Mitigating Leadership Risk in Uncertain Times

The current pace and scope of global change are unparalleled in human history. This dramatic upheaval is largely due to dizzying technological development that enables instantaneous global sharing of information.

Moreover, the world order established after World War II is also undergoing a seismic shift. One notable example is the United States. It has recently begun withdrawing rapidly from its leadership position in world trade, environmental protection and diplomacy; creating a vacuum that could be filled by other resurgent and increasingly assertive superpowers such as Russia or China. Profound changes such as these are impacting the global economy in highly unpredictable ways. The new normal appears to be volatility, complexity and uncertainty. There is an urgent need for leaders to successfully navigate their organizations though these uncharted waters, which teem both with unknown dangers and new opportunities. Sadly, many of today’s business leaders are unprepared for this challenge. According to academic literature, one in two business leaders is deemed a disappointment, incompetent or a complete failure. The situation is no better for executives new to their position – either external hires or those who are newly promoted; though internal promotions tend to fare better. Between 40% and 64% of new executives leave their jobs (voluntarily or otherwise) within the first 18 months of being hired. (See my post, Great Leaders: The Competency Imperative, November 2015).

The cost of replacing an underperforming executive within 18 months is enormous: approximately three times the leader’s first year salary. The cost is much higher when productivity and opportunity costs are factored in. (See my post, Why New Leaders Fail, August, 2015). While less conspicuous than financial risks and cyber threats, leadership is the single, most ominous and under-scrutinized risk facing organizations today – bar none!  Ineffective leadership affects every aspect of an organization from strategic and succession planning and execution, to team building, operations, business development and corporate reputation...  It can ruin even great organizations over time.

Companies take a huge risk in hiring and assessing their leaders because they can’t always predict how human beings will actually behave within a new work environment.

At the Bonar Institute, we identified the critical need for organizations to mitigate the performance risks of their leadership teams. We developed our unique Leadership Risk Mitigation Program for Management, Boards, Government, Non-profits and Entrepreneurs. This program includes innovative, leading-edge advisory tools that enable us to both identify and evaluate the capabilities of leaders and their management teams, as described below:

What we do: We evaluate the management team to determine its potential to meet stakeholders' performance expectations...

Our approach: We tailor our process to meet the unique needs of our clients. For example, does the leader have the necessary knowledge and skill set to be successful? Does he or she have the crucial management and human relations skills? We then identify any gaps and report our findings to our client.

Discovery and Diagnostics: We conduct discovery and diagnostic sessions with relevant parties to identify and evaluate their needs and expectations, as well as the degree of risk they perceive in situations facing our client's organisation. We supplement this phase with appropriate assessment tools: Emotional Intelligence, 360, Psychometric Tools.

Reporting and Next Steps: We present our findings and recommendations, including next steps, if appropriate. These may include: executive coaching and mentoring, leadership development and training, corporate governance, and skills enhancement techniques.

Our comprehensive approach helps organizations minimize management risks and position them for success in our highly uncertain and complex economy. Please contact us for more information on how we can help you succeed.



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Stuck at Work? Choose to Become Unstuck!

If you are in a rut and feel stuck in your job, you are not alone. Research shows that up to 40% of managers and executives in the US are dissatisfied in their jobs (Pew Research, October 6, 2016). There are many reasons for this dissatisfaction ranging from stress, issues with your boss, not feeling valued, work environment, poor salary and benefits, office location, etc. Some reasons are much more serious, such as burnout and severe stress reactions such as anger, anxiety, depression and substance abuse.  These problems may even require therapy. Approximately 20% of the population in North America suffers some form of mental illness, but fear of being stigmatized is often a barrier to receiving appropriate help.

In my experience as an executive coach, there are two phases of being stuck in the workplace that are not related to emotional or mental health problems. The first phase is most frequently exhibited by those who are in a fairly shallow rut. They tend to be bored with their jobs or dissatisfied with their bosses, their salary, etc.  They are generally too complacent to move or too afraid to take action: “It’s tough out there!” is a refrain often voiced.  Typically, this inertia can be remedied by speaking to a coach, a good friend, a family member or a trusted colleague, who will tell them the truth with ruthless compassion (see my March 16, 2015 post, Ruthless Compassion? Really?).  

