vice chairman and co-leader, board & ceo services
This Week in Leadership
5 Ways to Avoid Job-Search Exhaustion
Sure, the job market has picked up, but all searches are time-consuming. Experts weigh in on how not to run out of steam.
One is an old-school investor who favors value brands and invests only in businesses he understands. The other is a futurist behind some of the most well-known tech companies in the world and wants to privatize space travel. The former is the richest men in the world in part because of a risk-averse investment philosophy. The latter is one of the richest men in the world in part through a high tolerance for risk. One is considered an oracle. The other is considered a visionary. One is Warren Buffett, the boss of Berkshire Hathaway. The other is Elon Musk, the CEO of automaker Tesla.
Buffett once described his strategy as looking for “economic castles protected by unbreachable moats," measurable competitive advantages that give an organization a layer of security against encroachers. But during an analyst call, Musk took a jab at the widely-praised Buffett, criticizing the moat concept. "If your only defense against invading armies is a moat, you will not last long," he said. Buffett's retort: "There are pretty good moats around."
For corporate leaders, of course, the debate involves more than just words, it centers on a key strategic approach. Ultimately, experts say, they both may be right.
“In today’s marketplace, the competitive landscape is changing so fast that leading requires a platform of innovation,” says Tierney Remick, vice chairman and co-leader for Board and CEO Services with Korn Ferry. “For some that could mean innovating around their core and being as productive as possible. For others, that could mean moving into new areas and creating the agility to meet new market demands.” Or, as Buffett also said in response to Musk’s dig, “Elon may turn things upside down in some areas. I don’t think he’d want to take us on in candy.” Berkshire Hathaway’s stake in See’s Candies is among Buffett’s longest-held and most profitable investments. Musk promptly shot back in a tweet that he was going to start a candy business and surround it with a moat filled with candy.
More telling than Buffett and Musk’s jabs, however, is what they reveal about their leadership styles. “Musk is driving a level of innovation because that is what he founded his companies on, he can miss earnings and be OK with that,” Remick says. “That’s a completely different business model than a traditional CEO who has to hit quarterly numbers, which is where a moat strategy that keeps things moving with focus and manages costs versus innovation comes into play.”
Both approaches have their virtues. Both approaches can be successful. Most importantly, experts say, both approaches are needed to maintain the level of agility and productivity the market demands. "It takes a highly complex persona who can conduct the corporate orchestra to push the boundaries of value creation," says Chad Astmann, co-head and global sector leader of Korn Ferry's Asset Management and Alternative Investments practice. "Increasingly, this is simply a necessary element of business survival rather than the product of a rare 'unicorn.'"
Importantly, leaders have to bring in other people to build the moats, innovate, or both. "The companies that are innovative have two key ingredients: They attract and retain highly creative people and they ensure their leaders know how to effectively manage these creative people" says Jamen Graves, a senior client partner with Korn Ferry specializing in leadership development. "When these two ingredients work well together, then innovation gets into the company DNA, its core processes, its culture, and endures from one generation of leaders to the next."