Leading from the Top

It's tough at the top – so much so that the signs of burn out are growing among leaders with 72% of business leaders often feeling used up by the end of the day according to the latest DDI global leadership forecast 2023.

That’s why now is such an important time for many leaders and their teams to pause and take some time away from their business. This time is crucial to recharge, gain perspective and come back energised in 2024.

When you do come back what are the challenges you will have to contend with going into 2024.

• ?? Having a strategy & understanding the impact of AI in your industry?
• ?? Supporting your managers with the right work culture?
• ?? Completing the digitalisation of your core business?
• ?? Finding ways to grow effectively and create value?
• ?? Building resilience to cope with disruptive events?
• ?? Continuing to stand out from the crowd?
• ?? Embracing Green technology?
• ?? Capitalising on uncertainty?

In this latest edition of Breakthrough Leadership – “Leading from the Top” – I wanted to explore and discuss some of these challenges that many leaders, founders, CEOs and entrepreneurs are having to deal with to give themselves the best possible opportunities to grow their businesses.

(1) What impact is generative AI having on your industry and do you have a strategy?

Around the world thousands of companies are transforming their business activities by finding ways to interface with generative AI and leverage its potential power. Leaders really should understand the potential impact that Gen AI has on their industry and the practical options they can take to ensure they are not left behind.

A lot of the work I do relates to training and development of people. In this sector AI-powered simulations and virtual reality environments could offer personalised and immersive learning experiences. Imagine a training program that incorporates generative AI to create dynamic and realistic virtual scenarios. Leaders and executives could potentially immerse themselves in a simulated business environment where they face challenges and make decisions based on real-time data and feedback generated by the AI system.

The AI system would need to generate realistic scenarios, and have the potential to adapt to the leader's decisions and actions. It could also provide personalized feedback on the strengths and areas for improvement, highlighting the consequences of different decisions in a dynamic business context. It could adapt the complexity of scenarios to the leader's skill level, ensuring a challenging yet supportive learning environment.

It remains to be seen whether these potential solutions are realistic enough to allow leaders to practice decision-making, problem-solving and interpersonal skills and embed these into the culture of an organisation. I will certainly be tracking developments in this area and perhaps trying some of this out in future.

(2) What culture are you building to support your teams and management?

Creating the right working culture is tough. You want to inspire and motivate your people. To do this you need to provide opportunities for your people to grow their skills and advance their careers. At the same time you want to support your employees and middle managers without pressurising them into premature promotions. In fact organisations that prioritise the development and well-being of their middle managers, recognising that not everyone is ready for immediate advancement, often foster a positive and growth-oriented environment.

The following global organisations recognise the importance of fostering a positive culture by supporting middle managers in their current roles, offering development opportunities without the undue pressure to move up the organizational hierarchy prematurely. This approach contributes to employee satisfaction, loyalty, and the overall success of the organization.

P&G is known for its commitment to leadership development. The company provides extensive training and mentorship programs for middle managers, focusing on skill enhancement and career growth without the expectation of rapid promotions.

Microsoft encourages a growth mindset and invests in the continuous development of its employees. The company provides resources and programs for middle managers to enhance their leadership skills without the implicit pressure to move up the corporate ladder quickly.

The Coca-Cola Company emphasises leadership development at all levels. The organisation provides middle managers with opportunities for skill-building, exposure to cross-functional experiences, and mentorship.

(3) How much of your core business have you digitalised?

Most organisations have been digitalising their organisation for some time now. For many organisations it’s important to complete this process and exploit the benefits before getting distracted with new technologies like AI. As always it’s about focusing on priorities and ruthlessly executing. So as you go into 2024 check you are completing the implementation of the most important elements of your core digital technology so you exploit future opportunities far more effectively – including AI.

