Introduction

WE NEED (BETTER) LEADERSHIP MORE THAN EVER

Why culture-driven leadership?

Simple: it works. And it works much better over time than the alternative, which I am defining as context-driven leadership. Context-driven leadership is defensive in nature and directed at mostly short-term outcomes. Why is time important? A recent study reported in Barron’s annual Top CEOs issue concluded that “the median tenure among the S&P 500 companies” was less than five years. Ten years ago the average was more than seven years. And unfortunately, tenures continue to shrink. A CEO with ambition and big plans likely won’t have a lot of time to lead a company to greater success.

It would seem to make sense, therefore, for a CEO to focus on short-term goals and achieve success in the limited timeframe allotted them. It turns out that’s not a good route to take. The argument in this book is that culture-driven leadership is the only viable option that will deal effectively with those shorter and shorter timeframes. In other words, culture-driven leadership can address complexity better. How do I know this? Personal experience. This book isn’t about me, however. It’s about leaders of the future. Who will they be? What will they need to know? Most important: Are you one of them?

• • •

Whenever I think about culture — what it means — I recall a meeting back in the early 2000s, when I was in the process of securing a location for the new ING Direct USA corporate offices in Wilmington, Delaware. My Dutch investors expected me to select a more conventional location, like New York or Boston. Not only was Wilmington not a traditional banking centre, it was home to the biggest credit card companies. What in the world was an upstart internet savings bank doing there? “That’s just the point,” I said. “What better place to be the David to the industry Goliath?”

They came out for a visit. I was worried, of course, they’d decide I was in over my head, but by the end of the visit, they had bought into my strategy, which boiled down to this: Why take a conventional approach to building a business that is all about breaking the rules? When I explained my thinking, the chairman pulled me aside. He wanted me to know that he liked my plan and added that I was the only American he could trust.

I thanked him but didn’t have the heart to tell him the truth. “I’m Canadian.” It was for me a classic and incredibly illuminating leadership moment that I have never forgotten. Know who you are; even better, know who others assume you are.

• • •

I am a passionate advocate of culture-driven leadership. I think that leadership is more important than ever — but not just any kind of leadership. Over the course of the book, I hope it will become clear why culture-driven leadership is the most effective kind of leadership, the kind most likely to ensure the sustained success of a company or organization.

Our need for talented leadership is one of the biggest challenges we face in the decade ahead. Not long ago, I received a call from a friend and colleague. A respected and extremely talented administrator and academic at a prestigious business school, he wanted me to know he was turning down an opportunity to extend his contract. Naturally, I was stunned. I asked him why. He told me that he felt that he was increasingly having to fight what was a “no win” battle. Every day he was faced with a new test he had to pass; the energy that he would have preferred to spend on the exciting and important leadership challenges of planning for the future was being sucked up by having to mediate the endless squabbling of rival factions. Frankly, it wasn’t the first time I had heard a leadership colleague expressing serious doubts — not about leadership but the possibility of leadership.

I’ve spent the largest part of my career as a passionate advocate on behalf of culture-driven leadership. It’s a position that was unusual early on in my career, but not anymore. Today, you can stumble across a reference to it on almost an hourly basis. An online search I made recently for “business culture articles” turned up about 835 million results; there were about the same number on “corporate culture.” Unfortunately for me, I also found 3.7 million references to books about business culture. Why another? I wrote this book for two reasons: first, to discuss the unprecedented challenges businesses face today; and second, to review again why culture-driven leadership will be such a valuable tool in meeting those challenges.

WHAT’S IN A NAME?

When you hear the name Elon Musk, what immediately comes to mind? How about Richard Branson? Both are incredibly successful and well-known entrepreneurs and CEOs. But that’s about all they have in common. It isn’t just that they have different styles. It’s more than that. They each, through what they say and do, generate a different kind of culture; they live differently. And that difference is reflected in the very different cultures that they have created in the companies that they run. These two very different men drive very different corporate cultures.

The Merriam-Webster Dictionary defines culture as “the customary beliefs, social forms, and material traits of a racial, religious, or social group; also: the characteristic features of everyday existence (such as diversions or a way of life) shared by people in a place or time.”

“Some workers,” a business journal suggested, think “[culture] is a sense of organizational belonging and a strong connection to colleagues. Others say it is a set of shared values and beliefs that guide decisions. Some define it as an intangible asset described as the soul of the company.” However it is defined, workers have made it clear that they believe culture plays a major role in a company’s success. The problem business leaders face today is that culture means different things to different people. Creating a consensus or finding common ground is harder and harder. It is up to leaders to define that culture. I believe that the success of a business depends to a huge degree on harnessing the power of culture-driven leadership. To that end, it will be helpful to think of culture as “how” we get things done as a priority, not just what we get done.

