by Tim Ryan
Summary. While we don’t know what the rest of the year will bring, it’s reasonable to assume that the headwinds we’re experiencing will continue. This is an environment that will demand — and reward — high-performing leadership teams. Based on his conversations with more than 100 clients across industries, PWC U.S. Chair and Senior Partner Tim Ryan has identified seven factors that set these teams apart: 1) They create a “company-first” culture; 2) They think and act across the enterprise; 3) They maintain a relentless focus on reinventing the business; 4) They free up the right people for the hard stuff; 5) They’re inclusive of different backgrounds and skills; 6) They encourage healthy debate, but avoid undermining fellow leaders; and 7) They strive to be humble and objective.
Whether it’s inflation, rising interest rates, supply-chain disruptions, geopolitical tensions — there is a lot happening in the global economy. And on top of those forces, consumer expectations are increasing, competition is intense and investors are raising the bar. There’s never been a more challenging time to be a CEO or member of senior management. Given the complexities, it is no surprise that some companies are performing exceptionally well, a lot are doing just ok and there are others struggling to keep up. Based on my latest discussions with more than 100 clients across industries, what I’ve seen is that the outperforming companies have leadership teams with the following seven factors in common:
They create a “company-first” culture. Senior leadership teams are typically made up of individuals who are highly skilled in their domain — but what’s different at high-performing companies is these leaders embrace a company-first culture. This means doing what’s right for the business and your people, instead of driving individual agendas or objectives. One CEO of a high-performing industrial company shared that being part of his leadership team is like being on a sports team: “The team comes first, not the star individual.”
They think and act across the enterprise. High-performing teams recognize that their role extends beyond the individual unit they manage, and they operate across silos. One CEO of a leading digital bank shared with me that his team’s enterprise-focused mindset drove a reimagined customer experience resulting in industry-leading efficiency ratios. They achieved this by sharing data across the enterprise and committing to one set of data governance rules.
They maintain a relentless focus on reinventing the business. Too often CEOs and senior leadership focus the majority of their time on running the business, while the portfolio and business-model reinvention takes a back seat. Strong companies are putting the bold reimagining of their business at the top of the agenda. Bold actions include running the business with unparalleled discipline, managing costs, simplifying wherever you can, and pulling on every lever to win. Taking bold action also involves reshaping portfolios while reinventing the back, middle and front offices—with a sense of urgency. One CEO of a pharmaceutical company, who was looking to innovate and disrupt their industry, implemented a bold new business model powered by a cutting-edge commerce and marketplace platform in a matter of months. This resulted in a direct, better way to reach customers, increased margins, and greater trust and transparency across their entire value chain.
They free up the right people for the hard stuff. Reinventing your business is a full-time job and needs dedicated minds who aren’t also focused on managing other day jobs. High-performing leadership teams find the time to focus on the hard stuff and delegate the day-to-day operations to others.
A CEO of a major energy company put one of his top business leaders in charge of their enterprise-wide business model transformation to both enable its success and send a clear message to all stakeholders of the importance of the transformation. While it’s difficult to have a leader step away from the work they are doing to take on a transformation effort, the dedicated focus makes all the difference. The energy company’s transformation leader has since positioned the company for significant value accretion and cost optimization through standardization and simplification, all while driving leadership commitment, organizational readiness and business outcome sustainability.
They’re inclusive of different backgrounds and skills. High-quality teams are inclusive in all ways. This means inclusive of genders and ethnicities, but also of diverse views, backgrounds, and skill sets. It’s critical to have a breadth of leaders in your C-suite that bring forth differentiated expertise and perspectives to enable an organization to innovate more robustly and accelerate transformations. It’s why top leadership teams have a chief technology officer, chief people officer and chief communications officer at the table. In one instance, a CEO of a major technology company shared with me that too many companies lack a diversity of skills in the C-suite, particularly when it comes to technology. As a result, senior management might not be able to identify what the “art of the possible” is when transforming their business and how different tools, like emerging technologies, could help. In these cases, leadership teams focus on building a “faster horse and buggy”’ rather than reimagining what’s next.
They encourage healthy debate but avoid undermining fellow leaders. Good teams have healthy debates, transparently talk about pros and cons and explore alternatives together. Before transformation efforts begin, they spend a lot of time agreeing on the desired outcomes and business requirements of the effort. Getting leadership teams to engage in open, honest discussions is critical. One CEO of a major industrial company shared with me that she never imagined the amount of time she needed to spend helping her team “get along.” What I took from her comment is that leadership is about coaching the team to share their various points of view, challenge each other with healthy debate, and come together once a decision is made to row in the same direction.
They strive to be humble and objective. Humility is critical at the CEO and senior levels of any company because it filters down to every level of the organization. It helps fight complacency. Most companies have a lot to be proud of, but if the focus is always on the success of the past instead of the opportunity for the future, other companies will quickly pass you by.
Similarly, some leaders struggle with objectively assessing their current performance and where their company and results truly stand. Leading companies are constantly challenging themselves and use objectivity to both drive performance, keep the competition in the rearview mirror and shareholder activists at bay.
I recently spoke with a CEO from a consumer technology company about the importance of having the right people on your company’s board and the critical role the board plays in bringing an outside-in perspective. Board members are in the advantageous position to help the C-suite look around corners, prepare for potential challenges, and discover blind spots.
While we don’t know what the rest of the year will bring, it’s reasonable to assume that the headwinds we’re experiencing will continue. This is an environment that will demand — and reward — high-performing leadership teams. They’ll drive outsized growth, increase shareholder value, and likely have a little more fun along the way — working together and sharing the successes of a team that is creating more value for their customers, employees, and communities.
