By Meredith D. Ashby and Stephen A. Miles
What gives companies competitive advantage? What are the burning issues for corporate leaders today? How do leaders lead in times of crisis or instability? How do companies identify, attract, develop, and retain the best and brightest people in the marketplace? These are some of the questions we sought to answer as we conducted interviews with hundreds of Board of Directors, Chief Executive Officers (CEOs), senior managers, financiers, academics, management and leadership experts, and many of our own executive search consultants to get cutting-edge perspectives on leadership today.
Throughout these interviews and written essays from some of the world’s most respected leaders, one message emerged with unmistakable clarity: the best-led companies know and believe in the value of people.
On the heels of a global transformation from a physical asset-dominated economy to a service- and information-driven economy in which intangibles drive the marketplace, it is proven over and over again that the greatest single asset of any organization is its human capital. Accordingly, its greatest single challenge is the creation, nurturing and optimization of that capital. Of utmost importance to corporate chiefs, therefore, is the construction of a model for managing people, a system that best serves the people who serve the organization.
From innovative and aggressive recruiting to progressive executive development programs to creating developmental opportunities for promising executives, and to the challenging task of retaining highly talented, motivated and productive teams, chief executives today face the daunting task of creating an environment in which people want to, and can, perform at the highest levels of their potential.
Over the past decade, manufacturing, finance and information technology have been the foci of corporate improvement programs. The more progressive organizations, however, have implemented action plans centering on people rather than on functional and transactional areas as the key to improving productivity.
The people component of a business model is intricately woven into the corporate fabric: in its infrastructure, its operations, its culture, its message to the market and indeed, its very significance in the market. CEOs who haven’t questioned whether their companies are attracting, developing and retaining good people and managing out less desirable talent simply aren’t doing their company and their shareholders justice. Companies whose leaders haven’t translated the recognition that their people are a tremendous source of competitive advantage into action are highly unlikely to be enjoying a competitive advantage in the marketplace.
Some of the world’s most respected, value-driven companies derive an increasing percentage of their valuations from the collective power of their intangible assets—i.e., people, brands, suppliers, partners, and intellectual property. In terms of gaining and sustaining a competitive advantage, the strategic use of human capital is equally or even more critical as a sustainable and additive business model, technology, a global presence, a strong balance sheet, or physical assets. In boom times or busts, in calm or calamity, great leadership is the foundation of all great companies without regard to the economic environment.
By tapping into the collective wisdom of an unparalleled group of highly accomplished and experienced experts, men and women who have proven their credentials as leaders of thought and action in the global marketplace, we soon realized that we were in a unique position. We had the opportunity, and even the responsibility, to convey to a larger audience the essence of what these leaders told us about what they believe, what they have found to be of value, what lessons they have learned and put into practice—lessons that prove their effectiveness through growth, profitability and enhancement of shareholder value.
In offering this anthology of collective wisdom, we tried to preserve as much as possible the flavor and tone as well as the substance of what they told us. While it was necessary to create a consistency of style and format throughout all these interviews and written essays, we kept changes limited to only those required to clarify the original intent of the sources.
That said, it is clear that the enduring value of this book is in the words of the people who are highlighted on the following pages, and we would like to express our deepest gratitude for their generosity of time and talent, their eloquence and their openness. Their willingness to teach others by sharing—in many instances their failures—is unquestionably a characteristic of a true leader. The honesty of these leaders will no doubt resonate with other leaders who are facing the same kinds of challenges as they too grapple with the weighty issues of leadership and management in today’s unsettling marketplace.
We also want to acknowledge the invaluable contributions of our colleagues and leaders at Heidrick & Struggles International, Inc., for providing a framework and the resources that have enabled us to bring forth this human capital story. As the pioneer in executive search, and today, the premier firm in the recruiting industry, Heidrick & Struggles is a living testament to the value of the human equation in the world of business. By providing strategic counsel to corporate leaders on the matters of governance, leadership and human capital, and often serving as intermediaries in the talent search, assessment and negotiating process, our global partnership of executive search consultants has been helping clients build thriving, high-performance management teams worldwide for half a century. We continue to learn and our clients continue to benefit from the remarkable experience and knowledge of Heidrick & Struggles’ consultants who lead the way in the ongoing evolution of talent supply and demand.
In particular, we would like to extend special acknowledgement to the consultants who provided introductions to many of the leaders featured in this book: Alice Au, Don Biskin, Peter Breen, Barry Bregman, Pepper de Callier, Lauren Doliva, Michael Flagg, Bob Hallagan, Lee Hanson, Ted Jadick, Randy Jayne, Dale Jones, Eric Joseph, Evan Lindsay, Jory Marino, Jürgen Mülder, Nancy Nichols, Madelaine Pfau, John de Regt, Gerry Roche, Jeff Sanders, John Thompson, Dora Vell, and Kyung Yoon.
We appreciate the foresight of John Strackhouse, who encouraged us to believe that this book would be a useful reference to many corporate leaders and MBA students, and to John Gardner, who not only shared that sentiment but also introduced us to the editors at Oxford University Press.
We thank our editor at Oxford Press, Martha Cooley, her editorial team and the team of academic reviewers for believing in this book and for guiding us through the entire process. For making this book make sense, we thank Billie Brown, who served as our outside counsel and sounding board and offered objective feedback as well as invaluable editing and proofreading services. We extend a special thanks to Jay Conger for framing our ideas as well as this book.
Finally, we are grateful for our firm’s chief executives who encourage us by giving their unwavering support and leadership guidance, in particular, Piers Marmion, CEO; David Anderson, COO; and John Gardner, one of our firm’s Vice Chairman. It is largely through their unceasing emphasis on partnership and quality as the cornerstones of Heidrick & Struggles’ values that empower us to embark on these initiatives.
To them and to all our colleagues around the globe, we offer our heartfelt thanks as we close with our firm’s guiding principle:
“The Heidrick & Struggles partnership spirit creates an environment of mutual trust and respect in which all our employees are valued. We place the interests of our clients, the firm, and colleagues above our own.”
Meredith D. Ashby and Stephen A. Miles
The Book
Overview
Inside the Bookcover
Foreword
Preface
Excerpts
Chapter 1 - Leadership
Chapter 2 - Managing Human Capital
Chapter 3 - Competitive Advantage
Chapter 4 - Strategic Change
Chapter 5 - The Stakeholder's View
Prologue
List of Featured Executives
Executive & Company Bios
Fast Facts
About the Editors
Contact the Editors