Senior Client Partner, Sector Leader, Professional Services
This Week in Leadership
$80 a Barrel. Now What?
Switch suppliers? Eat the cost? Or shut down some operations? With energy costs soaring, leaders face some unappealing options.
Over the coming weeks, there will be hundreds of think pieces about the track record of Germany’s outgoing chancellor, Angela Merkel. But for leaders in the private sector, probably the most impressive takeaway is pretty simple: the length of that track record.
When it’s all said and done, Merkel, who has announced she is stepping aside and won’t be in the German election this weekend, will have spent more than 16 years at the top of the country’s leadership totem pole. Indeed, only about 10% of the CEOs in the Russell 3000 index were in their positions when Merkel took office. At the same time, the average CEO tenure is less than seven years, a decline of 14% since 2016, according to Korn Ferry. Leaders in the future might not even get that long. “In a world where we constantly need new skills and approaches, I think that tenure at the top will continue to shrink,” says Juan Pablo González, a Korn Ferry senior client partner and sector leader of the firm’s Professional Services practice.
Merkel established a particular leadership style and culture immediately, something experts say is similarly essential for any incoming CEO. Having the right culture at the right time and with the right people can elude many companies. In Merkel’s case, she consistently kept her ego in check and exhibited a servant leadership style, says Richenda Broadbent, a Korn Ferry associate client partner.
Leadership experts say Merkel also displayed certain qualities that successful private-sector leaders also should have. “Her biggest strength is her ability to look at complex phenomena from the perspective of a detached and objective observer and then to infer solutions from that,” says Eric Wenzel, a Korn Ferry senior client partner based in Germany. Indeed, consider the “Pause Principle”: how stepping back can help leaders move their organizations forward.
Merkel also balanced Germany’s short-term challenges, such as the financial crisis and a massive influx of refugees from the Middle East, while advocating for investment in long-term projects such as moving away from fossil fuels. And while she had a clear vision, she was willing to adapt to different methods to accomplish it, says Jaime Maxwell-Grant, a Korn Ferry senior client partner. “She was open to changing throughout her life if it did not get in the way of her values or vision,” he says.
At a basic level, Merkel’s proponents say, leaders like her are able to outline a strategy, motivate others to embrace the strategy, and put the systems in place to help everyone successfully implement the change. “That’s the magic formula for getting change to happen and getting it to stick,” says Jane Stevenson, global leader of the CEO Succession practice and vice chair of the Board and CEO Services practice at Korn Ferry.
Still, experts say that while these qualities might have been sufficient for Merkel or any existing CEO, they aren’t enough to ensure success now. Future CEOs will need to be able to seize on uncertainty and disruption as opportunities to make huge changes. They also will have to embrace diversity, welcoming people and ideas from different backgrounds. And they’ll have to balance the needs of a multitude of stakeholders instead of prioritizing just one group (voters, in Merkel’s case, or investors, for a CEO). “The most effective CEOs and the highest-performing companies will possess a completely different mindset,” says Evelyn Orr, chief operating officer of the Korn Ferry Institute.