Welcome to the WO Report 2015
We spoke to 43 global CEOs and surveyed over 400 employees to understand how leadership practice is changing. Here we explore how ambitious leaders are striving to do the Impossible and Now.
This report has been designed to be the start of a conversation. We encourage you to add commentary to our argument wherever you see a '+', and to respond to polls wherever you see a 'Q'.
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Impossible
and now

how leaders are creating the uncorporation

Employees today are uncorporate individualists. For a CEO, this makes life almost impossible. How do you make an uncorporate culture, yet still meet corporate targets? How do you liberate people, without unleashing chaos? How do you give people a purpose, without imposing an ideology? How do you lead, when everyone’s their own leader? And how do you do it all fast? In this report, we’ll show how leaders are beginning to create the uncorporation.

For CEOs, what’s changing?

At Wolff Olins, we’ve always been lucky to count the world’s most ambitious leaders as clients.

But leadership practice doesn’t stand still – it’s always evolving into something new. We were interested to know precisely what was changing, so we interviewed 43 CEOs to get their thoughts on where things are headed.

We set out to get a good balance of older and younger companies, as well as of the Americas, Europe, the Middle East, India and Africa. We also talked to 10 leadership experts, drawn mainly from America and the UK.

And we surveyed over 400 people in their 20s who are the next generation of employees.

Three impossible things

The vast majority – 86% – of CEOs report big changes in their practice.

And the shifts they’re making aren’t simple or easy. Each creates a paradox, a contradiction, almost an impossibility. We were able to broadly characterize these changes as:

Culture, fast

To create sustainable performance, there’s a marked swing from concentrating on outputs (driving people hard on sales figures, for instance) to inputs (creating a strong, lasting, ethical culture). Overall, 63% of our CEOs talk about a focus on inputs, with this figure consistent across geographies, as well as mature and young companies. Yet building a culture takes time: how can CEOs do this while still meeting short-term corporate targets?

Let it go, almost

In turbulent times, consensus is just too slow. Instead, many CEOs prefer to experiment on many fronts with many small teams – 86% of our CEOs are actively doing this. The figures are highest, unsurprisingly, in America (92%) and in newer companies (95%). Yet this kind of distributed leadership can lead to disintegration and even disaster: how can CEOs liberate, yet also keep their organisation in one piece?

Clear and fuzzy

And in the age of the tech-powered individualist, leaders are motivating people through a shared social purpose – 81% of our CEOs talked about this. Yet individual employees increasingly have their own purposes, and resist corporate conformity. Leaders are starting to find ways to mould their companies around individual employees’ purposes: 42% of our CEOs cited this emerging trend, with Europe (62%) in the lead. But how do you give people purpose without imposing an ideology?

New thinking needed

Some of this isn’t new. But there’s more going on than just the usual cycles in management fashion. We believe technology is changing culture everywhere in the world, leading to the emergence of a new model of leadership.

Employees are now more confident, more mobile, more demanding, more idealistic in some cases, and less willing to be company people. Employees, more than ever, are individualists.

Leaders, in response, are learning to be less the visionary, less the sage, less the objective-setter, and more the shaper, the connector, the questioner. And yet at times, they also need to intervene, to insist, to control. It’s a fluid role, its shape not yet clear.

What is clear, as leaders forge their own new models, is that the old ways no longer work. CEOs can’t fall back on best practice. They have to be original. Leadership, more than ever, needs creativity. And achieving the impossible needs the most radical kind of creativity.

Impossible and now

We believe that CEOs need to use radical creativity, not just to recognise these impossibilities, but to use the power of paradox to fuel their business. We’re currently exploring this with clients in three ways.

  • — fast culture: using the disciplines of design to build – in weeks rather than months – a loose, creative, organic culture, with just enough tight, hard-edged, mechanistic systems, to rapidly accelerate performance.
  • — fast tools: equipping people throughout the organisation to think, imagine, experiment, prototype independently, but also to learn and share collectively – fringe experimentation that also enriches the whole organisation.
  • — fast platform: using storytelling to give people a sense of corporate purpose, but also to free them to pursue their own purposes, to be their own leaders – and take the organisation further than the CEO ever imagined.
1880

onwards

premise

command and control

belief

workers are lazy

so... strict structures are imposed for them to be productive

mode

set strategy

supervise and measure

increase productivity

shape

hierarchy

spirit

mechanism

1960

onwards

premise

motivation and delegation

belief

workers are willing

so... they can be motivated by a vision and rewarded with a career

mode

paint vision

manage by objectives

build consensus

shape

network

spirit

rational brain

2000

onwards

premise

focus and liberation

belief

workers are individualists

so... expect them to be their own leaders

mode

suggest purpose

design culture

provoke experiment

shape

ecosystem

spirit

organism

Chapter 1:

