Time for new metrics for leadership

value-proposition-1

Microsoft just became the most valuable company in the world.

This made big headlines, though very few people know the name of their CEO and few of the articles truly got into why his radically different style of humble leadership has been at the heart of that transformation. Yes, humility in leadership at the heart of the most highly valued company in the world.

My homepage begins with the words:

“Command-and-control leadership is losing its grip. A new way of thinking is emerging: leadership that embraces change as constant, encourages individual thought, relies on intuition more than data, fluidity more than hierarchy, trust more than fear, and the common good more than profit.”

Naturally, I’ve then written about new ways of leading, new ways of valuing, new ways of measuring what matters. Today, then, I’ll tie together some thoughts from earlier articles.

  1. how the CEO of Microsoft understands this
  2. how Patagonia also “gets” this, and
  3. how the broader corporate world doesn’t, and are still largely using dated metrics.

Time for change.

Time for for new metrics for leadership

We are what we measure – time for change

Let me start with an example of how the broader corporate world still is measuring the wrong things. Recently I wrote an article referencing the latest HBR table of the best-performing CEOs in the world, here are some snippets:

“We are what we measure” is an old adage, so today let me simply reflect on…

…the latest Harvard Business Review report on what they call “The Best-Performing CEOs in the World 2018

….I said about the HBR article “what they call” the best performing CEOs, as once again “we are what we measure” and the business world keeps focussing on the short term, on the “voting machine”, on purely financial metrics.

…To explain a little more, the “Financial Ranking” is all about shareholder return over the tenure of the CEO, and on this Reed Hastings, longtime CEO of Netflix, ranks 3rd overall out of 881 CEOs measured. However, on ESG (Environmental, Social and Governance), he ranks 873rd and 863rd overall. Yes, in the bottom 2% of the 881 CEOs measured. Still, we are what we measure. So a CEO who measures in the bottom 2% in ESG can still rank 83rd of 881 (or in the top 10%) of CEOs overall, so making the top 100 list of “The Best-Performing CEOs in the World”.

As I’ve written about before, I am working within a community focussed on developing Beautiful Leadership for Beautiful Business. As Alan Moore captures in his vision for such a future, “Beauty is the ultimate metric”, and the focus purely on financial ranking has not and is not leading to beautiful businesses.

How Patagonia “gets” it

In “Beautiful Leadership – Patagonia’s Righteous Flywheel” I wrote that Patagonia is:

“..an example of #BeautifulLeadership, of a company clear on who they are and leading from that space.

..a post on LinkedIn by Rose Marcario, CEO of Patagonia, titled “Our Urgent Gift to the Planet“, in which she noted, with powerful and strong language:

“Based on last year’s irresponsible tax cut, Patagonia will owe less in taxes this year—$10 million less, in fact. Instead of putting the money back into our business, we’re responding by putting $10 million back into the planet. Our home planet needs it more than we do.”

“Far too many have suffered the consequences of global warming in recent months, and the political response has so far been woefully inadequate—and the denial is just evil.”

“Taxes protect the most vulnerable in our society, our public lands and other life-giving resources. In spite of this, the Trump administration initiated a corporate tax cut, threatening these services at the expense of our planet.”

“In this season of giving, we are giving away this tax cut to the planet, our only home, which needs it now more than ever.”

Powerful, clear, intentional leadership, and also the type of #BeautifulLeadership focussed on being what Alan Moore calls a restorative business.

Now, some will be thinking that such leadership by their CEO may not be aligned to such concepts as “shareholder value” and other metrics from our deeply entrenched traditional economics models. Here is where the “Righteous Flywheel” comes in.

Earlier in 2018, Fast Company published a “long read” article linked from that shorter piece last week, called “How Patagonia Grows Every Time It Amplifies Its Social Mission“.

The article highlights how Patagonia’s CEO decided, the morning after the US Presidential election in November 2016, to “double down” on their focus as what I earlier called “an environmental activism movement masquerading as a large US corporation”.

I mean that in the most positive way. I love business, I love the way organising as a business can create value. However, let me be clear, I wish for a world where we define value in additive and restorative ways, in beautiful ways.