To illustrate this point imagine being a medium-sized company that is, for example, grappling with outdated HR processes and systems. Your organisation is still heavily reliant on manual paperwork for recruitment, employee onboarding, performance management, and other HR functions. The lack of a unified digital platform hampers efficiency, causes delays, and results in suboptimal employee experiences. Would you not seek to get your infrastructure, data quality and digital tool adoption right first before seeking to integrate AI into your organisation?

The first step for this organisation might well be to invest in and implement a cloud-based HRIS platform to centralise HR data, automate routine tasks, and provide real-time access to information. Secondly they might want to adopt a digital applicant tracking system to optimise hiring workflows and candidate experiences. There might also be opportunities to create employee self-service portals, performance management tools and training and development platforms reduce the administrative burden, streamline processes and facilitate ongoing development of employees and access to resources.

(4) How are you finding ways to grow effectively and create value.

Leadership teams are always looking for growth, but the right path is never always clear and there are normally many ways to achieve it.

Sometimes it just requires you to “Focus on growth in your core business” - without it you can’t win. Sometimes you need to “Grow from where you know” – this can be done, for example, by improving your sales productivity or accelerating healthy organic growth with pragmatic acquisitions.

Many of the most successful businesses in the world have found innovative ways to maintain value-creating growth by building on their core business.

Apple has consistently expanded its ecosystem by introducing services like Apple Music, Apple TV+, and the App Store.

Amazon Web Services (AWS) is a prime example of how Amazon leveraged its expertise in managing vast amounts of data for its e-commerce operations to create a highly profitable cloud computing business.

Google's core business is search and online advertising, but Alphabet, Google's parent company, has diversified into various areas such as self-driving cars (Waymo), life sciences (Verily), and smart cities (Sidewalk Labs).

Tesla has not only focused on electric vehicles but has also ventured into energy storage (Powerwall, Powerpack, and Megapack) and solar energy solutions (Solar Roof). By integrating energy storage with renewable energy generation, Tesla has expanded its impact on the clean energy ecosystem.

(5) How are you building the resilience of your organisation to cope with disruptive events?

In recent years the global geopolitical order has proved very tricky for experts to predict. Building resilience involves preparing for and mitigating the impact of unexpected and potentially disruptive events, including Black Swans (high-impact, low-probability events) and Grey Rhinos (known risks that are often neglected). While it's challenging to find specific instances of organisations addressing such scenarios due to the unpredictable nature of these events, some organisations and governments have demonstrated a commitment to enhancing geopolitical resilience.

Many organisations incorporate risk management, scenario planning, and resilience-building measures into their operations. The following examples illustrate how organisations from different sectors work to enhance their preparedness and adaptability in the face of geopolitical uncertainties.

The World Economic Forum regularly publishes the Global Risks Report, which identifies and assesses a range of global risks, including Black Swans and Grey Rhinos. The organisation brings together leaders from various sectors to discuss and develop strategies for managing these risks.

RAND Corporation is a research organisation that conducts studies on various geopolitical and security issues. Their research often includes scenarios that explore potential Black Swan events and Grey Rhinos. By providing insights and recommendations, RAND contributes to the resilience of governments, institutions, and businesses in preparing for a range of geopolitical challenges.

The European Union Agency for Cybersecurity (ENISA) focuses on addressing cybersecurity risks, including those with geopolitical implications. The agency works to strengthen the cybersecurity posture of EU member states, acknowledging the evolving nature of cyber threats as potential Black Swans and Grey Rhinos. By promoting collaboration and best practices, ENISA contributes to the resilience of the European Union in the digital age.

(6) How do you stand out from the Crowd?

Knowing the super-power of your business and what makes it stand it out from the crowd is critical in today’s highly competitive markets. If you want to avoid competing in a commoditised market be crystal clear about your unique capabilities and consistently deliver these exceptionally for your customers. This will underpin your success and be what you are remembered for.

Businesses with "super powers" often excel in delivering exceptional value or experiences that set them apart from the competition, making it difficult for them to be commoditized.

Zappos is famous for its outstanding customer service. The company has built a reputation for going above and beyond to satisfy customers, including free shipping both ways and a 365-day return policy.

