The Spirit of Leadership

The Spirit of Leadership

June 17, 2023

The January issue of CEO Monthly features an inspiring article by Thom Dennis on trends in good leadership that we can expect in 2023. Thomas is a renowned business coach, mentor and motivational speaker.

Dennis presents ten trends that, while focused on the US, are universal in nature. In this text, I will discuss the most relevant ones, enriching them with my own insights and comments. All of these trends are united by one central thesis: after the experience of the pandemic and numerous difficulties in the business world, in 2023, many executives want to return to building their company’s success and improving business performance by setting new priorities: focusing on shaping company culture, innovation and long-term, strategic planning.

1 Visionaries who inspire

Starting with the most important message, Thomas emphasizes that a leader must have a clear vision, understand why and where the company is going, and effectively communicate that vision to his or her employees. What’s more, the goal must be realistic, and employees should know what actions lead to its achievement. Only by uniting the team around a common goal and maintaining constant communication can we increase employee commitment in the long term and convey a sense of responsibility for the company’s success.

Is this revealing? PwC’s 2023 study of Polish and foreign family businesses confirms this trend. As many as 93% of companies say they have a clearly defined business goal. The problem arises, however, when it turns out that only 24% of companies regularly report on progress toward defined business goals. Most struggle to accurately define goals and measure them, or to communicate progress – and sometimes both are challenging. Such activities do not engage employees around the company’s goal, and employees often do not take ownership of the company’s results.

2 Confirm words with actions.

Leaders should regularly review the extent to which mission, purpose, values, and executive tasks are being met and evaluate methods of communicating with employees. A recent study of a sample of 700 U.S. companies shows an insufficient correlation between company goals and values and their understanding and identification by employees. The trend is clear – a well-defined, regularly measured and analyzed goal, effectively communicated, allows employees to be involved in the success of the company.

3 The challenge of the future – the organization of the future.

How to construct an appropriate model for the company’s operations that is flexible, beneficial to the employee and meets the employer’s aspirations? Is a hybrid model the solution? If so, how should it be balanced? Stationary work promotes team integration, exchange of ideas, constructive conflict, and mutual learning. Remote work and flexible working hours, on the other hand, give more comfort to the employee, contributing to his professional stability.

It seems that there is no universal recipe for solving this issue. The operating model should be tailored to the individual needs of each organization. During the pandemic, we created our own hybrid model at Centravis (a large Ukrainian/international metal holding company), which, in retrospect, was well appreciated by most employees and management. The model was based on fully trusting employees who used available resources appropriately. According to employees, teams were better organized and disciplined than before, and managers became mentors and coaches instead of acting as supervisors and controllers. Many saw improvements in their personal lives and family relationships. It was worthwhile to approach things this way!

4 Innovation

Digitization of technology and business processes is another strong trend for this year. Thomas stresses that a key task for leaders will be to seek out innovators with strong IT experience. He points to the need to prepare key personnel to lead the digitization process. Digital transformation is the key to improving process productivity, labor efficiency, optimizing repair and procurement costs, building added value for customers, etc. Companies that base their operations on data (data-driven) are well on their way to building competitive advantages.

Going back to the PwC survey of family businesses mentioned earlier – only 48% of them consider the development of digital competence as one of their priorities for the next two years. Why do more than half consider this competence unimportant? I understand the strong belief in one’s managerial competence, but I do not believe one can effectively manage in the future without digitizing business processes. Customers joined the campaign, and sales were 5 times higher than planned.
Anyway, Patagonia, a company that builds its brand on the ideas of corporate social responsibility, is a brilliant example. On September 14, 2022, Yvon Chouinard, the owner of Patagonia, publicly transferred all of his voting shares to the Patagonia Purpose Trust, and all of his non-voting shares to the Holdfast Collective, a non-profit organization “dedicated to fighting the environmental crisis and protecting nature.”
This decision aimed to protect the company from “pressure to create short-term profits at the expense of long-term vitality and responsibility,” while creating long-term funding for philanthropic environmental causes.

This form of ownership, while generating many headlines in the United States, is not new outside the country. “Equity foundations” have been successful for years in continental Europe, particularly in Denmark, where a quarter of the top 100 companies are owned by foundations, including the country’s three largest companies: Carlsberg, Maersk and Novo Nordisk. Analysis of these companies suggests that they can be successful as businesses, and such an agreement helps simplify some of the trade-offs that for-profit companies typically face when considering their social responsibility.
Chouinard’s decision is thus an example of an outstanding CSR effort, as it combined a long-term, sustainable approach to business with a strong commitment to the environment.

Besides: which outdoor company will now be chosen by customers strongly committed to environmental protection?
So maybe we will also see similar trends in Poland?
It’s worth listening to others, learning from them and “collecting” smart people.
Jaroslaw Andrzej Szczepek