Resilience: How ethical business leaders can build their ability to bounce back

 “We want to stay a family business. We want to be able to think long term. We want to be able to concentrate on the values—the ethical and moral values, of course that we have…”
Sir James Dyson, in Boldness in Business, FT.Com March 2018

 

Ethical business leaders develop their resilience to impressive levels.

Apart from being adept at bouncing back from adversity, they know resilience helps define their existence and inspires it. Dyson’s personal story is not unique. Other leaders too grow their resilience, often without ever bothering to think: “I’m being resilient.”

His now familiar tale from struggling inventor to world acclaim combines remarkable determination with consistent creativity. Togetherthese add up to formidable levels of resilience.

And if there’s one consistent piece of advice about success, he and other leaders receive from those they admire and from an ever-expanding army of leadership “experts” it’s

The Harvard Business Review for example, confirms its “authors over the years have offered “an astonishingly wide range of advice” about bouncing back from setbacks, both large and small.

Route to resilience

 

We can view resilience through two lenses. The first is Bounce-back-ability. This is your ability to rebound  despite set backs, obstacles and a rock-strewn route to success.

The second lens is Lack of resilience. This shows lessons arising from leaders who don’t bounce back. We may briefly glimpse them before under-powered resilience forces them into some other mode or role—permanent or temporary.

For example, in 2011 Lloyd’s Banking Group won a blaze of publicity by appointing Antonio Horta-Osorio as CEO. He was hired to guide the part state-owned Group back to health.

Within a few weeks though, after suffering five sleepless nights, Horta-Osorio finally agreed he had a problem: unacceptably high levels of stress. Just eight months in at Lloyd’s top job he took a much-needed stress break.  To the shock of the banking industry he admitted himself to a London clinic,

The bank’s terse statement to the stock exchange merely said its chief executive was temporarily stepping back “due to illness”. He was done in by stress and exhaustion, brought on by working round the clock, seven days a week. Ironically, the news came on National Stress Awareness Day.

His career as well as his marriage seems to have survived the experience. Now he claims to arrive home with his family every night and is in bed by 10:30 p.m. He doesn’t read emails or take calls between 7 p.m. and 7 a.m. He eats more protein and less carbohydrates, and has learned how to be more patient.

“And I became a better person, more patient, more understanding and more considerate. It was humbling but you learn…. I thought I was Superman. I felt I could do everything. The burnout showed me I was not Superman.  

 

“Many CEOs I speak to are on the verge of exhaustion “says Steve Tappin, an executive coach and co-author of a book about CEOs. He points to the large number of CEOs who must deliver against a background of high expectations and low or zero growth. For example 2017 saw a raft of chief executives leave their companies.

Some exits were expected and came after years of service. Others were more surprising, victims of low levels of resilience,  brought on after the shock of wrongdoing—theirs or someone else’s in their companies. The failures offer lessons about the importance of transparency, accountability, how to handle shifting marketplaces, and stress management.

A poster child for these lessons is Uber’s controversial founder and now ex CEO. He appeared resilient. Until he wasn’t.

Travis Kalanick officially resigned in June when important personal survival lessons emerged. The main one being that simply staying resilient in the face of reputational disaster seldom works. It takes much more than that.

 

Senior leaders whose resilience
was sorely tested

Jeff Kinder, CEO of Pfizer who resigned saying the demanding role had worn him out; “The combination of meeting the requirements of our many shareholders around the world and the 24/7 nature of my responsibilities has made this period extremely demanding on me personally.”

Andy Hornby, former CEO of HBOS then Boots resigned to take a break “After an intense last five years as CEO of two major companies, I have decided to take a few months break and, having discussed it with the board of Alliance Boots, to stand down from my post as group chief executive.”

Jospeh Lombardi, Chief Financial Officer Barnes and Noble, abruptly quit the struggling US bookstore change as a result of “exhaustion depression – “it was like disappearing down a dark tube”. He couldn’t make decisions, lost weight and everything seemed pointless.

John Binns a high-flying partner at accountancy firm Deloitte for more than five years suffered from a worsening depression – “it was like disappearing down a dark tube”. He couldn’t make decisions, lost weight and everything seemed pointless.

James Green, former CEO of Giant Realm, began dreading his daily commute through New York’s Penn Station. Though emotionally drained, he never hinted at his condition. Instead, the stress led him to sell off his company.

 

Yishan Wong CEO of Reddit, a social news site, resigned saying “I’m basically completely worn out, and it was having significantly detrimental effects on my personal life,”

 

  

The VUCA challenge

This cumbersome acronym was invented by the US military in the late 1990’s. It describes an environment that’s Volatile, Uncertain, Complex and Ambiguous. Just right for battle fields. Yet it’s also caught on in business since in various forms VUCA happens there too.

All business leaders must deal with VUCA but ethical leaders tend to have a more sophisticated appreciation of it. For instance they usually make more systematic effort at risk assessment. They also seek out longer term strategies that can help them cope with set backs and obstacles.

On its own, being ethical is not enough to ensure a leader’s personal success. Though it certainly helps, particularly over the longer term. There are two key facts emerging from research factors that can make a big difference to whether the leader is resilient when facing a VUCA challenge:

  • Desire to leave a legacy
  • Strong personal values

These drive many ethical leaders. They help feed their relentless focus on making a social difference. It also primes their longer term view. For instance in 2017 Unilever’s chief Paul Polman came out fighting fending off the Kraft Heinz’s £115bn hostile takeover bid. His heroic efforts defeated the unwelcome invasion in a weekend. Polman courage

He continues to defend his company’s “inclusive capitalism” business model.  He persists in championing the returns Unilever shareholders have enjoyed during his eight years at the head of the Dove soap-to-Lipton tea consumer goods giant.