In the second phase, the rut is deeper and more complex. For such managers and executives, the consequences can be debilitating. They feel great pressure not only to perform at peak levels: to be capable of dealing successfully with any and all problems, and to be seen as being on top of the situation. They feel an urgency to act quickly -- only to realize they can’t, no matter how hard they struggle. Others are impervious to their condition, and are functioning in an unhappy, quasi-mechanical daze.  Many are despondent, and some are even desperate.  They may fear for their job and for their health…  

The good news is that they don’t have to remain stuck.  They can choose to get unstuck. I speak from personal experience. During my career, I felt at times trapped in a morass that affected my productivity and my well-being. I had to learn to find the resources deep within myself to get unstuck.  These experiences have helped inform my coaching of senior managers and executives who also find themselves in such situations. The first step is for these clients to admit and understand the situation which is sapping their enthusiasm, their energy and their ability to perform. This may seem obvious at first blush, but it isn’t.  Most of us are more accustomed to taking immediate action, rather than taking the time to reflect on what we are experiencing and to become self-aware.  One must learn at such times to heed our body when it is crying out for help or to listen to well-intentioned colleagues or friends who tell us we’re 'not right'.  

Though self-awareness is necessary, it is not sufficient.  To become unstuck, marshalling inner resources and adopting a structured approach based on practical techniques is required.  This is a daunting task, especially if left to one’s own resources.  My responsibility as an executive coach is to assist my clients identify the causes of such ruts and to develop the proactive techniques required for them to move forward.

This type of professional support is not a luxury. It is one of the most important investments an organization can make.



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Surviving or Thriving? Prospering Through Purpose

Today's volatile and complex global economy creates significant corporate risks that executives must effectively manage and resolve.  The most prominent risks are financial and cyber threats. Others though, such as leadership, strategic and succession planning and execution, team building, and corporate reputation are perhaps less conspicuous, but are no less ominous.  Indeed, leadership is the greatest single risk facing organizations today – bar none! (See my January 8, 2016, post entitled CEO Performance and Board Oversight.)  Ineffective leadership can ruin even great companies over time.

The most successful leaders assess risks beyond the narrow imperative of robust quarterly earnings. Of course, profits are of the utmost importance for the success of their businesses; however, profits alone cannot be their single purpose. It is crucial how the money is made. Companies such as Amazon, Twitter and Facebook have implemented policies to avoid having hate speech associated with the products and services they allow on their platforms. These organizations realize that profits involving a social objective create a harmonious circle of prosperity between the company and society. They embrace a Purpose.

Ah, but what is Purpose and why is it important for business leaders?  Based on my experience with executives and the review of the best thinking on the subject, it is clear that Purpose is a moral choice that principled leaders make to achieve something greater than themselves and the companies they lead.  For some, it’s Social Responsibility (Toms and Starbucks), for other it’s Excellence (Berkshire Hathaway), and for still others it’s Innovation and Discovery (Apple, Tesla and Virgin).  Purpose inspires leaders to believe that their vision of the future is worthwhile and attainable, and it inspires others to reach for their dreams too.

Not all companies have a Purpose, and some succeed financially without it. However, the most successful ones understand that Purpose is key for their prosperity over the long term. It creates a direction for their organizations, and it leads to better decision making on a day-to-day basis. Their leaders are Purposeful. They recognize that real risk mitigation requires more than drive, intellect and experience. They don’t ignore old assets and strengths; rather, they endeavour to create and foster new ones based on a deep understanding of their genuine professional and personal values, as well as their companies’ cultures. They realize that business is about creating lasting worth for all their stakeholders: shareholders, team members, vendors, customers, society and the environment.  All are unique and interconnected in a vibrant community of purpose and prosperity.

Purposeful Leadership Circle.png

Each stakeholder complements the others synergistically. This leads to the creation of even greater value.  Indeed, research indicates that there is a positive correlation between this type of corporate culture and profitability.  Respected companies such as Southwest Airlines, Google, Costco, Tata, Royal Bank of Canada, Unilever, Nordstrom, Ecolab and Trader Joe’s have all shown that this way of doing business leads to multifaceted success over time, including higher profits.

