The Adaptive CEO

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We know that leadership today means adapting to change. If there ever was a calm period to be CEO, this certainly isn’t it. What do we know about leaders who are superstars at adapting to change?

I still think Ron Heifetz’ 1994 book on leadership, “Leadership Without Easy Answers” is the best book on the subject. That could be because I’m a believer in change happening and to the extent possible, being prepared for what’s coming. Heifetz describes what he calls “adaptive leadership” as requiring both invention to meet new challenges and a realignment of one’s values to support new ways of working. The alternative, which is to use the authority one has as a leader to clamp down on those trying to innovate in the face of potential threats, never made much sense to me. And yet, it is by far the road most often taken. When facing uncertainty about the future, as CEO you have a choice. Will you be a CEO who leads the charge to transform the enterprise from strategy to operations with great disruption even if it may not be necessary, or will you fight to preserve the best of what is, even if it means reconsolidation into a smaller but more sustainable form? Either can make sense. As Heifetz signals in his title, there are no easy answers.

But suppose all the talk about artificial intelligence, globalization, tariffs, and China gaining access to high-speed chips and controlling the supply of rare-earth minerals has been keeping you up at night. Suppose you decide that you aren’t comfortable sitting tight waiting to see what happens. Suppose you are inclined to take some action to prepare for the future, however uncertain the future might be. What are you supposed to do?

Heifetz instructs leaders to identify the adaptive challenge, regulate the distress, direct disciplined attention to the issues and give the work back to people. To do these things, he says, leaders must, “get on the balcony” where they can see the action on the dance floor without being caught up in it themselves. As CEO, you may think you are already on the balcony, but it may be that you are just as caught up in the dance as everyone else. A clue as to whether this might be the case is to check how much time you are spending away from the office. If you rarely get out, chances are you’re surrounded by dance partners constantly pulling you back onto the floor. Getting away is critical in order to gain perspective. But it’s not just going fishing, although that can help; it’s spending time with people who can help you to think and see things differently. Without that capacity, you can’t tackle the first of Heifetz’ steps: identify the adaptive challenge. If you are neck deep in solving today’s problems, you aren’t seeing tomorrow’s, and you aren’t likely to be entertaining systemic solutions that would eliminate the problems entirely. Doing that requires innovation and supporting people who value new ways of working. You have to ask yourself why you are facing the same challenges that the organization has been facing for years or even decades. Those problems are woven into the DNA of the organization through its strategy, its people, its facilities, its customers, its know-how, its culture and more. If you are prepared to adapt, a lot of that will need to go, as precious as it once was. If you can locate the source of those repetitive challenges, you are on to identifying the adaptive challenge. It could be that you are in a red ocean of competition. It could be that your products are no longer leading edge. It could be that customer tastes have evolved. It could be that people are depressed and unmotivated because nothing has happened to inspire them for what seems like forever. Usually, the adaptive challenge is the single thing that everyone agrees can’t be fixed but has to be. That’s why you have to get out; everyone inside will tell you change is impossible.

Leaning into taking action will cause distress. You will feel the pressure first. You will discover what Heifetz says is true: if you can’t stand the distress that accompanies real change, you’re finished. The same goes for your people. You need to urge them forward but not scare them into inaction or jumping ship. You’ve got to hold them by the hand, make room for people to screw up, give people time but demand progress and be the empathetic, iron-fisted leader who maintains complete confidence when everyone else is questioning your sanity.

One of our board chairs at the Center for Creative Leadership was that kind of leader. Ingar Skaug inherited Wilhelmsen Shipping, a company on its last legs that suffered a terrible tragedy. It’s fifty top leaders were killed in a plane crash on their way to christen a new ship. Ingar waited a year for people to mourn before trying to pick up the pieces. Then, he told people that he was going to transform the company into an international powerhouse, something they found hard to imagine at the time. But he did it, going from 9 ships to 900 and leaving it one of the largest and most profitable shipping companies of its kind. While Ingar was a fabulous businessman, it was his ability to regulate distress that made him a success.

If you can keep distress under control, it’s a matter of getting people to start working on the right things. Usually, people are too distracted by their current goals and routines to devote their full attention to doing things differently. Once, in a project to redesign a large consumer products organization, I was working with a team of senior leaders from across the enterprise. At the end of our first kickoff meeting, people pulled out their calendars to schedule the next meeting. The first available date for everyone was more than three months out. I knew the project was of critical importance and that the CEO wanted it done quickly. I also understood why the people he hand-selected to be involved needed to participate. No excuses or substitutes. So, I went to the CEO and he cleared people’s calendars for them. We finished the project three months later with the team working full-time. Imagine how long it would have taken if we had made allowances for people to fit the work in around their usual jobs. Is adaptive transformation a hobby or a job?

Finally, and this is a big one, Heifetz challenges you to give the work back to people. Partly, it’s because you simply can’t do it all yourself. More importantly, it’s to avoid people sitting back while they wait for you to solve all the problems, as if they were judging America’s Got Talent instead of sharing responsibility for the quality of the performance.

People thrive when they take responsibility for their own well-being. At first, they may resist doing so because they are used to being spoon-fed. They may think asking them to step in to be a part of formulating solutions and implementing new ways of working isn’t fair because that’s what you get paid to do. But discovering that when you learn to feed yourself you get to decide what to eat is an amazing revelation. It changes people’s lives. Human creativity is the most underutilized resource in many organizations and its cost is free.