Line-of-SightSM helps companies execute better by measuring and managing five critical capabilities necessary for successful execution (or KSEs): strategic understanding, leadership, balanced metrics, activities & structure, and human capital; it also assesses market discipline - the ability to execute in a way that remains true to the strategic intent. These factors are aggregated to form an overall Organizational Health index measured on a scale from 0 to 100.
Line-of-Sight led a survey of more than 100 CEOs to measure how they evaluated the execution capabilities of their organization. This survey took place in Q1 2021 when most businesses were transitioning to a post-pandemic era.
Out of the five KSEs, Leadership is the one that showed the widest variation depending on companies’ growth rates. CEOs of companies growing moderately (+5% +50%) or very fast (higher than 50%) rated their executive team’s leadership as the second-lowest KSE after human capital (74 points and 62 points, respectively). Conversely, CEOs leading organizations that contracted or did not grow rated their leadership significantly higher (79 points and 77 points respectively) - in the case of declining companies, giving themselves the highest rating across all five KSEs.
It is naturally challenging to try and establish causality between a company's growth rate and how its executives rate their own leadership. But the humility displayed by CEOs of growing companies hints at what Paul Leinwand, the co-author of a recent HBR article, calls “the paradoxes of leadership in the post-pandemic era”.
He shows that leaders of companies that have successfully adapted to the pandemic “seek to be proficient across a wide set of characteristics rather than relying solely on their areas of strength”.
The characteristics that leaders the authors interviewed considered most important in this new era align well with the six paradoxes of leadership described in Blair Sheppard’s book, Ten Years to Midnight. For leaders, these “personas” embody the tension that comes from mastering different, and sometimes conflicting perspectives and skills:
The pandemic may increasingly be in the rearview mirror, but the world continues to be highly uncertain. Leaders must be visionaries able to spot opportunities for value creation, and able to direct their organizations to seize these opportunities.
But as the recent Line-of-Sight survey highlights, strategy is nothing without execution. So leaders must also appreciate the operational complexity and execution excellence required to make their new strategy a success.
The crises that unfolded in 2020 demonstrated the value of decisiveness - many leaders had to step up and make bold and high-stake decisions in a very uncertain environment.
Yet, leaders also had to step down from their position of authority and be more vulnerable and humble; employees were craving a more humane approach to management, and leaders themselves understood the importance of creating psychological safety in their organizations.
Technology is ubiquitous in business and the pandemic accelerated digitization. It is so embedded in the front office and the back office that leaders must be or become conversant in tech - if only to make decisions based on the recommendations of their CTO.
At the same time, technology’s role is to serve people and leaders must keep in mind the human dimension of tech decisions. It is especially important for roles that are impacted by AI and robotics and will undergo transformation with a significant impact on employee development.
Balancing core, traditional operations with innovation is as old a tension as the business itself. Leaders grapple with resource allocation, organizational considerations, and risk management as the post-pandemic era continues to be unpredictable. On one end, continued uncertainty calls for prudent management and stability in the products and services companies offer; yet, the speed at which demand has shifted in the pandemic creates many new areas of growth. More than ever, clarity of purpose and a well-defined strategy are key to inform decisions and determine what new opportunities to pursue. More than ever, leaders need a dual agenda that combines good stewardship of the core business and an embrace of experimentation, but this agenda must still be directed by a single, unifying vision.
Close collaboration is more essential than ever - with suppliers, with employees, with local, state, and federal stakeholders, and with a broad range of social stakeholders.
Leaders certainly need to take a transactional approach to many of these partnerships, rigorously assessing how value gets distributed, how advantages are gained, and how multiple parties are made to win together - while serving their own shareholders.
At the same time, the very complexity of business and social collaboration has raised the bar on integrity. Trust is at a premium, not least with consumers who have become very attentive to how their data is being used. Being a shrewd but trustworthy and reliable partner is now imperative for leaders to be good stewards of their organizations and their communities.
The pandemic reminded us of the importance of physical distance: disrupted supply chains attracted attention to the vulnerability of global manufacturing footprints; at the same time, consumers discovered or rediscovered the pleasure of running errands locally and supporting smaller, regional businesses. The physicality of operations is again at the forefront and requires active management - to acknowledge local tastes, to build resilience in global supply chains, and to balance scale with service.
Line-of-Sight survey data supports the emergence of these new paradoxes: by being clear-eyed about their own leadership performance, the CEOs of growing companies, i.e. those who have successfully adapted to the disrupted landscape of the pandemic, acknowledge that building strong leadership capabilities is a balancing act, a continuous learning process that strives for excellence but cannot, and should not, ever quite reach it.
How well is your business executing? To find out, please reach out to us and we will initiate an assessment of your execution capabilities.