Dear CEO

9 September, 2017

Dear CEO,

Now more than ever in our history we need you to lead.

Frankly, with all due respect, what you have been serving up as “leadership” since the 1970’s has not been good enough. There have been some bona fide exceptions—Marc Benioff, Indra Nooyi, Oprah Winfrey and Nick Meriggioli come to mind—but much of the so-called leadership emanating from CEOs has been downright dreadful. It is time to hit the reset button. Let us first start with the facts and conclude with several reflections for change.

First, ask yourself if your employees—the ones carrying out your strategy—actually care about your organization, their role or even the customers they serve. It matters not what firm does the surveying, employee satisfaction remains anemic. It has been like this for decades. Gallup, for example, indicates global levels of employee engagement continues to hover around 13 percent. When upwards of 90 percent of your employees are not proud of where they work it does nothing for your brand. When these employees interact with a customer, imagine the residual after effects if the exchange is unprofessional. Rest assured there is virtually no chance for your employees to go above and beyond the call of duty if they remain disengaged or worse, disenfranchised. Furthermore, have you considered the infighting that rages across your departments due your corporate culture calamity?

Second, have you ever wondered aloud why you are in business in the first place? As the planet simultaneously melts and heats up, as the gap between the haves and have-nots increases, as business teeters “on the brink of distrust,” have you thought about your organization’s purpose? Perhaps you believe the only purpose of a business is to grow revenue and profits or to increase shareholder return. If so, may I suggest a rethink? As management guru and Thinkers50 winner Peter Drucker once wrote, “The purpose of business is to create and keep a customer.” Research suggests a purpose-driven organization ends up not only improving its financial results, but employee engagement, retention and customer satisfaction in addition to shareholder return. This is on top of improving the welfare of our communities and planet. Sadly there only a few purpose-driven organizations to look up to. The likes of Patagonia, Fairphone and LSTN are exemplary role models.

Third, our organizations are quickly becoming hives of inordinate stress. Wherever you look on the org chart, people are mentally and physically breaking down. According to the World Health Organization, workplace stress will become the “health epidemic of the 21st century.” As a result of the omnipresent “do more with less” mindset in the workplace—where employees feel excessive pressure to complete tasks, meet targets and innovate with shorter deadlines, less investment and distracted colleagues—employees are suffocating. There is no time to reflect, to dream. Pausing to think is frowned upon. Consequently the entire organization is in action overdrive. The “do more with less” mindset is resulting in a frenetic operating culture that has effectively squashed both creative and critical thinking. When your organization does not have the time to reflect—when employees spend all of their time in a feverish quest to get things done—mistakes are made, learning is missed, new ideas are squandered and the stress mounts. To be blunt, it is unsustainable.

What to do?

You must start by analyzing your corporate culture. Do employees collaborate? Are they fearful? Do fiefdoms run rampant between business units, departments and teams? Does your organization innately connect with others first and consider options before making a decision and executing? By analyzing the current state of your organization’s culture you are taking stock of how things are actually working. Get real. Get out of your office. Get personable. Once the results are digested, develop a cross-functional team that will work with employees across the organization to create and then implement a new leadership philosophy. Define your behaviours as well as organizational disciplines and attributes. This becomes the bedrock of your culture. Spend as long as it takes to enact the new philosophy. Rest assured it will take a while, but failing to make it a priority will leave you caricatured as an ATNA: all talk to action.

In parallel to redefining your organization’s internal behaviours, you must redefine its purpose. Why are you in business? Craft an organizational declaration of purpose, a pithy, thoughtful statement that outlines who you serve and how you uphold meaning as you conduct business. Then shift the way you do business. Your purpose is to serve all stakeholders not simply shareholders or profit seekers. You are a part of the community and our planet. By virtue of that circumstance your purpose is about more than money, more than the stock market. Your purpose is to ethically create and keep a customer, serving all stakeholders equally in the process. Unilever and the work of its CEO, Paul Polman, is one to admire.

To complement a more collaborative culture with your organization’s higher purpose you must simultaneously introduce an open thinking mindset. The first step is to start discussing with your direct and skip-level reports the importance of time. Time is the enemy of open thinking. When senior level executives embody an attitude of “do more with less” they typically create environments where there is no time. Teach them to give it back, both to themselves and those they lead. Teach them to block time off in their calendars to think. Not every minute of every day has to be in a meeting. Further, have open conversations about workload and perfection. If time is the enemy of open thinking, overburdened to-do lists and quests for flawlessness are rampant viruses.

One final idea. It has to do with compensation, the white elephant in the CEOs corner office. First, sit down with those on your compensation and benefits team to immediately fix any and all gender pay discrepancies. There is no place in the modern world for such egregious paycheque disparities. Second, to pay for righting the historical wrong, analyze the compensation levels of you and your direct reports. If the compensation ratio between you and the average employee is more than 100 times, scale it back. If it is more than 25 times for your direct reports, consider scaling their pay packages back, too. Imagine the goodwill you will have created inside and outside your organization.

In summary, if you commit to these four recommendations there is no doubt in my mind your organization and its employees will benefit, customers will be delighted and all stakeholders will be rewarded. Moreover there will be a boon to communities and the planet.

The question that remains is as follows: do you have it in your heart, head and soul to change the way you lead? Remember, each of us are all flaws in progress.

Thank you for reading.

Sincerely,

Dan Pontefract

Author of THE PURPOSE EFFECT and FLAT ARMY
www.danpontefract.com or @dpontefract

Thinkers50’s collection of 50 letters to the CEOs of the world from the world’s leading management thinkers, Dear CEO, is published by Bloomsbury and now available.