Agile Leadership: How High-Performance CEOs Make Headways with Boldness

Have you ever considered escaping into the farthest east, seeking respite in the tiniest hole of the mount Himalayas? Such is usually the thought of most Chief Executive Officers hired to stir the wheels of companies when they are in their most lonely and clueless periods. Building a successful business is often heaped with too many frictions and uncertainties, yet CEOs are expected to navigate these bottlenecks and create category-king companies.

From circumventing the disruptive tendency of the invisible hands (demand and supply) to weathering the brute competition in their industries, CEOs also have to deal with several incidences of backstabbing from disgruntled and disloyal employees or colleagues or board members. All of these are not calling for the timid, apparently.

In the law 28 of his 48 laws of power, Robert Greene generalized the necessity of knowing how to enter actions with boldness. The American classic writer espoused his proposition with a somewhat radical thought from Niccolo Machiavelli, adapted from the latter’s book, the Prince, which superimposes impetuousness over cautiousness. According to Machiavelli, it is better to be impetuous than to be cautious because fortune is a woman that would rather be attracted to the impetuousness of the bold than the cautiousness of the cold and timid.

Observers of the law in the corporate ecosystem are often called agile leaders or ruthless pragmatists. Several reports reveal the ability to make quick and sound decisions as one of the strongest hallmarks of successful CEOs across industries and cultures. According to a 2019 McKinsey & Company’s report on the mindsets and practices of excellent CEOs, the CEO’s biggest move account for 45 percent of a company’s performance and 3 out of 5 newly appointed CEOs that live up to performance in their first 18 months share certain mindsets and practices that evokes agility.

McKinsey researchers, Carolyn Dewar, Martin Hirt and Scoff Keller, developed a model of CEOs excellence following extensive research into factors that constitute the mindsets and practices of successful CEOs. The research drew largely from Company’s proprietary database on CEO performance, containing 25 years worth of data on 7800 CEOs from 3500 public companies across 70 countries and 24 industries.

The model encompasses six core elements of an excellent CEO which include; setting corporate strategy; aligning the organisation; leading the top team; working with the board; being the face of the company to external stakeholders and managing personal resources like time and energy. These elements further decompose to 18 specific responsibilities that are exclusively characteristic of CEOs.

The first call to action for a CEO is to develop the corporate strategy, and this involves setting the company on a clear goal path and having a roadmap or grand plan to always refer to in the face of uncertainty. By this, one could think about the vision and mission statements, philosophies and objectives of the company. It is reported that most CEOs tend to focus on options with the firmest business case to reduce strategic uncertainties, however, this should not detract from their ability to make bold moves in strategic decisions, especially in cases of resource allocation, pragmatic mergers, acquisition, and divestitures, capital expenditure, productivity improvement and differentiation improvement.

According to the researchers, moving boldly means to shift at least 30 percent more than the industry median. This increases one’s chances of rising from the middle quintiles of economic profit to the top quintile. CEOs that make bold moves earlier in their tenure outperform those who move later and those who do so multiple times avoid common decline in performance. Furthermore, findings show that CEOs that are hired externally tend to make bold moves faster than those promoted to the position from within. This is likely because internally promoted CEOs are already accustomed to some set of structure and routines that may be impeding their tendencies to change.

Some leaders are often too tardy and hesitant in making strategic decisions even with the most basic and inevitable aspects of their businesses such as resource allocation. Report shows that one-third of companies reallocate a mere one percent of their capital from year to year. Companies that reallocate more than 50 percent of their capital expenditures among business units over ten years create 50 percent more values than companies that reallocate more slowly. Furthermore, it was found that the top 10 percent of high performing CEOs are 35 percent more likely to dramatically reallocate capital than average performers.

Another function of the CEO is Organisational alignment. This is the art of strategically positioning people to perform optimally towards achieving the overall goal. High performance CEOs think systematically about their people; which roles they play, what they can achieve and how the company should operate to improve people’s impact. However, it is instructive to note that strategic alignment extends from matching talents with values to making bold moves with pruning the organisation of irrelevances including helplessly redundant employees. Thus, the best CEOs are described as those that put equal rigor and discipline into achieving greatness on both strategy and talents.

Study shows that almost half of senior leaders say that their biggest regret is taking too long to move lesser performers out of important roles or out of the organization completely. Many CEOs also express worries about asking the same few overstretched individuals to take on extra assignments because they cannot trust the people who would otherwise perform them. Furthermore researchers agree that CEOs who tolerate poor performance and bad behaviours diminish their own influence.

‘’Agility is one of the most widely used and misunderstood management buzzwords’’ argue these researchers from the McKinsey & Company. Contrary to most people’s belief, agility is not just about quick decision and execution; it also involves accelerating at a deliberate, stable pace. These researchers suggest that companies that are both fast and stable are nearly three times more likely to rank in the top quartile of organizational health than companies that are fast but lack stable operating disciplines.

Thus, according to the researchers, excellent CEOs increase their companies agility by determining which features of their organisational design will be stable and unchanging and creating dynamic elements that adapt quickly to new challenges and opportunities, for example; temporary performance cells, flow-to-work staffing models, and minimum viable product iterations etc.