World Reimagined: The Moments That Matter Most
We’re in the middle of a Presidential election that, like all such elections, involves heated discussions on which candidate best embodies the mysterious quality of leadership, a topic on which there are a seemingly infinite variety of perspectives.
Given this discussion of leadership, why add to it now? Just look at any newspaper’s front page. From Covid to climate change, the rise of China to Black Lives Matter, the certainties that shaped our world are shifting.
Leadership is most important in moments of transition, and today we’re seeing more change than we’ve seen in generations.
Imagine a marble resting in a bowl. If you flick the marble, it will roll around the bowl, but eventually it will come to rest right back where it started. This is a system in a stable equilibrium, and we see systems in that state everywhere. Markets move, companies change, and governments adapt, but most of the time, slowly and not that much.
The resilience of stable equilibria is why leaders usually don’t have much impact. When they flick the marble, most of the time it ends up back where it started. The legendary leadership researcher John Kotter found that most corporate change efforts fail because the status quo is almost always defended by powerful forces that seek to maintain it.
Even Presidents learn this. When Eisenhower was about to replace him in the White House, Harry Truman remarked, “He’ll sit here and he’ll say, ‘Do this! Do that!’ And nothing will happen. Poor Ike – it won’t be a bit like the Army.”
The fact that most leaders don’t make a difference, though, does not mean that leaders never matter. If the marble escapes or the bowl is shattered, even the gentlest flick can have huge effects. Once the marble is loose, it can roll a long way, and small differences in that initial flick can result in wild differences in where it finally comes to rest.
When equilibrium has been upended, leaders can have an enormous impact. Liberated from the status quo, they can shape the speed and direction of change.
Bowls both contain and protect what’s inside them. They are both shelters and traps. Stable equilibria are safe, but they’re also limiting. Leaders tasked with forging a new one may founder – or soar to undreamed-of heights.
For example, look at Satya Nadella’s transformation of Microsoft (MSFT). When he became CEO Microsoft was astoundingly profitable. But it was also “fading towards irrelevance.” When his predecessor’s retirement was announced, Bloomberg ran a story titled “Why You Don’t Want to be Microsoft CEO.”
Smartphones and tablets had overtaken traditional computers as the center of the technology world, and Microsoft had repeatedly failed to build a meaningful presence outside PCs, leaving its stock and prestige lagging far behind rivals like Apple and Google. Microsoft’s culture was so broken that it was caricatured as divisions pointing guns at one another.
Nadella, who had worked at Microsoft since has was 25, was the sort of lifelong insider who rarely becomes a transformative leader. But Microsoft was in a unique position. It knew that it had to change but – unlike most companies in that situation – it had the resources to do almost anything.
The constraints that normally bind CEOs had been loosened, because Microsoft’s entire industry was shifting around it. Its bowl was breaking, so stasis was no longer an option – it had to change, or be left behind.
Nadella succeeded at one of a leader’s hardest tasks– the transformation of a large company. He did not shy away from difficult decisions, including writing off Microsoft’s $7 billion acquisition of Nokia. Most importantly, though, he pushed everyone at Microsoft to adopt a “growth mindset.”
In his own words – “at the core of our business must be the curiosity and desire to meet a customer’s unarticulated and unmet needs with great technology.”
Many leaders mouth such sentiments, but few make them stick. Nadella did, and Microsoft’s shareholders were rewarded by a $1.5 trillion increase in their wealth in only six years.
For an even bigger example, let’s look again at Truman. When he became President upon the death of Franklin Roosevelt, Truman had to manage both the end of World War II and the beginning of the Cold War. It’s hard to imagine any situation more in flux than that, and this gave Truman a unique opportunity to shape the post-war order.
His administration created NATO, and launched the Marshall Plan to forge the alliance that contained the Soviet Union and won the Cold War. Truman, in other words, steered the United States through a time of unimaginable change into a new equilibrium – the Cold War – so stable that it lasted for almost half a century and left the United States arguably the most dominant country in history.
Why focus on leadership now? Because no one knows what the world will look like in a few years – but we know it will be very different. Because there are critical needs on everything from foreign policy to the future of work, and we can’t address them without skilled and ethical leadership.
Unprecedented change is happening, and change can be good or bad. Whether our marbles roll to a better place or a worse one will depend on how our leaders act.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.