How to lead a business through non-business challenges

I threw a prayer Sundar Pichai’s way this week over the diversity memo imbroglio at Google.

Google's CEO is an engineer, product chief and business leader by training and experience. Chances are that the skills he needs to overcome this dilemma under the international spotlight are not the same ones that he exercised regularly in his rise to the top.

Pichai, like the now deposed former Uber CEO, is at that point many leaders of complex organizations reach – where their business smarts are less important than their general leadership wisdom in solving their company’s problems.

Even in smaller enterprises, when the business goes to the next level, the executives who are in charge need to build on their already proven business skills by adding new approaches, skills, behaviors, and mindsets. To be effective at the next level they need to rely less on their business acumen or expertise and rely more on their ability to connect with people and inspire belief in their sheer ability to lead. 

Leaders dealing with a more sophisticated set of business challenges need wisdom, not business smarts; good judgement, not cutting-edge analysis; character, not competencies. 

While the issue at Google and many issues like this strike businesses left and right, they are not traditional “business” issues – and leaders cannot engineer, data process, re-organize, or innovate their way through them.

I’ve written earlier in this column about the journey of almost all leaders – where over time their job depends far less on technical and tactical skills and more on strategic and interpersonal skills. As leaders grow in responsibility, they of course must stay abreast of business skills and development, but they are now in a new business – not technology, not engineering, not accounting, not pharmaceuticals, etc. They are now in the leadership business.

Even though this phenomenon is well known, and mirrored in the career of the vast majority of leaders, the way to build strategic and interpersonal skills is still elusive for many executives. The bulk of corporate training is oriented around technical and tactical business skills. Executives are reluctant to let go of building “hard” skills to focus on the “soft” skills – that characterization itself (which I do not like to use) makes them feel less useful to a fast paced firm grinding out products or services in a go-go-go! environment.

There are no certifications or professional accreditations for the master strategist, the empathetic boss, the inspiring leader or the great communicator as there are for many other roles.

When my clients or students ask me for a way to “train” for this new requirement in their leadership life, I have many tools and guidelines for them to use, many of which are outlined in my forthcoming book with Mark Nevins. But the overall goal for them all is for the leader to be able to confront and overcome the challenges of a sophisticated business environment by developing a new source of authority, one based not on their business proficiency but on their wisdom and sagacity.

I’ve written in this column before about the importance for leaders to “grow” their emotional intelligence, as Daniel Goleman and others have reminded us. But just having emotional intelligence is not enough. The executives I work with want to know how to be the wise King Solomon of their organization, the Socrates who can tease out the major issues confronting the team that are not obvious to everyone, the mountain-top guru on who is recognized in the industry as not just for being a competent corporate leader but is an industry sage as well. The fair community leader who can help solve issues like the one Google is facing.

I use phrases in my work with leaders like Chief Philosophy Officer or Chief Ethics Officer so it is natural for them to ask me, “Well, how do we become that?” “How do we have the authority in the minds of our followers to be the one who answers the ‘Why?’ questions of the enterprise and not just the ‘How?’ questions?”

Sheer business competence can win the day for a manager in overcoming the challenges of business complexity– and gain them loyal followers. But leaders confronting the challenges of business sophistication find that their followers care much more about who they are as a leader in the enterprise, not simply what they can do. As one moves towards the top, it’s not about one’s skills anymore, it’s about one’s character and judgement. 

Having wisdom rather than just smarts, having good judgement rather than just good business understanding, being able to listen rather than just command, being empathetic and responsive rather than just being determined and directive, being able to inspire rather than just give orders – these are often the character traits that leaders need to develop in order to backstop their formal sources of authority. 

In building the case for leaders to acquire a gravitas that is not necessarily rooted in their being the smartest person in the room, I will sometimes use the historical analogy of the biblical figure Solomon, a name heavily affiliated with wisdom and judgement. When granted a wish for what he needed to “rule” his people, Solomon did not ask for power to rule, he asked for wisdom to tell “good from bad,” and “right from wrong.” He asked for an understanding and discerning heart – not a big brain or huge muscles. For him, that was the key to being effective…and authoritative. He was not seeking merely to be a wise judge, but to be a successful leader. 

In order to have those skills, which helps in dealing with issues like Google is now, it is important for executives to have range and perspective beyond their business expertise. They need to broaden their leadership mind so that they are authorities not just in their industry dynamics, customer needs, technological sphere, or their balance sheet – but that they are students of human nature, and authoritative on the human enterprise. 

I often suggest to executives that to build this skill they invest in themselves and their leaders with serious executive education experiences that are a bit outside of their industry or even business in general. Taking a week off to go to a top business school with other executives is a very enrichening experience – often useful for the strategic networking value alone. But if the curriculum is oriented around your industry (i.e., Managing Health Care Delivery) or an operational area (i.e., Mergers & Acquisitions), or around management techniques or trends (The Science of Lean Operations,) – all current executive education summer offerings at top-10 business schools - then the leader is likely deepening their existing source of authority and knowledge base…not broadening it.

I prefer the developing leader go a bit “further afield” and really do some mental heavy-lifting to broaden their perspective and understanding of human beings and organizations. One such program in which I am involved as a moderator is the Aspen Institute’s executive seminar. A week-long seminar intended to probe the question of “What is the nature of a good society and the role of leaders in it?” The Aspen seminar has its participants read very serious texts from some of the best thinkers of the past three thousand years and discusses them together. Reed Hastings, the founder of Netflix, recently called the seminar “the best whetstone to sharpen the saw” – Stephen Covey’s term for growing as a person and a leader.

The readings are difficult, sometimes dense. The discussions are passionate and heart-felt and the full message of the authors from the texts only becomes evident in the course of the moderated discussion. And as most of the participants are business or non-profit executives, they are often very frustrated by the relevance of Aristotle or Virginia Woolf to their development as an effective organizational leader.

But the fundamental question of the seminar – what is the nature of a good society and the role of leaders in it? – becomes clearly relevant when the participants think about their firm as a mini-society that they are leading and trying to make a good society for those involved in it or touched by it. To be effective, as Pichai hopes to be, leaders need a deepened and heightened understanding of the sources of different assumptions and motivations by their stakeholders. Armed with that, leaders learn to transcend differences in values and create their own version of a good society in their company or organization. 

It is a demanding program, but one that organizational leaders almost universally say gave them a deeper understanding of human nature and enterprises – the terrain through which all leaders must navigate. Doing the seminar in a group (the founder of the seminar once said that reading alone is like drinking alone) allows executives to practice critical skills in listening, understanding, and reasoning their way to difficult choices not about business strategy, but about leading groups of diverse people working together to accomplish something unique. 

This is the core competency of a leader who has reached the top. Not making the call on debt/equity ratios or product development timelines – but leading a group of people together to a definitive place despite their differences.

Most business leaders got to where they are by a superior command of the “X’s and O’s” of their business, and considerable accomplishment in those areas. Bravo! I did too. But they soon find out that to overcome the different challenges confronting a sophisticated business requires a different mindset, new behaviors, a broader range of knowledge and perspective, and a renewed and broadened source of authority.

(This is adapted from John Hillen & Mark Nevins' New Leader Next Year: Recreate Yourself Before Your Business Outruns You, forthcoming from Select Books in Spring 2018.)