Culture, fast

It’s easy to characterise CEOs as ringmasters – cracking the whip and taking to task those whose performances fall short. Of course, leaders have always been under pressure to generate outstanding performance. And that pressure to deliver results has only increased in the midst of economic instability and persistent disruption. But CEOs see a decisive shift in their role: less ringmaster and more Chief Designer of Company Culture.

CEOs are rightly reluctant to pursue performance at any price, and unwilling to prioritise the short term over the long term. Instead, they want to build something durable: “I’ve learned to focus much less on keeping people on their toes to create short-term performance improvements, because it leaves a fragile organisation behind” (Jeff Dodds, Tele2).

To create durable organisations, CEOs are turning their attention to inputs over outputs: “Focusing on the inputs, primarily defined by the culture, and not the outputs, as defined by sales and profitability, is a great principle” (Rabea Atata, Bayt). Even where one may expect numbers to rule, culture is increasingly king: “To create the space for your team to fail without allowing sloppiness is really hard – it takes a really deep-thinking leader” (François Muscovici, White Water Group). All of this has a pay-off of course. These are the cultures in which employees – who today have more choice than ever before – choose to perform:

Why are we doing this? Because we need people to choose to go further.”

John Hughes, PwC

CEOs often use the metaphor of a machine when describing the organisation and their relationship with it: “My role is not to be in the machine but outside of it and making sure it runs well”(Aaron Shapiro, Huge).

As leaders increasingly take their cues from engineer-led digital enterprises we will see more of this. Many CEOs describe themselves as designers of that machine. Particularly those in Africa, like Tunde Kehude of Apost: “Our job at the centre is to ensure everything that is not local is well designed – IT, interfaces, communication”.

If design thinking is about moving from an existing situation to a better one, then the CEO is designer-in-chief.”

Marty Neumeier, Liquid Agency

These designers-in-chief are designing systems and processes. Tim Armstrong of AOL says: “Many people underestimate the need for, and power of, process.” But CEOs don’t think of their business as a cold mechanism. Rather, system design becomes important – and the system must have warmth.

Building a culture starts with hiring the right people and CEOs, particularly in younger companies, are devoting more of their time to this. For Erika Brodnock of Karisma Kidz, “Getting the right people with the wrong skills is more important than the wrong people with the right skills.” And CEOs are powerfully aware of the emotional dimension: “The one way I’ve changed in the last five years is the difference between rational and emotional – emotional connectivity is incredibly important” (Antony Jenkins, Barclays). CEOs even hardwire that emotional piece into everyday business processes, “We make franchisees take an EQ test before we take them on” (Mohamad Bitar, Just Falafel).

About 70% of my job is about the people – it’s exhausting and rewarding.”

Jonathan Klein, Getty Images

Being designer-in-chief of the company culture is hard – even interactions with people have been redesigned. No longer the traditional boss or visionary, most CEOs now see themselves as teachers: “The key is not to tell people what to do but to teach them how to aspire” (Sanjay Reddy, GVK). And as great teachers know, asking people the right questions trumps giving them the right answers:

I’ve started asking searching questions, rather than telling people what to do.”

Nick Serota, Tate

Creating an uncorporate culture clearly takes time and patience. For CEOs it’s hard work – but worth it. They’re finding that delicate balance between experimentation and stability, meeting targets and designing their machine. No longer ringmasters, these are leaders looking to people for creative responses to their searching questions.

Chapter 2:

Let it go, almost

Many of the leaders we spoke to for this report take a position of being purposely unsure – they look to leave with the answers, not arrive with them. While they, as leaders, set and drive the ambition of the company, its day-to-day success and value is in everyone’s hands. As Andrew Glincher (Nixon Peabody) sums up neatly: “You don’t need a title to be a leader.” At its best this kind of distributed leadership is “fast”, “two-way” and “powerful”. At its worst it’s “messy”, “complex”, and – at times – downright “scary”. So how do today’s CEOs make ambiguity a position of strength, both for themselves and the organisations they lead?