When a company has successfully developed and deployed a clear and consistent organizational purpose, its culture becomes more closely aligned with that purpose. Then, goals, strategies, objectives and tactics are understood, embraced and acted upon more effectively and enthusiastically.  

Executives who are successfully managing the volatility and complexity of the global economy have a strong sense of purpose. They embrace a reality greater than themselves and the companies they lead. They create a corporate culture focused on achieving effective, practical, sustainable and transformational results for the long-term. (See my September 6th, 2016, post entitled CEOs & Stakeholders’ Value Creation.) They choose service over short term self-interest.

Purposeful leaders have let go of old management paradigms. Supported by like-minded management teams, they inspire all their stakeholders by example to build a more coherent and prosperous enterprise that is far greater than its individual parts. Purposeful leaders are ethical corporate stewards focused on creating a meaningful, sustainable future both within and beyond their organizations.



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Deep Coaching: No One Size Fits All

Our approach to executive coaching is based on the firm belief that each client is unique and has specific needs, challenges, opportunities and practical goals. One size doesn’t fit all!

In our practice we have identified the risks and benefits of a coaching engagement. The risks of a failed engagement are considerable, both to our clients and to the Bonar Institute, as follows:

Risks for the client:

  • The client does not receive the full value of the coaching they require. This includes adapting satisfactorily to a new organizational culture or position, fine-tuning competencies, enhancing professional development and having access to the trusted advisor/executive confidant they need.
  • The financial investment for an executive coaching engagement.
  • The potential opportunity costs in terms of time, unmet expectations, and unrealized revenues and profits for their organization.

Risks for the Bonar Institute:

  • A dissatisfied client
  • Possible lost business
  • Potential tarnishing of our reputation

The long-term benefits of a successful engagement to a client's organization are a more productive, satisfied and effective leader, and overall improved organizational performance. The benefits to the Bonar Institute are that the organization will likely use our services again, if the situation should arise, and refer us to others.

To ensure that our coaching is tailored to meet our client’s specific needs, we have developed the following three-stage preparation program:

1. Establish the potential success of the engagement

Many prospective clients don’t fully understand the purpose of executive coaching. Without this understanding, it is difficult for them to know what to expect. Expectations may be misinformed or impractical. To minimize this risk, we ensure that our prospective clients understand the nature and limits of deep coaching. Have they had any previous experience with an executive coach? What were the most helpful elements? What were the more challenging ones?

We then identify their expectations and goals for the coaching engagement. What would success look like? This often requires clients to change their beliefs, attitudes and actions. We determine whether they have the openness and motivation to change. Are they fully committed to the process? If not, the coaching will likely fail. If the prospective client is committed and we determine that we can help them, we then evaluate whether a positive chemistry exists between the prospective client and our coach. Only then do we accept the engagement.

2. Personalized Review:

We need to have a deep understanding of our client. To this end, we administer an Eqi (Emotional Intelligence) Leadership assessment to the client and a 360 to key stakeholders. We ask the client to tell us their story in a comfortable and safe environment. Confidentiality and trust are the hallmarks of our entire engagement. We pay particular attention to what we learn of this client’s career and the following needs:

  • Behavioural
  • Intellectual
  • Emotional
  • Physical (e.g. nutrition, exercise, stress management)
  • Purpose
  • Fulfillment

This review will provide valuable insights to the coaching process. It will also serve as a beginning benchmark of the client’s situation prior to starting the engagement.

3. Review of the Organization and the Industry:

  • Corporate governance, organizational structure, operations, culture and values
  • Key challenges and opportunities for the organization and for the industry

Our three-stage preparation program helps optimize our coaching engagements and minimize risk of failure. We ensure that our personalized coaching engagement is tailored to the unique needs and expectations of our clients. The Engagement Plan is based on goals and timelines that are clear, achievable, measurable and monitored. We develop these with our clients and we then hold them accountable.

