As an industry, we haven’t always been very good at this. When you are as big and powerful as many companies in energy, mining and oil & gas, you may get the idea that you don’t have to listen. That’s a fatal mistake. Many studies, and present case-studies, show that a primary execution risk lies in the failure to properly manage those stakeholder relationships. When I advise companies that have run into trouble, I often find their value propositions to be ‘inward looking’; they focus on what they are proud of and their own priorities, rather than on how they can contribute to what others are proud of and what constitutes their priorities.
When I took over Trans Adriatic Pipeline in Greece, working with my leadership team and board, and then the government and local communities, to transform how we approached that whole value formulation was a critical success factor. It eventually converted years of opposition into unprecedented support from political leaders and local communities alike, and laid the foundation for collaboration that’s still on-going.
There is both art and science to this process, and many tools to help guide. For example, one such tool that I discovered early in my career was the Hofstede model, the 6-D Model of National Culture. It has been a great anchoring point when confronted with different cultures outside Europe, in Asia, South America and Africa. I also work extensively with external advisors, and use polling and focus groups to ensure we have the necessary insights and actionable intelligence required to build impactful strategy.
• • •
Boyden: Is polarisation driving the need to adapt?
Rikard: I think polarisation accelerates the realisation of the need to adapt. As Darwin said, adaptation is critical to survival. The challenge isn’t to understand that, intellectually speaking. Your research suggests that most leaders agree on the need to adapt and complement their organisation with new skills and experience. But are they taking action?
In the last five years the executive search industry has been at the forefront of driving thought-leadership on what the ‘leaders of the future’ will look like. In particular advancing the thinking how corporate diplomacy will play a much bigger role in organisations’ ability to managing these challenges. But I still think there is still a gap between that avant-garde thinking and reality. Most organisations revert to the old profile of CEO and CFO backgrounds when looking for NEDs. I think a competitive opportunity for the executive search industry will be to find those leaders that have the experience managing these new ESG, political and stakeholder dynamics, and can combine that with a higher capacity to translate what it all means in the business context.
Take ESG: everyone recognises ESG has changed how companies need to think about how they govern environmental and social impacts, but how do you adapt and translate that into the day-to-day business reality? Surveys show that three quarters of senior leaders are still unsure how to confront that challenge and whether they have the right strategies and resources in place. Many organisations have added new C-suite roles to fill that gap. That’s great, but I often pick up frustration that it has also led to friction and mismatched expectations when those stepping into those roles lack the commercial or operational experience that would allow them to relate to the heavy P&L burden resting on the shoulders of a CEO, or the governance challenges facing a board. It’s not easy to appreciate that weight unless you have experience, ideally by having sat in those chairs. That’s a potential failure point and an area where I think coaching, training and development can play an important role. Unless those occupying those new roles can articulate the value they bring to their peers on the board or in the C-suite, they will be relegated to the side-lines.
• • •
Boyden: In your experience, how is the relationship changing between the board and the executive?
