We are in times, where leadership matters more, but investments into leadership slowly become uninvestable – unless it leaves the category. The world is now fast-paced and unpredictable. Trump is only one factor – and sometimes he seems like the scapegoat in a world that – independently of him – became more fragile. National economies anywhere are barely growing; even if they show growth trends you have to redact political-statistical “beautification” and/or risk-adjust overvalued segments in AI and defense.
“What is the next crisis, and how do I survive it?” This is perhaps the number one question German CEOs express in one way or the other, when I talk to them. Many – from within – know that better leadership would equip them better at facing unpredictable storms. Some admit it. Few invest. Why is that the case? In the case of Germany – the number 1 subject for many is: how do I survive the next 3 years? There is “hope” for political reforms; until they arrive, you have to survive. Then there is the general technological disruption: if you have limited money to invest, where do you put it? First into change leadership? Or first into a technological race to catch up – whether it is automation or AI initiatives. At least in the consulting sector the answer is clear: AI and automation promise not only more efficiency but also internal transformation – thus they are the default category for any remaining budget. In fact, AI is the major growth factor for the German consulting industry – while the categories, in which change leadership and organizational transformation fall, are shrinking. Unless you replace all employees, any AI initiative without strong leadership and culture is half-baked. Long story short: there is a unique niche nobody is properly serving out of one hand; Mittelstand CEOs need an agile offering that nobody is properly offering.
First, the perhaps most important point, CEOs must understand and get a crystal clear picture of extremely dynamic but somehow predictable global trends and how these trends impact their entire business model. AI is only the most obvious trend. The world and thereby the global economy is fragmenting. The national economies of global customers are not as predictable as they seem to be. Geopolitics is another topic nobody really wants to deal with. Demographic trends are already felt, but 5-20 years into the future? Mostly ignored or disregarded. While AI is one thing; what are the countless other exponential technological trends? How is AI accelerating these technologies? Most CEOs won’t even know what I’m talking about. To conclude this first point only, it is a deep analysis and understanding of all these trends that are already and are going to impact their current business model, their product offerings, and their current customers. If there is no clear understanding, there is no vision, no strategy. And if there is one, it is worthless.
The second thing CEOs need, is still not general change leadership. It is now an answer to the analysis in the first step. How exactly do you position yourself, the company, the business model for the future. This is – for most – not a question to be answered in 2 or 3 years. Then it will be too late. It is a deep question, CEOs should take time off from daily business and really think about it. A visionary CEO, who is also a majority owner or has the support of his/her shareholders should also make – right there – a decision.
But it must not be a decision the CEO must make on his own. His leadership team is probably not stupid. But is he clear who he can do it with? Who can help him make that decision? This is a transformational process, and in this third step, perhaps, is where elements of change leadership – or the least external advisors – can become valuable. Who are the people one can build on, to transform the business, to weather the storm of a very volatile yet somehow broadly predictable future?
Whether he has the vision and intuition to make a bold prediction and strategic choice on his own – or he gathers his leadership team to do so, the next steps are pure transformation. The question is how: Is the CEO the ruthless Elon Musk or Dan Peña type? Or is the CEO the culture-centered Yvon Chouinard or Bruce Poon Tip type? How ruthless do you want to be, to make that vision, that strategy a reality?
The Elon Musk type, the extrovert, or any CEO looking at a potential insolvency, must start with ruthless measures. It won’t be the traditional change management playbook. It will be fire based on performance, fire based on gut feeling. Then have a core team that gives everything to make that new strategy and vision a reality. If a CEO cannot do this, perhaps he better step down and if he’s an owner, look to sell or find somebody else to do it.
The second type, the Chouinard type, or any CEO with both: a budget and the key trait of being a friend of mankind can and should start here with real commitment and a trusted change leadership framework, such as Growth River. To use the existing team, the united genius within it, to do the same the first type of leader will do: to make that vision, that new strategy a reality.
Only now, after you define a strategy, a vision. And kickstarted a new type of culture within the company, does it make sense to start investing into AI initiatives or anything else.