OUR BRAVE NEW WORLD

We hear a lot about inclusion. Welcoming and valuing everyone is important; we all benefit. Practising inclusion is the right thing to do. The paradox of modern life, however, is that as society recognizes diversity and becomes more inclusive, we are also becoming more divided. It is getting harder to figure out what we have in common. Culture-driven leadership is focused on finding commonalities, shared interests, and aspirations. It’s not where we’re from that matters, right? It’s where we want to go. That’s the heart and soul of culture-driven leadership.

Trust in traditional institutions — government, courts, the media, universities, law enforcement, religion, and so on — has dropped to the lowest levels ever. In a U.S. study, people described their society as “struggling,” “negative,” “lost,” and “bad,” and described their country as “[going] downhill, divided.” They found themselves “doubting democracy, falling behind, and tuning out.” Experts tell us that, overall, we have never been better off, but privately, we feel that the opposite is true. Familiar traditions and forms of authority are being attacked. Polls tell us that young people have little faith in the ability of capitalism to improve their lives, don’t feel that optimistic about the future, and have no belief that anything of value can be learned from the past. We live in a world that many see as meaningless, where there is what one historian described as an “erosion of inherited beliefs and customs.”

We can’t express an opinion, idea, preference, or observation, or register a disagreement, without the worry that having done so we will be branded, shamed, humiliated, harassed, ostracized, or “cancelled.” Years ago, it was generally accepted that conflicts could be resolved through dialogue, that if we could only get to the root of our disagreements, we would realize we have more in common than what separates us. That idea seems naive today. According to a recent Pew Research study, only 55 percent of Americans have “a great deal or even a fair amount of confidence in their fellow Americans when it comes to making judgments … about issues facing the country.” In other words, we don’t trust our leaders, and don’t trust one another, either. Who’s left? And what does that mean for society?

Interestingly, those polled identified business as “the most trusted institution in the country at present.” In fact, business ranked higher than government when people were asked to state which institutions had the competencies required to effect meaningful social change, and higher when it comes to ethics overall. That’s the good news. The not-so-good news is that most also believe that business is not doing enough at present “to address the larger issues that are facing the world.” Those polled stated that business needs to be even “more engaged.” A huge majority of consumers (87 percent) said they’d “purchase a product because a company advocated for an issue they cared about,” and “more than 75 percent would refuse to purchase a product if they found out a company supported an issue contrary to their beliefs.”

According to a report by the World Economic Forum, “business leaders are facing new and difficult challenges, and … an ecology that is evolving rapidly … in ways that are hard to predict and even harder to manage.” And there are other new problems facing leaders. The Covid-19 pandemic, for instance, virtually overnight became the greatest economic challenge since the Great Depression. It created social and cultural challenges, too, which in turn put (and continue to put) enormous pressure on leaders to successfully navigate new and unfamiliar terrain.

An unexpected consequence of the pandemic and the sudden global shutdown of huge sectors of the economy was that an unprecedented number of workers had time to re-evaluate their employment situation, goals, needs, preferences, and long-term prospects, and millions decided to leave the workforce in an out-of-market migration known as the Great Resignation. Suffice to say, no one saw this coming, and no one really knows where we are headed.

Currently, businesses in many sectors are struggling not only with finding employees to fill positions but finding the right employees. As a result, many businesses are experiencing what has been termed a “skills deficit.” One major driver of this migration, according to the report, “appears to be that many workers are no longer willing to put up with the pay and/or working conditions they accepted before the pandemic.” Indeed, the summary of the federal government’s final jobs report in 2022 concluded as much: it’s hard to find enough workers for some jobs. In the 1930s, the problem was millions of workers looking for jobs (any job), while today, it’s millions of open jobs with too few workers.

In a segment about the job situation that appeared on the PBS NewsHour in January 2023, the correspondent suggested a generational explanation for the deficit: “young people just aren’t interested.” They have, it was suggested, a different work ethic than older generations. When a twenty-something was asked about what she needed from a job, she answered, “[I would only take a job] if I knew that my labor would be valued, that my personhood would be valued, that I wouldn’t just be another cog in this machine that keeps endlessly grinding us downwards.” Today, workers wish to play a larger role in deciding what a company’s culture will be, which is creating formidable challenges for leaders engaged in long-term planning and establishing goals.

That leadership is always adapting to new contexts and conditions is not news; flexibility is needed. But how flexible can leadership be before it ceases being leadership? The world is not merely changing generationally; the changes are structural and foundational. What that will mean for leaders and for leadership is not at all clear. Is meaningful leadership — are leaders — on the endangered species list? How will young leaders learn what they need to know about leadership to thrive? After all, we all benefit from effective and meaningful leadership. And maybe you think you might be a leader who will end up making a difference.

Are we ready? Are you ready?

HOW CHANGE HAPPENS

I am a member of a generation that well remembers President John F. Kennedy inspiring a nation to find in itself — inside each and every citizen — the hidden or unexploited resources of leadership for creating a better America and a better world. “Ask not what your country can do for you — ask what you can do for your country.” Or, as I like to say, Change won’t happen until someone wants it to happen.