Disney's super power lies in its ability to tell compelling stories and create immersive entertainment experiences.

Costco's super power lies in its value-driven approach and membership model which offers bulk purchases at competitive prices to its members.

Amazon's ability to deliver products quickly and reliably, coupled with its emphasis on customer convenience through features like Amazon Prime, has made it a dominant force in e-commerce. The company's logistical prowess and commitment to customer satisfaction contribute to its standout position.

(7) How is your business embracing green technology?

To preserve our planet for the future thousands of green technology businesses need to be created and funded in every part of the energy transition system. Leaders need to step up, collaborate and take action. How far did COP28 go to enabling this? There was some progress in getting commitments to phase out fossil fuels, but it’s yet to be seen if this translates into effective action that will have a material impact.

There are a number of companies out there right now that showcase the diversity of green technology businesses contributing to the energy transition system. Whether through advancements in renewable energy generation (Orsted’s offshore wind energy), energy storage (Enphase energy) , or electric mobility (Tesla electric vehicles). These businesses play a vital role in creating a more sustainable and environmentally friendly energy landscape. But of course there need to be many more to create meaningful results and momentum.

Vestas is a global leader in wind turbine manufacturing. The company provides a wide range of onshore and offshore wind turbines, contributing to the growth of wind energy capacity globally. Vestas plays a crucial role in harnessing wind power for clean and sustainable electricity generation.

Enphase Energy specialises in solar microinverters that optimize the performance of solar panels at an individual level. They also offer energy storage solutions, enabling homeowners and businesses to store excess solar energy for use during periods of low sunlight or high demand.

ChargePoint is a company that specialises in building and operating electric vehicle charging networks. Their infrastructure supports the adoption of electric vehicles by providing convenient and accessible charging solutions, addressing a crucial aspect of the transportation sector's transition to sustainability.

(8) How do you capitalise on uncertainty?

Many companies look for economic certainty when putting plans in place for their organisation. The fallout from Covid and disruption from conflicts like that in the Ukraine have meant getting macroeconomic certainty is unlikely to happen.

Leading organisations are able to find ways to capitalise on this uncertainty. They are able to spot opportunities at the bottom of cycles where they tend to invest, and, at the same time are able to mitigate risk. These organisations are often highly effective at scenario planning and identifying actions they need to take no matter the economic climate.

Successful organisations often employ a combination of scenario planning, diversification, and strategic investments to navigate uncertainties and position themselves for growth when economic conditions improve. The following examples highlight the importance of strategic planning, adaptability, and seizing opportunities during economic downturns.

Berkshire Hathaway, led by Warren Buffett, is known for its value investing principles. During economic downturns, Buffett has historically seized opportunities to invest in undervalued companies. For example, during the 2008 financial crisis, Berkshire Hathaway made strategic investments in companies like Goldman Sachs and Bank of America, capitalising on the distressed market conditions.

McDonald's is recognized for its ability to adapt to economic cycles. During economic downturns, the company has emphasized value menus and promotions, attracting budget-conscious consumers. This strategic shift has historically helped McDonald's maintain customer loyalty and even expand market share during tough economic times.

Johnson & Johnson, a diversified healthcare company, has demonstrated resilience during economic downturns. By maintaining a diverse product portfolio spanning pharmaceuticals, medical devices, and consumer health, the company can navigate economic volatility. This diversification strategy helps buffer the impact of economic cycles on its overall business.

I hope you found this edition of Breakthrough Leadership – “Leading from the Top” – thought provoking, insightful and relevant. Let me know if any of these topics resonated with what you have to contend with going into 2024.

My name in Mark Freer, I specialise in Leadership development and executive coaching. If you are looking to optimise your energy and impact as a leader going into 2024 please get in touch to explore ways to experience some of the programmes I offer. www.headsupandfreer.com

In the meantime I wish all my readers a very merry Christmas and a happy, healthy and successful 2024.