Throwing Out the Book
High-performing leaders don’t always lead by the book. They may not be full of praise. They may not celebrate small wins and give positive feedback. But somehow, some way they manage to deliver growth year after year. They can even set the bar for the entire industry. This leadership philosophy is different than what many of us follow today. Since I enjoy studying these various models, I wanted to share it with you.
Stanislav Shekshnia, Veronika Zagieva, and Alexey Ulanovsky have studied them for ten years. And they write about their findings in Athletic CEOs: Leadership in Turbulent Times. I recently asked Stanislav to talk about their research.
The Athletic Leader Attributes
What is Athletic Leadership and what are Athletic Leaders’ unique attributes?
Athletic Leadership is a model, a construct, which describes effective leadership in the specific context, defined by rapid obsolescence, high turbulence, heavy government involvement, high-power distance leadership tradition, and a medium level of development of human capital.
Athletic is a metaphor which we used to emphasize a very important characteristic of the effective CEOs we have studied – mental toughness. Just like top athletes these leaders are super-ambitious, passionate, focused, cool-headed and merciless to the competitors, followers and themselves. This evokes images familiar to all of us: Usain Bolt, Wane Gretzky, Maria Sharapova and Serena Williams.
At the same time, business leadership is more complex than sports. Athletic CEOs combine toughness with mental adaptability. They are proactively curious; they constantly reinvigorate knowledge, and they change their mental models. This almost improbable combination makes them effective.
The agendas of athletic leaders – their ambitions and major themes – are complex and multidimensional, with many different overarching themes, time horizons and specific projects. However, there are two central leitmotifs in all this diversity: winning and transforming.
Athletic leaders strive to beat specific competitors – companies and leaders they recognize as such. They work hard to beat their own records, e.g. they want their companies to constantly outperform themselves. They would like to set world records. Their playing field is the world, and their benchmarks are the global leaders. And athletic CEOs want their companies to win championships as well as single matches; they make the long-term success of their organizations a very important element of their leadership agendas.
Leadership is always about transformation, and this priority sits high on the agendas of athletic leaders. Transformation, or positive change for its own sake, has a profound meaning for them. And, as with ‘winning,’ athletic leaders pursue different kinds of transformation at different levels. They change people who work for them, the companies they manage, the industries they compete in, the communities their businesses operate in and the countries in which they live and work.
Athletic leaders also use some distinct iterative behavior strategies for leading people and organizations which I call meta-practices. These practices produce superior financial performance (outputs of athletic leadership) and long-lasting transformational legacy (outcomes of athletic leadership).
What do these leaders do that is not necessarily “by the book”?
The model of athletic leadership describes what effective leadership actually looks like in the specific context. This model seems contradictory: it reflects both ‘good’ and ‘bad’ sides of leadership. Some specific elements of athletic leadership go against well-established and widely-accepted leadership models. Let me give you some examples.
Athletic leaders do not fit into the well-known ‘Level Five Leadership’ model depicted in Jim Collins’s bestselling book From Good to Great. They are not humble, but openly ambitious. They say ‘I’ much more often than ‘we.’ They do not follow ‘the Window and the Mirror’ pattern that Collins describes; rather, they habitually take the credit for success and may blame subordinates for underperformance. They usually decide on a course of action and only then think about the people who will carry it out (contravening the ‘First Who … Then What’ principle of ‘Level Five’ leaders). They do not shy away from the limelight, but constantly seek it. CEO Vitaly Saveliev appears in every issue of the Aeroflot inflight magazine; Herman Gref has given more than a hundred press interviews since becoming Sberbank CEO.
Athletic leaders do not always demonstrate another recognized attribute of effective leadership: emotional intelligence – at least not in the way described by Peter Salovey, John Mayer, David Caruso, or Daniel Goleman, who write about understanding and regulating personal emotions, understanding the emotions of other people, and interacting with them on the basis of that awareness. Athletic leaders are relaxed about managing their own emotions and give themselves the freedom to raise their voices or threaten followers. They criticize more often than they praise. Providing positive, constructive feedback is not their strongest competency. One of them said to us, ‘My deputies are mature, well-paid professionals – if they don’t understand what they do well, they should not be where they are. They don’t need feedback.’ Athletic leaders do not often reflect on what effect their actions and words have on other people and rarely take any steps to correct negative outcomes. They are so passionate about what they do that they assume others share the same passion, demonstrate the same level of commitment, and therefore do not require any kid-glove treatment. Like top athletes, athletic leaders are so concentrated on winning that they tend to forget about the people who help them to win.