Typically, we conduct a second set of Eqi assessments at the end of the engagement to measure success. We review areas that might not have met the goals of the Engagement Plan, and explore possible next steps.



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Thriving in a World of Exponential Change Through Deep Coaching

The pace of change we are currently experiencing is unparalleled in human history.

This is due in large part to exponential technological change coupled with the instantaneous dissemination of ideas and information across an increasingly connected world. (See Duleesha Kulasooriya and Maggie Wooll, Unlocking Human Potential: Proactive Practices for Individual Elasticity, Deloitte University Press, 2017). The options available to meet our needs and pursue our goals are evolving in extremely rapid and often unpredictable ways. New business models are sprouting seemingly everywhere. For some executives, this is a step into a new world full of excitement, vitality and promise. For others, there is distress over the unknown. They worry about what (and how many) jobs will remain in the age of intelligent machines and rapidly improving artificial intelligence. Some envision our changing world as a kind of hyper-connected technological wasteland where their connection to others – and to themselves – is being lost.

We are all struggling to keep pace with the world we have created and are continuing to create that now has unlimited options and on-demand everything. We are left with a sense of fleeting time and lost opportunities. Amid these pressures, we need to develop new ways of coping, adapting and leading.

While our world is evolving rapidly, our basic human needs remain unchanged. To better deal with the pressures and stresses of today’s business environment, many executives are striving to manage their lives holistically: physical and mental well-being, professional development, volunteering, community service, etc. They are not turning their backs on technology. Rather, they embrace smart phones, social media, and video conferencing, among others. However, they are also searching for more balance in their lives. Some are turning to ancient disciplines such as meditation, mindfulness, yoga, etc. Today, the workplace wellness industry in the US is worth over $40B US. (See Unlocking Human Potential: Proactive Practices for Individual Elasticity.) The practise of these disciplines can help executives bring creativity, calm, reflection, and resilience to the challenges of a turbulent, uncertain future. This, in turn, can lead to increased productivity, improved performance and better staff morale.

The International Coaching Federation defines coaching as partnering with clients in a thought-provoking and creative process that inspires them to maximize their personal and professional potential. Our work with executives has shown that coaching at a deep level is a highly effective way of developing and sustaining leadership. Deep coaching focusses on acquiring awareness of intellectual, emotional, physical and spiritual needs without encroaching on the domain of psychotherapy. Our approach helps executives develop and maintain equilibrium between the exponential change in their everyday lives and their own human needs. Deep coaching helps leaders develop the insights and decisiveness to successfully manage unrelenting and unpredictable challenges. They let go of previously ineffective approaches. They commit themselves to learning new skills and knowledge that are urgently needed now and going forward. The most successful executives concentrate on finding and striving for a higher goal and purpose beyond themselves and their organizations. Thus, in transforming themselves, they can transform their organizations, as well.

Each one of our clients is unique and has specific needs. 'One size does not fit all.' Before starting deep coaching with a new client, we follow a rigorous preparation program. This will be the subject of my next article.



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An Enduring Question: Can a Company Have a Soul?

One of my coaching clients asked me recently if a company can have a soul. This question is very common in today’s fiercely competitive business environment - witness a recent search on Google came up with over 100 million results.

Based on my experience with executives and a review of the best thinking on leadership and governance, I have identified the following characteristics of a company with soul. By soul, I mean a broader, higher purpose than just more robust quarterly results.

Social responsibility: Profits are of course one of the most important drivers of business, but they cannot be its sole purpose. Not all profits are equal. It matters how money is made. For example, companies such as Amazon, Twitter and Facebook have implemented policies to avoid having hate speech associated with the products and services they allow on their platforms. Companies with a higher purpose realize that profits involving a social objective create a positive cycle of prosperity between a company and society. These organizations embrace the interdependencies and synergies between their stakeholders: shareholders, employees, vendors, customers, society and the environment. Companies such as Tata, Unilever and Google see their organizations as greater than their individual component parts. Social responsibility is becoming important for executives and the companies that they lead. Research indicates that there is a positive correlation between this type of corporate culture and profitability.

