used it to make bolder decisions with greater confidence.
One award nominee — Klarna, the Swedish online payments company — was incorrectly told the idea for its credit-scoring algorithm that would permit customers to pay for goods after receiving them was “unworkable”. We were told it “persevered” but a bit of healthy self-doubt must have followed its hearing that judgment.
To take another business case, consider Netflix and how when the DVD-by-mail model seemed dead, it reimagined itself not only with video streaming but also as a creator of original content. Is healthy doubt the new route to insight and success?
In Davos, colleagues at Saïd Business School launched a collaboration with EY, the professional services company, to explore how corporate “purpose” is linked to agility and transformation. In this first phase, my colleagues interviewed more than 20 chief executives of global companies about how they build such purpose into corporate initiatives.
Oxford also contributed to a companion EY survey of more than 400 global executives. Some 87 per cent of these said they believed orienting their firms around “purpose” (versus profits) would almost surely lead to increased financial returns (63 per cent), customer satisfaction (85 per cent) and social benefits (76 per cent). However, most acknowledged “purpose” was not yet the animating force in their organisations, with their strategies, product development functions and business models poorly aligned with their purpose.
This study suggested chief executives felt they functioned best when their organisational purpose, however imprecisely defined or poorly adopted, matched their personal values. I instinctively understand this statement: my contribution to the world is through education. This helps me get through budget meetings and personnel discussions knowing I support Oxford, which contributes to the world through fresh ideas and transformative education.
Our nominees are some of the most “purpose-driven” people and organisations to be found. They have a passionate view of the future, whether it be transforming the lives of people in Africa or helping people drive more safely.
They are not simply doing a job, or following textbook advice to be “purpose-led.” In some cases, their personal experience and purpose shines through, such as the multiple sclerosis sufferer who co-founded a firm to produce remote controlled exoskeletons that help paraplegics to walk.
While some may challenge the veracity or completeness of what chief executives have told us, or the sincerity of their commitment to purpose, the nominees demonstrate a form of leadership we can celebrate.
They tend to think and observe very broadly. They harness doubt like professional athletes exploit their nerves before they compete. They pick audacious goals and pick themselves up when they trip.
They are not the perfect “great men and women” portrayed in some business histories. They are very much imperfect but inspirational leaders who have a chance not only to make money but also to make our lives a bit better.
Some will succeed — and others not, at least this time — but we can celebrate their journeys and learn from their experiences.