Outcomes and Outputs
What do the “outcomes and outputs” of an athletic leader look like?
We refer to ‘leadership outputs’ when talking about business results, and we use the term ‘leadership outcomes’ to describe leaders’ impact on followers, organizations and communities.
The most visible output of athletic leadership is a stable, superior operational and financial performance. Their companies consistently outperform competition. Less visible, but even more remarkable output, is the creation of solid platforms for future growth and development. Athletic CEOs want their companies to win in the long run, and they put together people, assets, products, technologies and processes that will ensure that long-lasting success. Under Saveliev, Aeroflot created a portfolio of four brands catering to different market segments, made its fleet one of the youngest in the global industry, secured and protected profitable routes, built high brand awareness and achieved one of the best levels of customer service in Europe. With Dyukov at the helm, Gazprom Neft has mastered modern exploration and production technologies (including drilling and pumping crude oil in the Arctic), tripled its resource base, modernized its refineries and developed a cadre of competent engineers and managers.
Winning by creating superior outputs is the number one item on the athletic leader’s agenda. The second is transformation. Profound transformations of different types are the major outcomes of athletic leadership. Within three to five years the athletic CEOs we have studied transformed their organizations dramatically.
Employee transformation has been especially remarkable at Aeroflot, (in)famous until recently for its poor service, arrogant personnel, extreme conservatism and resistance to change. In less than three years, its flight attendants learned to smile, joke, make ‘small talk’ in at least two languages and deliver ‘slow service.’ Similarly, members of Aeroflot ground staff proactively help customers and solve their problems (rather than explaining that it is not the company’s fault) – and all this with a smile! Today Aeroflot has a reputation as one the most dynamic and innovative airlines.
Under Herman Gref’s leadership, Sberbank has transitioned from a sleepy baking behemoth into a dynamic technology group providing a whole range of services to hundreds of millions of customers. Gazprom Neft of Alexander Dykov taught much larger oil companies to organize cross-industry benchmarking, to use digital technology in exploration and make money by pumping oil in the Arctic.
As you look at various athletic CEOs do you see any commonalities in the cultures of the organizations they lead?
Of course, each organization is unique and has its own distinctive corporate culture, but as athletic CEOs share some practices and attributes, the companies they lead have a number of commonalities.
First of all, these companies are fit like world-class athletes. They have strong balance sheets, world-class assets and deliver sustainable performance.
These companies are united yet decentralized. They have a similar structure: a strong center headed by a strong leader and autonomous units with direct links to the boss. Vitaly Baranov, vice president of organizational development at Gazprom Neft, remembers, ‘At INSEAD, when we had a case study about Napoleon and the Corps d’Armée system he invented, I said to myself, “Gee, this is like us – visionary leader in the center, autonomous businessmen in the field, shared goals to beat the others in the industry, and intensive communication back and forth.”’
The combination of unity and autonomy makes these companies robust and flexible at the same time. In 2015–16, Aeroflot withstood two formidable blows: the halving of the ruble’s value against the dollar and a 10 per cent contraction of the domestic passenger market. Yet the company’s revenue went up by 19.4 per cent, and the number of passengers increased by 10 per cent. At the same time Aeroflot launched a low-cost airline, Pobeda, which became an overwhelming success – flying almost five million passengers in its third year of existence, achieving average aircraft turnaround of 25 minutes and reaching 93 per cent capacity utilization.
Athletic leaders have made their organizations open to the outside world. These companies actively form alliances, partnerships and joint ventures with Russian and international businesses, including competitors, customers and vendors, and financial, consulting and research institutions. They actively participate in national and global associations and constantly integrate the knowledge thus acquired into their operations. For example, Kaspersky Lab has operations in Russia, EEMEA (Eastern Europe, the Middle East and Africa), Western Europe, the Americas and the Asia-Pacific – with offices in 32 countries and derives more than 70 per cent of its revenues from international operations.
