Sharing leadership lessons for the next generation – part 3

Reflections from Charles Style CBE, our Guest Speaker on ‘Leadership’ following his Guest Speaker session on ‘Leading in Challenging Global Environment.’

Charles came to our Business School to speak to a joint guest lecture between MSc International Business Management and CIPD HR Diploma students in March 2022. He shared many leadership lessons on the day and the below is the last part of his reflections on a question from students on ‘what is the implication of the current global situation to strategy and leadership’ (click to see part 1 and part 2)

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This blog offers some observations on the current global situation in relation to leadership and strategy.

We may come to look back on recent decades as a calm before the storm. European security might have seemed assured, and ‘the West’ (itself now a dated description) seemed reasonably stable. Despite a number of intermediate peaks, global deaths from war have declined hugely since World War II.

Quite suddenly old assumptions are being thrown into the air. Russia is again  waging war on its neighbour; China is flexing its muscles in every dimension of international statecraft; the United States (up to now de facto guarantor for the ‘free world’) is afflicted by a crisis of political confidence in the wake of the incitement by the then President to riot and assault on the Washington Capitol; climate change is (or – it may be argued - is not adequately) driving fundamental reform in energy policies; British politics are mired in deepened contention; and so on.

Did we see the current Ukrainian crisis coming?  Expert observers of Putin’s character and motivations certainly did.  However, in apparently stable times, policy makers may be tempted to look away because looking round corners can be inconvenient. In such circumstances memories fade, and wise counsel is ignored.

What generic lessons can we draw for business leaders and strategists?

First, ‘truth can be stranger than fiction’; ‘complexity is infinite’.  One example concerns energy policy.  Do we plan for the carbon-free world? Given the turn of events in Russia, the picture could hardly be less certain. There is at present a scramble for more fossil fuels from non-Russian suppliers. Saudi Aramco, the world’s biggest oil supplier, intends to raise investment to $40 – 50 billion per annum with western support.  The energy policy of the EU apparently envisages independence from Russia by 2030;  France plans to build 6 new nuclear power stations and to become individually energy independent. It is estimated that by 2040 more than half of a basket of vital resources (including copper and lithium) may need to be sourced from autocracies.

How do we make sense of a picture like that; what price international stability?

Another example concerns inflation.  Some historians of the 1920s and the 1960s were not as sanguine as the Bank of England seemed to be a year ago on the probable upper limit of inflation growth, and therefore of interest rates.   I side with the historians. The fog is now thicker than normal; so how do managers and leaders handle this sort of complexity?

Business literature offers various models for dealing with uncertainty.  This is not the place to rehearse them. However leaders need to carve out personal and business time – more than in even the recent past – to come to their own corporate views on the nature of the risks facing them and their mitigation.

I suggest the following are useful guiding principles:

• With risk comes opportunity. In identifying the latter, it is essential to tie down what the risk really is?  Not easy.  In the matter of energy is it riskier to jump early to renewables at great cost, or riskier to wait?  Is there an appetite for high risk in pursuit of high reward, or not? In either case, do we know exactly why?
• Enabling quick reaction; operational readiness. In extreme uncertainty, it may – only may - be unwise to make major leaps straight away.  This however does not prevent a business from configuring itself to move very fast when options crystalize.  This is about being flight of foot: a basis of military operational planning.  How long can I afford to delay a decision (if at all) in the absence of important information? At what point MUST I decide? How do I recognise that point; how do I guarantee to notice it instantly?
• In other words, ‘risk management’ must become an integrated part of live, real operational decision making, not a procedure to tick off as quickly as possible in over-burdened board meetings.
• Find good advice, and stick with the sources you trust. Give yourself space – sometimes physical space - to listen to your instinct.  You may have someone in your organisation who has the knack of engendering the reaction ‘that’s a VERY good point’.  Regardless of seniority or position, keep that person close.
• All this is about avoiding the retrospective regret: ‘if only I had done x [affordable, doable] y weeks ago, I would now be in a place to jump faster than my competitors’. Failing to ‘make dispositions’ is a bitter pill to swallow when it is too late.
• In moments of extreme uncertainty, the need to reserve time and capacity to look up and out - not just down and in - is doubly important.

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Any queries on the blog, the guest speaker or the session, please contact Dr Eun Sun Godwin (e.godwin@wlv.ac.uk) and Dr Jenni Jones (jenni.jones@wlv.ac.uk)