1: The year was 2019. Johan Thijs, CEO of Belgian-based bank-insurance group KBC, had appeared in the Top 10 of the Harvard Business Review’s Top 100 CEOs in the world list for three years straight.
“If ever there was an ‘if it’s not broke, don’t fix it’ scenario,” Carolyn Dewar, Scott Keller, and Vikram Malhotra write in CEO Excellence, Johan was it.
KBC consistently posted profits that were exemplary compared with those of its competitors. “The firm was always highly liquid and well capitalized,” the authors write.
So what did Johan do? He did what all great CEOs do: “We reassessed our strategy,” he says.
Johan led KBC to jump to a new “S-Curve” to continue driving change, the authors write.
The best CEOs “ramp up into a period of intensive activity and radical improvement through a set of big moves,” the authors observe, “followed by a period of restoration while still improving incrementally, followed by another ramp-up in big-move intensity, and so on.”
Johan “celebrated and retired its previous S-curve, known internally as the ‘More of the same, but differently’ strategy,” they write. “Then [he] ramped up its next S-curve, dubbed ‘Differently: the Next Level.’
“This new set of big moves emphasizes artificial intelligence, rapid decision-making, and product and process simplicity, all to become the most data-driven and solution-driven digital first bank-insurance company in the world.”
2: McKinsey consultants Carolyn, Scott, and Vik write: “We’re often called on to counsel CEOs who start strong by making a series of bold moves but a few years into their tenure experience waning motivation and increasingly static performance.”
These CEO start strong by making “big moves early.” But they neglect the critical second step: “…and often.”
“Every big move should have a start and a finish,” the authors note, “with the completion of each phase building confidence and creating capacity for further change.
“When the equivalent of a lunar landing is achieved, victory should be celebrated, and lessons should be learned, but then it’s time for the next bold move to take the company even further, faster.
“Doing so accounts for why,” they write, “the best CEOs achieve above-market performance on a sustained basis, avoiding the slumps that the less skilled experience as they go.”
3: Carolyn, Scott, and Vik liken this approach to regularly applying “Heart Paddles.”
“You have to reinvent yourself,” says Itaú Unibanco CEO Roberto Setúbal. “The world changes. You have to change.”
As a new CEO, Roberto transformed Itaú “from a regional to a nationwide bank by quickly acquiring and integrating four large and troubled state-owned banks,” the authors write.
“In his second act, he invested heavily to move the bank from being retail only to a leader in corporate and investment banking, while expanding into the affluent retail segment, and into three other Latin American countries.
“In his third act, he implemented an agile operating model, radically reduced overhead, increased efficiency, overhauled the company’s performance culture, and negotiated and executed a merger with Unibanco.
“In his final act, he aggressively drove growth in Brazil,” they note, “pushed further Latin American expansion, and prioritized investments to digitize the bank.”
Roberto’s series of moves is a powerful example of what it means to jump from one “S-Curve” to the next.
“No one likes change, so you need to create a rhythm of change,” says McKinsey & Company’s Dominic Barton, an expert in advising companies on transformational change:
“You have to ask the question: ‘Why should we exist ten years from now?’ he suggests. “It’s an existential issue to change enough, regularly enough. If you’re not doing this, you’re not going to be around.”
As the leader of McKinsey, Dominic not only advised his clients to act this way, he did it himself. He “effectively moved the firm from providing good advice to also becoming an implementation partner to its clients,” Carolyn, Scott, and Vik write.
“Among many ‘heart paddles’ applied, he retooled the firm’s fee structure based on the impact of advice given to its clients, expanded services beyond consulting to include helping clients implement change, and invested heavily in building advanced data and analytics capabilities.”
More tomorrow.
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Reflection: Am I doing enough to drive change and improvement consistently? Am I applying “heart paddles” regularly?
Action: Discuss with a colleague or my team.
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