Mindset seems to sit at the heart of this new approach. If the company is to be ‘uncorporate’, so must its leaders. Lunch is no longer for wimps, but for confident leaders wanting to share a sandwich with colleagues and get to the heart of things. Even at Coca-Cola things are changing: “I’m more eager now to hear from the people who are closest to the action” (Muhtar Kent, Coca-Cola). Although unfamiliar territory, some CEO’s are finding it empowering.

I can now enter a meeting without an idea of what the answer could be – in fact, there isn’t always one right answer.”

Winnie Byanyima, Oxfam

In fact, operating in a fast-moving world means that the ‘right’ answer can shift quickly and unexpectedly. Distributed leadership allows new answers to emerge and be actioned without the CEO there to call it. Increasingly, leaders are letting teams around the organisation use their own specialised or local knowledge to try things out. This came across most clearly from CEOs in America: “We have to get away from ‘group grope’, where everyone had to be involved in everything, to a series of smaller projects that go faster with lean teams” (Kathy Murphy, Fidelity). All of which adds up to a recipe for growth, both culturally and operationally.

If every decision has to go to the CEO then clearly we are not going to grow as fast.”

Iyad Malas, Majid Al Futtaim

Our survey results demonstrate how an acceptance of ambiguity at leadership level ultimately empowers people at all levels. Nearly half of respondents (47%) strongly agreed that they felt encouraged to suggest ideas and make contributions to how they work. And over a third (36%) strongly agreed that they are given responsibility to do things their own way. With responses coming from across a wide number of industries, there’s no doubt that the era of command and control is largely behind us.

The biggest impact on the working processes of companies around the world has been Agile with a big ‘A’. The past few years have seen Agile move beyond its developer roots in tech businesses, and get adopted and re-appropriated by a wider audience. Today, it is integral to being ambiguous yet functional. For Brian Kelly, of coffee company Keurig Green Mountain, the Agile approach feels obvious.

I believe that getting into the market [with new products] and exploring is the only way to learn: it should be small teams and fast sprints with a tolerance for messy processes.”

Brian Kelly, Keurig Green Mountain

But it’s precisely those “messy processes” that many business leaders and employees find difficult. Nurturing experimentation while balancing regulatory demands can lead to chaos, fear and panic. In this context the leaders we spoke to advocated re-taking control. Simon Nelson from FutureLearn opts to “consciously and deliberately flip between giving autonomy and rolling my sleeves up”. While G M Rao (GMR Group) takes a more structured approach, ”There definitely should be a degree of distributed leadership: however, it should be governed – in our case, through advisory councils.”

Accepting that “the ‘junior’ knows a hundred times as much as me” (Michael Day, Historic Royal Palaces), opens uncorporate leaders up to innovation and expertise from all sides. And it goes both ways: CEOs who trust others to do their jobs foster trust in others that they can do theirs. By learning to let go, CEOs liberate both their employees and themselves for the better of the organisation.

Chapter 3:

Clear and fuzzy

Whether an inevitable consequence of global late capitalism, the booming self-help industry, or because so much of our life is mediated alone – through digital devices – our culture is increasingly individualist. This means people are becoming more assertive, and less obedient – cultivating their own values and desires, and expecting organisations to follow them rather than the other way round. This is very hard for leaders: how do you build a strong sense of purpose, and a clear and thriving company culture while catering to the different agendas of individuals?

The company is no longer the centre of its universe – and nothing in business school prepares leaders for this.”

Philip Mirvis, Organisational Psychologist

CEOs see younger workers as different to previous generations and much less emotionally invested in their employers. This is not just a western trend. They are more confident in their worth as an employee, and they’re more impatient than previous generations. Currently, people still want to look up to someone who they can follow. But the younger generation wants more freedom and flexibility: “The next generation will completely change the face of leadership” says Sanjay Reddy of GVK. As a result, old practices of motivation alone (promises of a solid career ladder, or an idealist corporate belief structure) do not have the desired effect on their own.

Individuals aren’t going to tie themselves to the institution for thirty years.”

Nick Serota, Tate

But leaders still see huge value in having a clear and socially-minded sense of purpose, both for ethical and pragmatic reasons. As Rabea Ataya of Bayt says: “If you don’t do good, your success will always be limited.” So there is a challenge for leaders to find a balance: how do you apply a mechanism you find useful for the organisation, without alienating cynical or indifferent employees?

And there are two ways they are tackling this: being more humble about the company’s position in the world, and inverting the company-individual relationship.

What we do is not very important to people – it’s what we enable them to do. So for us purpose injects both focus and humility.”