And he keeps trying harder than ever to provoke a wider debate about the perils of short-termism in business. This is CEO resilience in action.

Measuring Resilience

Resilience is more than just recovering—the bounce back. It also includes reacting in responsible and mindful ways to serious setbacks and challenges. Almost without exception Boards of Directors say they want two qualities in a CEO:  Integrity and resilience.

Why? Because they transcend any single business situation. Quite simply they help leaders to handle almost any adversity.

But such valued qualities are still hard to measure.Any metric will be an approximation, not a sure-fire statistic.  Most of the attention around choosing a CEO for example, relies on observable personality traits, such as charisma, influence and passion.

If we use approximations for resilience what should we choose? According to some recent research on integrity and resilience of leaders, there are contradictory traits of leaders who can navigate through VUCA. 

First, executives high in integrity—i.e. ethical leaders, tend to be more likely to score high on the ability to

  • Connect with others
  • Be vulnerable
  • Be reluctant to take risks

Second, leaders those leaders perceived as having strong integrity do not necessarily score well on: the ability to galvanize people into action; having a high tendency to take risks, or the ability to be disruptive.

In an effort to produce an approximate measure of resilience Management Institute Roffey Park created a Resilience Capability Index. This uses an ultra simple questionnaire approach—see below 

An approach developed by PWC looks at resilience from an organisational rather than a personal perspective. This relies on variables such as the ability to respond to change and the organisation’s relationships with customers, business partners, and other stakeholders.

The PWC variables for measuring organisational resilience uses six forms of organisational behaviour: Coherence, Adaptive Capacity, Agility, Relevance, Reliability, and Trust

Zenger Folkman a US consultancy specialising in strengths-based leadership has developed further ways to identify resilience  These include leaders who must be coachable, build trusting relationships, develop others and are decisive. It collected data on more than 500 leaders. Using views from managers, peers, direct reports and others on 40 behaviors. What emerged was

  • “Most resilient leaders are also viewed as the most effective leaders”.

Yet few attempts to measure resilience fully acknowledge the importance of integrity, and ethics as underpinning the ability to be resilient. 

Distilled Wisdom

Recent years have seen considerable advances in understanding the pressures and resilience demands face by leaders. These plus the large amount of practical wisdom offered by leaders themselves, suggest some practical ways ethical leaders can build their resilience. 

 

  • CHANGE: Build situational awareness through embracing change; accept the need to adapt and maintain a realistic perspective
  • VALUES: Be guided by your values and trust your judgement; resist short term pressures to cut corners or just go through the motions in some way
  • STEPS: Focus on concrete steps to bring ethics and compliance alive for others; don’t be satisfied with elaborate rules and words.
  • CHALLENGE: Be willing to challenge other senior leaders to embrace accountability and transparency
  • SIGNS: Demand evidence that ethics and compliance programs are effective and responsive to change
  • WALK: Get out there and make contact with stakeholders i.e. walk the walk.
  • CONSCIENCE: Pursue corporate conscience through promoting values and ethical culture, if necessary against the resistance from other stakeholders.
  • RESIST TRADE OFFS: Refuse to accept a trade off or “choice” between ethical business practices and profitability. The two are inextricably linked.
  • LEARNING: When misconduct occurs make sure it’s properly analysed and the lessons learned and shared with employees.
  • NO QUARTER: Support effective sanction or penalties on senior executives and high performers involved with misconduct
  • CELEBRATE: Ensure there is proper reward and recognition for ethical conduct, don’t just take it for granted.
  • GOALS: Set realistic goals and establish a clear sense of purpose that you can explain with enthusiasm to others; each day, take one small action to move forward.
  • CHALLENGES: View challenges as opportunities, not rocks in your way; take positive action to tackle them and avoid passivity
  • NETWORKS: Build your networks and set out to connect with others and encourage collaboration, not isolated working
  • STRESS: Accept it’s a real factor in your life and must be managed; practice optimism; don’t blame yourself and resist thoughts such as “I can’t do this”. 

 

  SOURCES

  • J. Folkm, 7 Ways To Become A More Resilient Leader, Forbes, New Research: April 6, 2017
  • The Resilient Leader Debunking the myths and growing your capabilities, Roffey Park
  • N. Pratly, Paul Polman: ‘I could boost Unilever shares. But cutting costs is not our way’, The Observer, 20 May 2017 
  • Chesley, Creating a Culture of Resilience, What really enables organizations to survive and thrive? Insights Ethisphere
  • Roffey Park, The Resilient Leader, Debunking the myths and growing your capabilities
  • 6 traits that define a resilient business leader, Laura Gitman and Anita Hoffmann, Greeen Biz, Monday, July 13, 2015
  • C. Alexandrakis and D. Stamoulis, Integrity, Resilience, and the Power of Quiet Leadership, Board & CEO Advisory Group, December 18, 2017
  • A.Hill, Do not take it personally: business leaders working under pressure, FT 11 March 2018

 

 

 

 

 

 

 

 

 

 

 

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