Value is not simply about shareholder value, we can no longer separate the traditional capitalist motives from the needs of our communities, our societies, our planet.

At the same time, it is in taking the best of what being a business means (whether you are a profit-focussed business, a charity, even a government, they are all a “business” to me) and then looking at a more rounded purpose and vision, that is where the future lies.

Profit and People and Planet. Those “three Ps” make for a restorative business.

Now that I have nailed my own colours to the mast, perhaps you can see ever more clearly why my homepage states my focus in my work as “I help visionary leaders see beyond their own vision”?

So, Back to Patagonia and that long read article.

Incited by Trump’s agenda, the company has upped its commitment to environmental activism, making an unprecedented bet on corporate social responsibility. This has served not only to energize product innovation and marketing but to grow the company’s brand awareness and sales. Marcario has overseen a quadrupling of Patagonia’s revenue in her decade-long tenure with the company, pursuing investments in sustain­able design and manufacturing and in startups allied with Patagonia’s mission.

The company has built a righteous flywheel, like an Amazon for do-gooders: The more it invests in its beliefs and its products, the better Patagonia performs, develops creative solutions, and maps out a blueprint for other businesses, big and small, to follow.

“Doing good work for the planet,” Marcario says, “creates new markets and makes [us] more money.” That’s the Patagonia way.

Humble Leadership

So, who is that CEO of Microsoft? His name is Satya Nadella, and should you search on his name on this site you will see him referenced a number of times.

Today I highlight one article: “Humble Leadership and Trust“, written in December 2017.

I will digress for a moment. The words referenced at the start of this article, the words that begin my homepage, were distilled by the genius team of AliMat Inc. over the course of summer 2018 from interviewing me, my clients, my writing. I met them through meeting Chip Conley earlier this year, who is now not only still my business hero, but also who I am happy to call my friend. Life works in mysterious ways!

So, another page that AliMat created for me from extracting from me the essence of me and my work is the #BeMoreYou page, in which I reference what I see as core attributes of #OpenLeadership, of the leaders who measure what matters, who are those who wish to:

  • Be Hungry
  • Be Humble
  • Be Brave
  • Be Open

So, in “Humble Leadership and Trust” I wrote:

The leaders we need now need HUMILITY and VULNERABILITY and at the same time absolute CONFIDENCE that the business or organisation will find the answers.

Together this means that the leader must have TRUST in their vision and TRUST in their people.

The role of Leaders now is to be “Keeper of the Vision” (my post on this here), and to be supportive and confident in the team to pose the right puzzles and ask the right questions needed to move towards and achieve that vision, then to solve the puzzles and answer the questions.

Satya Nadella of Microsoft has transformed that organisation, and perhaps the simplest example of what he has brought is shown in this article on “the best leadership advice in seven words”  and the seven words he used were :

Make it happen. You have full authority.

When Nadella took on the role of CEO in 2014, he said in an email to all staff:

“I am 46. I’ve been married for 22 years and we have 3 kids. And like anyone else, a lot of what I do and how I think has been shaped by my family and my overall life experiences. Many who know me say I am also defined by my curiosity and thirst for learning. I buy more books than I can finish. I sign up for more online courses than I can complete. I fundamentally believe that if you are not learning new things, you stop doing great and useful things. So family, curiosity and hunger for knowledge all define me.”

Curiosity.

Hunger.

Growth Mindset.

Humility.

Bravery.

Let us look to measure what matters. When we look to hire leaders, when we look to develop leaders, let us look for and grow leaders who have and wish to further develop such attributes.

Going one stage further, we all have leadership qualities, starting with self-leadership. The leaders of tomorrow are those who recognise this and embody #OpenLeadership.

Time for new metrics, starting with leadership metrics.


Also published on Medium.

Book a diagnostic meeting

Subscribe for Inspiration, Ideas, Tools

I offer you two newsletters seeking to offer inspiration to action, ideas and tools for leaders.

Open Leadership – Digest
Big Game Advisors – Ideas into Action