Effective leadership requires the setting of priorities. Tell me what you pay attention to, and I will tell you who you are, in other words. What are you paying attention to? What are you focused on? What is the commitment you are making? We’ll consider these things in detail in the chapters that follow, but for now, remember that how a leader answers questions like these will make all the difference. As I hope will become clear in the pages ahead, the power of culture-driven leadership requires a deep understanding of a culture. Step one: rethink what we think we know about culture. Only when we’ve done that can we create the culture we need. What is it? How do we recognize it? What changes culture? How is it sustained? How do I use it to drive my leadership for the desired outcome?

WHY CULTURE IS SO IMPORTANT

Shaping a culture is a formidable task. Only the best leaders can accomplish that feat. Emotional maturity, authenticity, and a strong character are all essential leadership qualities, and all are crucial to successfully lead a culture-driven company. Unfortunately, these and other valuable qualities needed to be a great leader are not taught in a classroom. They can be developed, but only life can provide the necessary lessons.

Also essential is an alignment between the leader’s passion, the company’s mission, and the corporate culture in which everything transpires. To have an impact in this new environment, a leader’s ethos must be closely aligned with the culture of the company they hope to lead. Aspects of that culture might be particular to that corporation, but it’s also likely that the culture as a whole is reflective of a much broader culture, reflecting the language and nationality, or ages and interests, of the employees. A leader whose own culture is in step with a company’s culture is likely to be much more effective. The most important question to ask about corporate culture is whether workers think they’re in a job — or on a mission. A visionary leader is on a mission and inspires their employees to feel that way, too.

WHY “ABOVE THE CLOUDS”?

The trip had been a disaster. Not only was I convinced we had made no progress, I left for the airport convinced the project was dead. I am never good with failure. I take it personally, so this was hard to take. At the airport, I was like a zombie. The events of the day just kept replaying in my head: Why did it go this way and not that way? What did I do wrong? What should I have done differently? Thoughts just kept churning round and round in my head; the noise was deafening.

Suddenly, it was like a switch had flipped. The noise in my head cleared. I was looking out the window, thousands of feet above the ground. I marvelled at the view, at how “right” everything looked. Sky, clouds, plains, mountains, rivers, cities, towns, roads and highways like spidery veins. It all seemed to work. No chaos or confusion, nothing out of order; everything seemed to fit together exactly as it was meant to. On the ground, I knew that was not the case. Such a simple and even everyday insight, but it brought an incredible and much-needed perspective, as well as a sense of calm. Spending time above the clouds made all the difference.

Let me explain. What I see more and more today is leaders paying lip service to the importance of culture — just another means to an end. It should be (and can be) much more. As we all know, the world is changing at a rate that makes it impossible to keep up; for a leader charged with navigating life in the crowded fast lane of global change, the white-knuckle pace can be challenging and intimidating. Even the best and most accomplished leaders (as we will see) can find themselves at the top of the ladder one day and roadkill the next. It’s the right time, I believe, to revisit the idea of culture-driven leadership — the right time to rediscover its power. The motivational plaque on the wall is nice but it probably doesn’t have much impact.

GETTING STARTED

In Above the Clouds, I address myself to exploring the open questions and challenges faced by culture-driven leadership today. The book will be, I hope, a dialogue with young entrepreneurs or aspiring executives — to anyone anywhere and in any walk of life who has ever wondered if they have leadership skills or potential.

This is not a “how do I become a leader” book. It’s more an ongoing “no right answer” discussion about discovering who you want to be as a leader. What kind of leader do you want to be? The challenges a leader faces change over time. What will that mean for you? Critically, what is it about leadership that stays the same?

Remaining true to a goal despite changing challenges is what defines culture-driven leadership. Redefining goals when faced with changing challenges is what defines context-driven leadership. Context here refers to the specific set of circumstances, conditions, and issues that exist or prevail within or act on a company at any given time. Culture is a set of behaviours or principles that prevails and remains steady across a series of different contexts. For instance, a company culture that traditionally has prioritized “friendly,” quality customer service might be threatened by changes made by a leader brought in to cut costs during difficult times.

The chapters are loosely themed around the ten principles that have structured my culture-driven leadership career. I hope they work for you. You may come up with your own set based on your own sense of what matters and is most important to you as a leader. I’ve steered clear of technical jargon; the tone is conversational, and the arrangement is exploratory. The chapters are numbered, but my hope is that you’ll feel free to jump back and forth between them, agreeing or disagreeing, and pushing the conversation. I don’t pretend to have all the answers. I do have a lot of questions. In fact, I am unapologetically Socratic in my conviction that asking questions is the best way to spark and build productive debate. Anyone who has spent time in the learning forum of case studies will see this pedagogy here. This book, in other words, is a way to help you find the leader inside you. As I said, the world needs leaders today more than ever. That leader could be anyone. You could be from anywhere, from any background, from any walk of life.

Who knows, you could even be a Canadian!