Antony Jenkins, Barclays

In making more modest assessments of their company’s role in society, CEOs ground the work they do in more realistic and self-effacing terms. There is an acknowledgement that chest-beating, cult-like corporate incantations are not helpful either. Zopa’s Giles Andrews confirms “Purpose can look false – in fact, if it’s given too much priority it will be false.” The company as church and centre of the universe is an increasingly outdated mode of operating. This means leaders have to be ok with a looser interpretation of what the company is about.

This is a big shift, but a crucial one for leaders looking to motivate a generation that is hard to impress. A more open-ended sense of purpose only really works if you practise what you preach so CEOs are increasingly letting individuals shape what the company means. The old norm – that company stands for ‘x’ and employee subscribes to ‘x’, therefore employee works for the company – is unappealing. But by inverting the norm, a vision for the company can work for the individuals rather than the other way around – 89% of people we surveyed said it was important that the company shares their values and point-of-view on the world. This allows work, culture and behaviours to spread quickly: people can concentrate on what interests them, rather than retrofitting their work into a stolid corporate strategy.

So leaders need to trust and accept that people will work for them only on their own terms. And often that actually enhances the environment, as Simon Nelson of FutureLearn has discovered: “I’m wary of setting cultures [for younger workers] – they’re doing it for themselves.” With a more open sense of purpose – rather than grandiose, self-inflating mantras – individuals can take what matters to them and run with it.

In Nigeria you can’t tell people what to do. I think like a shepherd and lead from behind.”

Jeremy Doutte, Jumia

This means giving up some control and knowing that the company, moulded around what the individual wants to achieve, will be all the better for those people taking the lead.

Creative checklist

01

01 Take your place
See yourself and your organisation as a citizen of the universe, not the centre of it.

02

02 Let it go
You don't have to have all the answers, nor should you – let expert practitioners lead the work.

03

03 Culture eats capabilities
Hire the right people with the wrong skills, not the wrong people with the right skills.

04

04 Cut the corporate
It doesn’t matter if people can’t recite your values, it matters if they can’t work in their spirit.

05

05 Go long
The future of your business already exists at its edge. Keep it – and the experts that live there – close.
With thanks to
Aaron Shapiro
Huge
Ajay Srinivasan
Aditya Birla Group
Andrew Glincher
Nixon Peabody
Antony Jenkins
Barclays
Arunachalam Vellayan
Murugappa Group
Bhaskar Bhatt
Titan
Brian Kelley
Keurig Green Mountain
Chris Saul
Slaughter and May
D. Shiv Kumar
PepsiCo
David Klein
CommonBond
Dheeraj Hinduja
Hinduja Group
Erika Brodnock
Karisma Kidz
Farah Ramzan Golant
ALL3MEDIA
François Moscovici
White Water Group
G V Prasad
Dr Reddy's
G V Sanjay Reddy
GVK Group
Giles Andrews
Zopa
Grandhi Mallikarjuna Rao
GMR Group
Iyad Malas
Majid Al Futtaim Holding LLC
James Cornford
University of East Anglia
Jeff Dodds
Tele2
Jeff Lawson
Twilio
Jeremy Doutte
Jumia
John Elkington
Volans
John Hughes
PwC
Jonathan Klein
Getty Images
Kalpana Morparia
JP Morgan Chase
Kathleen Murphy
Fidelity Investments
Kathryn Parsons
Decoded
Kelly Mooney
Resource / Ammirati
Kirsty Fuller & Maggie Collier
Flamingo
Krishna Bodanapu
Cyient
Marc Kushner
Architizer
Marty Neumeier
Liquid Agency
Meher Pudumjee
Thermax
Michael Day
Historic Royal Palaces
Mike Arauz
Undercurrent
Mike Cornwell
Insitute of Direct Marketing
Mohamad Bitar
Just Falafel
Muhtar Kent
The Coca-Cola Company
Dr. Mukund Rajan
Tata Sons
Natalie Campbell
A Very Good Company
Nick Serota
Tate
Nisaba Godrej
Godrej Group
Noreena Hertz
University College London
Phil Mirvis
Boston College Leadership for Change Program
Rabea Ataya
BAYT.COM
Ranjit Yadav
Tata Motors
Sal Lahoud
Pave
Simon Nelson
FutureLearn
Stephen Page
Faber & Faber
Tim Armstrong
AOL
Tunde Kehude
A-Post
Winnie Byanyima
Oxfam
Impossible and Now