The risk of sustained stagflation, using metaphor in your leadership, and switching between opposing behaviors to become an ambidextrous leader were among the latest ideas shared on day one of IMD’s Orchestrating Winning Performance liVe program.
The risk of sustained stagflation
The economic volatility of 2022 has underscored that making predictions about the future macro-economic scenario is a highly uncertain art.
In his session on The macro-economic outlook – post-COVID, post-Ukraine and beyond, Professor Ralf Boscheck explained how the war in Ukraine has complicated the economic outlook, with global opinion leaders from Paul Krugman to Ben Bernanke offering a “potpourri of conflicting projections and views” that has stoked confusion about the best policy response.
Yet a lack of co-ordinated economic stimulation following the COVID-19 pandemic has triggered an inflationary crisis that risks heightening political tensions within and across countries, and undermining the development options for emerging markets, said Boscheck.
“The question is what will that mean for your economy, your sector and your business operation?” he said, concluding that business leaders should consider the following four questions in the case of sustained stagflation:
- Would your markets significantly change?
- What would be the most likely policy responses? How would they affect your markets and sector?
- Will operations have to be adjusted and competition change?
- Would you have to change key parts of your strategy and business model?
Making sense of the world through metaphor
Metaphors frame issues and therefore play a significant role in shaping and directing attention by highlighting certain aspects and hiding others, said Professors Heather Cairns-Lee and Albrecht Enders in their session on Metaphors, we live, love and lead by.
Consider the implications around common metaphors found in leadership, which often focus on construction, commanding, gardening and navigating, the professors said. A military metaphor emphasizes the idea of winning, but hides the idea of co-operation, since the role of a military leader is to command, and the role of the group is to obey.
The benefit of metaphors is that they can make communication “sticky” by painting a vibrant and memorable image that can help people understand unfamiliar, abstract and complex issues by building a bridge to familiar experiences, said Enders.
As human beings we use between four and six metaphors per minute, said Cairns-Lee. But because they frame issues in a certain way, there is also a risk that they can be misleading and create a false sense of understanding that can be used for propaganda, she added.
To overcome this, leaders should pay attention to the implicit frame suggested by their choice of metaphor and the resonance it may have with their audience, Cairns-Lee and Enders said.
How and when to engage others in decisions
Professor of Strategy Arnaud Chevallier also invoked metaphor during his virtual session When should you go against your decision-making style?
Leaders should deploy different layers of stakeholder involvement when making decisions, depending on the importance of including other voices and the level of risk involved, he told OWP liVe participants.
“You cannot have one size that fits all,” Professor Chevallier said. “You need to be a Swiss Army knife,” he continued. “Depending on the type of decision you are facing and the type of culture you are in, you use one blade or another.”
Chevallier said that, for low-risk decisions where stakeholder engagement might not be necessary, it might be sensible to considering acting alone. However, if the failure to include stakeholders might have negative consequences and there were greater risks involved in any outcome, it would be worth considering various stages of engagement, from listening to other perspectives to empowering stakeholders with a vote or even a veto.
Becoming an ambidextrous leader
Top executives need to have the ability to transform existing businesses, while at the same time making sure they have the right business model to take the organization into the future, said Katharina Lange, an Affiliate Professor of Leadership at IMD in her session on Leading for the present and the future.
She highlighted five different core skills: leading strategy, execution, people, stakeholders and self, with each capability having two dimensions: one for the present and one for the future.
The challenge for many executives is that these leadership behaviors are often opposing and contradictory, said Lange. For example, when leading strategy executives need to be transformers who question the status quo and seek to create new growth opportunities, while at the same time they need to be operators who can effectively spot and take advantage of short-term opportunities.
Times of great ambiguity and uncertainty call for great enterprise leaders who are able to anticipate the future and translate it back into what this means for the present, said Lange.
“That’s the great dichotomy they can bridge in their persona. They can – at the same time – think around and anticipate the strategic moves and make sure they are translated into executable realities for the teams that are operating today,” she said.