1: It’s Saturday night. We are at a chamber music recital, listening intently as the musicians play one of Mozart’s string quartets. When they finish, we join other audience members clapping with genteel applause.
The following day, we attend an NFL football game. On a last-second play, the quarterback finds an open receiver who scores a touchdown, and our team wins the game. We leap to our feet, screaming and jumping up and down.
At both events, we are the same person with the same feelings, values, and needs.
“But our environment has [changed], and so has our mindset about how to best to express your appreciation and enjoyment,” Carolyn Dewar, Scott Keller, and Vikram Malhotra write in CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest.
The best CEOs are intentional about shaping the work environment. Carolyn, Scott, and Vik believe there are four primary drivers to make this happen:
- The stories that are told and the questions that are asked
- The formal mechanisms that govern how work gets done (structure, processes, systems, incentives).
- The role modeling associates observe (from the CEO, senior team, and others they consider influential).
- The extent to which people have confidence in their ability to behave in desired ways.
As leaders, we must “demand that culture change efforts address each of these four shapers of environment,” the authors suggest.
2: Yesterday, we looked at Aon CEO Greg Case‘s relentless focus on “Aon United,” which transformed the organization from a firm with a $6 billion market capitalization to one valued over $50 billion as of early 2020.
Greg skillfully used all four drivers to remake the Aon culture. First, he “continually reinforces the Aon United narrative,” the authors write “in quarterly earnings announcements, emphasizing it as one of the firm’s competitive advantages.
“He also drove home the message of excellence through teamwork by landing a sponsorship with the Manchester United football club.”
Next, Greg utilized the firm’s formal mechanisms by standardizing the client service model that had previously been left to each division.
“Operations were consolidated to gain synergies,” Carolyn, Scott, and Vik write. “Senior leaders’ compensation was tied to a single, firm-level P&L.
“What was once an umbrella for sixty sub-brands became a single global brand: Aon. Leaders are explicitly expected to spend a day a week helping colleagues outside of their own area to succeed.”
Also, Greg embraced his position as a role model. He “virtually never uses ‘I, me, or my’ but instead favors ‘we, us, and ours’ and is quick to give others credit when good things happen,” they note.
“You are either serving a client, or you are helping a colleague serve a client” is one of his key messages. He also prioritizes spending time with client service teams to ensure high-quality service.
Finally, to build leadership skills and confidence, Aon trained over five thousand people in multiday workshops on what it means to “Lead Aon United.” They then followed up by building an online repository of related materials and embedding skill-building into all of their management development programs.
3: Kan Trakulhoon, the former CEO of the Siam Cement Group in Thailand, leveraged the same four cultural drivers to create an “Open and Challenge” culture of innovation in the country’s largest and oldest cement and building materials company.
After becoming CEO in 2006, he visited 70 of the firm’s factories and shared his message of fostering a culture of innovation. He also told the company’s story to every new person who joined the firm as part of the firm’s orientation program.
“For formal mechanisms,” Carolyn, Scott, and Vik write, “he moved R&D centers next to the plants and had researchers working on teams with those in the factories.”
He also revised the firm’s incentive system “to value deep expertise and created career paths for specialists,” they note. ” He adjusted targets to emphasize the importance of higher value-added products and doubled the spend on R&D every year.”
Kan also talked openly about failures and setbacks he had experienced, in direct opposition to the Thai national culture of “keeping face,” i.e., not sharing errors in public.
His visits to the factories were very informal. He requested that all his associates call him Pi Kan. Note: Pi is a friendly, informal term for older brother rather than sir or president.
“To increase confidence and skills,” the authors write, “he worked with INSEAD business school to create a leadership training program bringing leaders together across tenures for five days a month of classwork for five months to learn cutting-edge approaches to fostering innovation.”
Kan also encouraged leaders to gain global experience to introduce them to novel ideas and different perspectives.
Kan’s drive to create an “Open and Challenge” culture of innovation resulted in doubling the company’s market cap from $8 billion to $16 billion and total associates from twenty-four thousand to more than fifty-four thousand employees.
More tomorrow!
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Reflection: How can I utilize the authors’ four drivers to reshape my organization’s culture?
Action: Discuss with my team.
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