Athletic leaders have turned their companies into learning organizations. They have established learning, development and self-improvement as core corporate norms. As Nikolay Tsekhomsky, ex-CFO of Sberbank, put it, ‘If you don’t learn, you don’t belong here.’ They have made Peter Drucker’s concept of ‘protected budget for development’ (no matter how bad the market situation, keep investing in learning) a corporate policy and put millions and millions of dollars into it. To ensure returns on this investment, they have created modern platforms for organizational learning, such as corporate universities, virtual schools, company-wide mentoring, applied research centers and labs, and departments at universities and colleges.
Athletic companies have very demanding cultures that put a lot of pressure on employees to perform, to learn and to excel. These organizations are not for faint hearts.
They are centered around the leader and highly dependent on the latter. It makes them strong today, but makes leadership succession a very important and sensitive issue.
Is it also for non-athletes?
Our research shows that to be an effective athletic leader, one needs to combine mental toughness with mental adaptability. To practice athletic leadership daily is a challenging and highly demanding task. It may not suit everybody’s tastes or abilities. However, other leaders can also benefit from it. They may use some elements and instruments of athletic leadership to enhance their performance. Two meta-practices of athletic leaders are very relevant to the work of most of today’s business leaders.
Pragmatic exploration represents a systemic approach to dealing with the challenge of rapid obsolescence of knowledge in all its forms – from human skills and mental models to products and technologies. This challenge will only intensify with time, and every business leader will have to find his or her own solution to it. Pragmatic exploration offers a tried-and-tested blueprint. It allows a leader to learn on a continuous basis, to make followers learn, to create and to sustain a knowledge-based learning organization. As Jeff Immelt, CEO of GE, once told us in an interview, ‘You become a CEO not because of what you know but because of how fast you can learn, and that’s something that people don’t always understand. There is a projection of what the world will be like in 5, 10, 15 or 20 years, and can a person continue to meet that change as time goes on?’
The second practice helps to operate in an increasingly turbulent and uncertain environment.
Talk about why this type of leadership is particularly important during turbulent times and periods of uncertainty.
The word ‘turbulent’ comes from the Latin turba, which means confusion. Turbulence creates a lot of challenges for business leaders. It makes it difficult to execute such important leadership roles as planning, evaluating, and rewarding, and undermines traditional business tools like annual plans, budgets, and performance reviews. In fact, turbulence challenges the ability of executives to perform their core leadership function: to reduce uncertainty for their followers by painting an attractive and convincing picture of the future.
Athletic leaders deal with this challenge effectively and efficiently by consistently applying a meta-practice of Navigating towards a moving target. It allows them to reduce the level of uncertainty about the present and future for followers, to map the road ahead, to allocate resources and to motivate and energize employees. Specifically, they relentlessly promote their business vision to the organization, yet they are constantly re-thinking it and adapt as the context evolves. Their natural adaptability allows athletic leaders to avoid one of the many traps that CEOs typically fall into: becoming stuck with an outdated vision.
They ‘make clothes with room for growth,’ e.g. set the bar at the ‘world record level’ and let their followers figure out how to get there. The initial reaction may be shock, but soon the followers accept the target, start thinking about achieving it and then go do it. At the same time athletic leaders do not suffer from ‘sunk cost’ syndrome. They readily abandon programs and goals that cannot be achieved or that have lost their relevance.
Athletic leaders help their followers deal with the turbulence by offering them ready-made mental frameworks and practical solutions. Often, they borrow existing instruments such as ‘six sigma,’ ‘corporate culture and values,’ ‘lean production system,’ ‘big data,’ ‘agility,’ or ‘digital transformation,’ and then present them to the organization with passion, vigor and the conviction that waving this particular ‘magic wand’ will make all the problems vanish. In due course, a new magic wand comes along and replaces the old one, but the goal has been achieved. The followers have received reassurance about the leader’s – and their own – mastery over the turbulent environment. They have also learned a new tool and moved the organization forward.
For more information, see Athletic CEOs: Leadership in Turbulent Times.