Environmental responsibility: Forward-looking companies understand that our natural resources are being consumed at an unsustainable rate. They see it as a stark, existential threat for humanity. They also recognize the real prospects for sustainable growth by developing innovative and technologically compelling solutions to reduce ecosystem loss. Some, like Intel, Ericsson and Ecolab are creating sustainable long-term value for their shareholders and all their stakeholders by decoupling resource consumption from growth. Forward-looking companies, such as these, grasp the opportunity to reinvent a greener more sustainable economy for the generations to come. The most forward-looking ones are already doing so.

The human imperative: The slogan of one of Canada’s oldest and most efficient steel makers, Dofasco (now part of ArcelorMittal) is Steel is our product, People are our strength. Research confirms this adage by showing the link between superior human resource management and superior organizational performance. Successful companies, such as Starbucks and Southwest Airlines, invest time and effort to hire the best talent, and devote considerable resources to retain them. They engage employees who not only have the required competencies, but who also share the businesses’ purpose, values and culture. They stress employee training, empowerment and involvement. They promote teamwork and a team culture characterized by sharing and collaborating. A good team always produces better results than individuals working alone. Incentive programs are team based and compensation policies are fair and transparent. Forward looking companies create purposeful work that challenges and encourages their employees to learn and grow.

Moral authority: Companies with a higher purpose have moral authority. A company’s stakeholders (shareholders, employees, customers, vendors…) want to know that the company is honest and dependable and that its values align with their own. Stakeholders do not want to be manipulated. The most successful leaders seek to align the values of their stakeholders to create organizational cultures that bring about lasting change, and achieve the desired results. Stakeholders value privacy highly. Trust is the cornerstone; and it is built with transparency, integrity and respect.

Executives who are successfully managing the volatility and complexity of the global economy have a strong sense of purpose. They embrace a reality greater than themselves and the companies that they lead. They create a corporate culture focused on achieving effective, practical, sustainable and transformational results for the long-term. The Bonar Institute is committed to assisting companies discover and nurture their higher purpose, their soul...



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Economic Sustainability & the Environment

This is the fifth and final post in our series on stakeholders’ value creation in volatile times. It deals with the threats and opportunities the environment poses to economic sustainability.

The Threat: Innovation, technology and resource conservation are core sustainability issues to business performance in the 21st century. The economy is increasingly removed from nature and natural processes. Our natural resources are being consumed at an unsustainable rate. The effects of climate change on lives and property is devastating. Many indicators suggest that we are experiencing increasing “loss of natural diversity, changing and expanding disease vectors and the spreading of an unsustainable growth and consumption model” across the globe. (P. G. Brown and P. Timmerman, Ecological Economics for the Anthropocene, Columbia University Press, 2015). The strains between economic winners and losers are worsening. Despite gains in the past decades, nearly a billion people are still living in poverty. (World Bank, 2015) Social and political unrest is stirring in many countries. The world may not be able to feed itself by 2050 if we don’t increase food productivity. The Earth’s ecosystems can’t survive relentless growth in economic production and consumption. (A. Korngold, “Board Governance for a Better World”, The Hand Book of Corporate Governance, Wiley, 2016)

Taking stock: A number of companies and their boards of directors recognize that responsible environmental stewardship is vital for long term corporate sustainability, and that the development needs of the present must not compromise those of future generations. These companies monitor carefully their ability to operate profitably over time in the face of changing economic, social and environmental conditions. Such conditions impact their operations and affect their value creation activities and sustainability. Many companies now report on their performance on these issues so that shareholders (and other stakeholders) can determine where value is being created within the organization. For example, what is a company’s use of non-renewable resources and its impact on the environment? And, how does a company integrate environmental and social factors into its value creation process in product innovation, design and disposal? (D.Y. Park, “The Board’s Role in Sustainability Governance”, The Hand Book of Corporate Governance, Wiley, 2016)

