Want to be a better leader? Start following the data

While gathering and studying big data has been a trend for some years now, many organizations have been ignoring an obvious target for analysis: themselves.

Businesses use big data to detect how customers (and competitors) are behaving, how economic trends are unfolding, and so on. But they generally don’t apply the same sort of analytical horsepower to their own performance and how they manage themselves, their leaders, their teams, or their strategies.

That omission needs to change. Our modest contribution to the cause has just debuted, in the form of Accelerating Performance: How Organizations Can Mobilize, Execute, and Transform with Agility, published by John Wiley & Sons and released last week in the United States.

Our goal was to help bring the hard stuff to the soft stuff—applying heavy-duty data techniques to understanding how people and organizations are really doing so that they can accelerate their performance. We believe that management needs more Excel and less PowerPoint and, above all, should rely more on data and less on the sort of occasional observation or anecdote that we refer to as “anecdata.”

The book stems from several years of effort by my coauthor Sharon Toye and myself, as well as by our colleagues at Heidrick & Struggles. The underlying research project, which is ongoing, sheds light on what works, and what doesn’t, when it comes to helping businesses accelerate performance, which we define as the ability to reduce time to value by building and changing momentum more quickly than competitors do.

The research draws on a survey of 20,000 global leaders, an investigation into the performance of more than 3,000 teams, and our firm’s collective experience consulting and placing top executives to identify what practices separated the best from the rest. We supplemented the work with an analysis of the FT 500, identified 23 companies that we labeled “superaccelerators,” and conducted interviews with many of those companies to further verify our conclusions.

Some of our research findings defy conventional wisdom. For example, it’s generally agreed that two of the most important considerations for a business are how to move into the right industry and the right geography. However, our work showed that companies actually have about twice as much opportunity to improve their performance by staying within their current industry and geography than they would if they switched. In other words, strategy still matters—but execution matters more.

Moreover, when it comes to setting strategy, we found that businesses spend too much time focusing on the issues they can control and should spend more time focusing on the unruly outside forces that, according to a landmark academic study, account for a whopping 45 percent of corporate performance. We identified 13 “drive factors” that, among other things, determine how well a company senses changes in its environment and how quickly it reacts.

At the organizational level, we identified the drag and drive factors that determine how well businesses do at mobilizing resources, executing on their plans, and transforming themselves through a variety of practices that boost agility. We then identified more than three dozen specific actions companies can take to improve performance in these areas—for instance, how to co-innovate with customers or how to use a higher purpose as fuel that excites employees and aligns them behind the company’s goals. We explored how to get employees to speak truth to power, how to act as one firm, how to learn from mistakes, how to either improve or atomize the corporate center, how to develop what we call digital dexterity—and much more.

These findings are crucial because the basic organizational structure for business hasn’t changed in a very long time, even though technology and other factors are altering the pace and nature of work. Those changes are putting stress on organizations that must be identified and managed.

When it came to the study of teams—the true performance engines of organizations—we found that high-performing teams delivered 22.8% more economic benefit than low-performing teams did. We went on to identify the factors that matter most for team performance—for example, how putting teams, especially top teams, in direct contact with customers improves performance.

A similar analysis at the level of individual leaders identified the execution rhythms demonstrated by effective leaders, as well as their core mind-sets—for example, how leaders manage energy turns out to be a crucial issue. We also learned that, while leaders are often inclined to try to resolve or dismiss doubts, embracing doubt can be a powerful catalyst for performance when managed properly.

Our journey ultimately led us to four overarching skills that organizations must develop. First is ripple intelligence, a powerful, comprehensive way of making sense of the change happening in the outside world. Second is resource fluidity, which includes the crucial ability to reallocate the best talent quickly to the most important opportunities—prioritizing the company’s prospects, not its politics. Third is the ability to dissolve paradoxes in decision making, so that leaders develop better, more value-creating solutions rather than using the typical binary decision-making approaches so prevalent today. Fourth is liquid leadership, which allows for working with a company’s existing hierarchy but increasingly maneuvering around and through it to assemble the right resources in mostly informal ways to tackle problems and opportunities. Think corporate lattice, not corporate ladder.

Because even the best ingredients need to be assembled in the right way, we lay out four main recipes for acceleration that draw on the various drag and drive factors and the four skills. We explain how to overcome the pitfalls that doom so many change management initiatives, and to give employees the space they need to become comfortable with the transformation going on in their organizations. We also explore how to exit people who refuse to adapt, to then bring in the right new talent, and to help the board play its crucial role as corporate overseer.

I believe the book’s aspiration to bring the hard stuff to the soft stuff is just the start. That’s how substantive research should work. Each new effort builds on what came before. Nonetheless, we’re already seeing important gains in the corporate performance of clients based on our data-driven approach, and I’m confident our research has tapped into something interesting and powerful. Ultimately, I believe in the old saying “luck is the residue of design,” and our hope is this book equips companies well enough on the design piece that they will be in the best position to capitalize on their opportunities for luck. And given the unprecedented level of uncertainty these days, a certain amount of good fortune will always be welcome.

In the meantime, we’ll continue to build on what’s here by constantly testing what’s working and what isn’t and quantifying how to proceed.

Let the science begin!