The Center’s research agenda is focused on generating practical and useable knowledge on issues that are key to effective Higher Ambition leadership. Three research initiatives were spotlighted at the 2015 Higher Ambition CEO Summit:
- Higher Ambition Boards of Directors
- Linking Purpose and Profit
- Managing for the Short and Long Term
Higher Ambition Boards of Directors
Ed Ludwig, former chairman of the board at BD, shared the results of the first phase of a multi-year initiative that examines the role of boards of directors in supporting and sustaining the success of Higher Ambition institutions for the long term. Based on the results of interviews with the CEOs and boards of 14 companies, Ludwig maintained that “Higher Ambition CEOs need Higher Ambition boards.” The summary of the team’s initial work is available in a CHL White Paper: Higher Ambition CEOs Need Higher Ambition Boards.
He suggested that CEOs are well advised to not just implicitly assume that their boards are committed to a Higher Ambition approach. They should encourage an explicit board discussion of what it means to be a Higher Ambition company and board. As Ludwig explained, Higher Ambition boards that explicitly see their role as stewards of the company’s future are more fully equipped to keep a company steady through market and management challenges, while explicitly keeping it on track to doing well by doing good. Higher Ambition CEOs need boards that are alert and committed to the alignment of corporate culture and practices with espoused values, as well as the development and succession of next-generation leaders and the CEO. They select new board members with a careful eye toward candidates’ support of the firm’s Higher Ambition purpose and values. The best boards are committed and open to transparent self-assessment to ensure that all members are contributing to the board’s effectiveness.
Ludwig and his colleagues have developed a diagnostic that allows a Higher Ambition CEO and Board to explicitly discuss the Board’s level of development in enacting its role as a steward of the company’s long term Higher Ambition aspirations. In addition, CHL will host a peer exchange workshop later this year that will allow Higher Ambition CEO/Chair teams to both contribute to and learn from their shared experiences. Participants will leave the session with specific ideas, tools and practices which can help make their boards more effective in supporting the Higher Ambition goals of their respective firms. If you have interest in learning more, or participating in this initiative, please contact Russ Eisenstat at firstname.lastname@example.org.
Linking Purpose and Profit
Harvard Business School’s Rebecca Henderson presented ongoing research making the link between purpose and profit. Her central thesis is that productivity improvements are linked to the adoption of well-known management best practices and that, in turn, adoption of those practices is dependent upon employee engagement. She noted that the initial connection is quite clear: commitment to best practices in areas such as continuous improvement, teamwork, accountability have been shown to increase performance.
The more interesting question, she posited, is why all companies don’t, or can’t, adopt these proven practices. Her preliminary research indicates that there is are pre-conditions for success with these practices: trust, engagement, and the willingness to put the group before oneself. Those derive from a deep sense of purpose, finding meaning in one’s work, and shared values. This would indicate that Higher Ambition strategies are a key component of sustained superior performance.
Another barrier is the need to invest in distinctive capabilities and cultural characteristics over the long-term. Henderson explained that it can be tempting for a company seeking performance improvement to cut training and other investments in those capabilities. However this often leads to a “better before worse” performance curve. The alternative, “worse before better,” can be daunting. “Doubling down on engagement and culture takes time and effort. Investment takes time to pay off,” she said. This is one reason why a commitment to shared purpose and values is so important—to encourage leaders and associates to do the right thing to optimize the long term health and success of the enterprise, even if it requires a short term cost.
This project is ongoing.
Managing for the Short and Long Term
David Langstaff and Katherine Isaacs presented a proposal for a research initiative to examine how investor and market pressures support or inhibit the efforts of Higher Ambition CEOs to deliver sustainable high performance both short and long term. According to the brief, too much attention to short-term performance can direct attention away from investing to build intangible assets essential to long-term value creation such as “high trust, high commitment relationships with key stakeholders, and a set of distinctive capabilities and cultural strengths.” Langstaff and Isaacs will conduct in depth interviews with company executives, and long term institutional investors to identify how Higher Ambition companies can most effectively optimize their performance both short and long term, as well as effectively communicate their strategies to investors.
In addition to white papers and articles summarizing key results, the project will develop a “best practice” tool kit, and documented best practice case examples, that support companies and investors in better addressing this issue. It will also highlight high leverage areas for larger systemic change. If you have interest in learning more, or participating in this initiative, please contact. Russ Eisenstat at email@example.com.