The Opportunity: A number of corporations recognize that they can create sustainable long-term value by decoupling resource use from growth. Some, like Intel, are developing innovative and compelling solutions to conserve energy to reduce the most serious effects of climate change, which they then sell to other companies. Ericsson is developing and marketing smart city technology to help reduce carbon emissions. This is especially important since 70% of the world’s population is expected to live in cities by 2050. Ecolab is a global leader in water, hygiene and energy technologies and services. It helps major companies in over 40 industries to “operate more efficiently, expand their operations responsibly in resource-scarce regions, and adapt to meet changing conditions and expectations.” (Korngold, “Board Governance for a Better World”)

Environmentally and socially responsible corporations understand the stark threat of the irretrievable depletion of our natural resources. They also recognize the very real prospects for sustainable growth by developing innovative and technologically compelling solutions to reduce ecosystems loss. These companies are ensuring the long-term value creation for their shareholders and for all their stakeholders. Innovation, technology, social responsibility and the environment are the pillars of the economic sustainability in the 21st century. Successful companies understand that the threat to the environment is dire, but they also see the opportunity to reinvent a greener and more sustainable economy for the generations to come. The most forward-looking companies are already doing so. For them, the environment is a major stakeholder, as important, if not more so, than the others…



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The Complex Case of Customers as Stakeholders

This is the fourth in a series on stakeholders’ value creation.

The case of customers as stakeholders appears self-evident. Simply, a company cannot exist without customers. The purpose of every business centers on creating customer value. Forgetting that customers are the ultimate decision makers of what they will buy can be fatal. The premise that customers are stakeholders is more complex however. Where do a company’s interests intersect with those of its customers? Corporate boards and management are focused on financial performance, stock prices, and maintaining sustainable and profitable growth objectives. Customers want products and services to meet their standards, expectations and needs at a price they are willing to pay. In addition, an increasing number of their buying decisions are influenced by whether a company’s values align with their own (e.g., fair trade coffee, the green revolution etc.). The challenge is to ensure that the needs and wants of the company and of its customers are met simultaneously.

Forward-looking companies, Such as Apple and Southwest Airlines, devise strategies to satisfy and to reconcile the needs, interests and behaviours of their customers and of their shareholders. Trust is the cornerstone. When customers trust a company, they implicitly give it permission to influence them. Customers want to know that the companies they are doing business with are honest and dependable. Companies built trust by interacting with customers with transparency, integrity and respect. The prevalence of social and mobile technologies has changed the traditional ties that build trust between companies and their customers. These technologies are an accelerant and an amplifier of this process.

Present-day consumers have more power than ever before. They are better informed than they were only a few years ago. For many, trust means respect of privacy. “Seventy-two percent of Americans are reluctant to share information with businesses because they just want to maintain [their] privacy” (J. Gin, “A New Paradigm for Building Customer Trust”, Entrepreneur, June 27, 2016). This reluctance is intensified when global companies, such as Amazon, Google and Facebook, have little or no direct interaction with customers. It should be noted that in-store customers also value privacy. (See C. Esmark, “Your In-store Customers Want More Privacy”, HBR, Dec. 28, 2016.) Successful companies do not manipulate their customers. They ask only for personal information that is necessary to complete the transaction, forgoing near-term marketing opportunities offered by collecting additional data. Respecting privacy is an important branding differentiator for companies competing for the business of often leery customers. (See J. Hinz, “The Power of Customer Trust in Brand Marketing”, marketingland.com, October 29, 2015.)

The most successful brands, such as Starbucks and Disney, ensure that their clients are satisfied at every point of interaction with the company. They create environments that customers value. They eliminate practices and people that detract from the optimal customer experience. They empower their employees, and encourage creativity and innovation in dealing with customer wants and concerns. (See my December 5, 2016, post: “The Case for Employees as Stakeholders”.) One well-known retailer had for many years this simple rule for its employees:

Rule #1: Use good judgment in all situations. There will be no additional rules.

These businesses recognize that acquiring a new customer costs up to seven times more than retaining an existing one. (See “10 Reasons Why Customer Satisfaction Is Still a Crucial Business Metric”, July 16, 2016, by Infinit Contact.) Simply put, excellent customer service leads to customer loyalty, which in turn leads to sustainable long-term success.

The most successful companies treat customers as valued stakeholders. They develop and implement strategies that accommodate and leverage synergistically the interests of all of their stakeholders.



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