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The Adaptive CEO

Meet "Raj", CEO of a major multinational pharmaceuticals company

In our thousands of engagements with global CEOs, we have met many commanding personalities: leaders who take charge of encounters, seeking to steer events towards a well-defined goal. Raj was different. Instead of setting out all the issues and proposing a way forward from the start of our relationship, he listened. Raj was an active listener: He asked precise questions, sought clarity, and maintained a high degree of intelligent focus that would have been daunting, had it not been balanced by a warm and empathic manner.

This was in marked contrast to hyperconfident, domineering Mike, whose shoes Raj had recently filled as CEO of a major multinational pharmaceuticals company. Indeed, when Raj was tapped for the position, he was hesitant to take it up. A company veteran, having successfully led its largest division for a number of years, his reticence was not borne from lack of competence. Instead, Raj was concerned that he might be expected to act more like Mike: an inflexible leader who could not open himself to alternative perspectives. After a period of reflection, however, Raj realized that with courage and conviction, he could accept the position – and reinvent it in accordance with his own instincts. Staying true to himself, Raj embraced an adaptive style that allowed him to lead with personal authenticity.

Adaptive leadership in troubled times

In periods of stability, problems are often predictable and quickly comprehensible, solved by recourse to an established playbook: Leaders need only exercise their familiar expertise and authority. In an unstable environment, however, individuals and organizations are faced with novel crises, demanding fresh strategies and new skills. Leaders are then tempted to jump in with the promise of a “fix,” instead of taking time to listen, absorb the complexity of the situation, and learn.

This is where the concept of “adaptive leadership” comes in. The concept is drawn from evolutionary theory: With businesses, as with biological organisms, successful adaptations enable a system to survive in tough new environments. Adaptation is also an iterative process of observation and experimentation, finding and refining new ways to thrive. The adaptive leader’s task is to mobilize people in this process. A key evolutionary concept is diversity: One must be prepared to engage with a variety of approaches, persisting even though some may fail. In an organization, this means building a culture that seeks out diverse views within and beyond the company – what we call distributed or collective intelligence.

For Raj, such ideas were transformative, immediately chiming with his own preferences and abilities. “I learned about adaptiveness just in time for me, the company and the environment we are in,” Raj reflects, with his characteristic self-awareness. “It showed me a path forward.”

This meant throwing out the idea that the CEO is a visionary whose job is to galvanize the organization according to a fixed plan. Instead, Raj stepped into the role with a creative and humble spirit, a listening and learning mindset, and a willingness to take calculated risks through informed experimentation. These insights would prove especially powerful when the pharmaceutical industry found itself at the forefront of the battle against COVID-19.

Listen and learn – and evolve

Raj realized that he needed to be attentive, closely observing his company’s ecosystem and hearing many opinions, before making high-stakes decisions. When he took action, he did so boldly, with a disruption of the executive team’s siloed operating dynamics. Previously, each executive had been left to reign over their unit, with little interaction with their colleagues – a symptom of Mike’s top-down leadership strategy. Raj revived teamwork, encouraging a collaborative and open-minded disposition to permeate the whole executive. “Resolving new problems calls for commitment to grasping complexity,” Raj reflected, “which requires drawing on multiple perspectives. To understand and learn, we have to connect with one another much more closely.” This shift by no means undermined individual commitments and accountability, which were enhanced to include collective accountability and care.

For the adaptive leader, fostering these connections is crucial, not only in diagnosing problems, but in galvanizing the organization to transform in response. People do not change readily – fearing not so much change itself, but potential loss. In order to move forward, they must feel that their views and values are honored. This relational approach reinforces trust and expands the awareness and understanding of all involved: Listening leads to learning. As Alexander Grashow, author and adaptive leadership theorist, has remarked, “If there’s one secret to a good partnership, collaboration, relationship, it’s this: Be in dialogue, not monologue. Most of us spend our entire lives in monologue.” Unfortunately, for many CEOs, this behavior becomes a habit.

Guided by productive conversations throughout the company, Raj made other significant changes to the company’s business model: He introduced expanded access to medication, with capped prices in poorer regions; more transparency regarding clinical trial data; and wider collaboration with stakeholders to tackle global healthcare challenges.

While adaptive leadership requires commitment to this kind of innovation, it equally involves understanding what should not change. As Ronald Heifetz and Marty Linsky put it, “sustainable, transformative change is more evolutionary than revolutionary.” This means identifying and tapping into the power of existing institutional values, culture, knowledge and skills.

One such asset, Raj saw, was the company’s wealth of patient data. Attentive leaders also know how to “listen” to the data, understanding the value of constant information gathering and analysis. With the coming of COVID-19, digital insights allowed executives to take swift action to secure vulnerable global supply chains. To remain agile in response to the pandemic’s impact on markets, Raj increased the regularity of operational forecasts. This allowed the firm to understand the efficacy of the organization’s strategies, keep an eye on emerging changes in patient behavior, and predict opportunities for growth. For example, with a greater demand for self-care, the company was able to capitalize on its traditional strengths in remedies such as pain relievers and dietary supplements, as well as new products like rapid test kits.

The company was also able to pivot rapidly to a remote-work model for the vast majority of its workforce during lockdown – an experiment that has turned out to be advantageous, streamlining many processes. Through ongoing discussions and surveys, the organization has continued to communicate with every employee, ensuring their safety and comfort through the crisis. In further collaborative and distributive moves, the company has partnered with hospitals and charities throughout its global areas of operation to ensure supplies of essential healthcare products, and is working with other companies on COVID-19 vaccine development.

Embracing adaptive leadership can be difficult. Most of us have deeply ingrained tendencies to stick with what is familiar and safe – to use readily accessible information instead of stretching into the unknown, to substitute easy questions for difficult ones, and to resist criticism. We feel safer treating novel problems in familiar ways, instead of working with them in all of their complexity. These entrenched biases may get us through times of stability, but as we enter an era defined by rapid change, it is adaptive leadership of the kind that Raj exemplifies – self-aware, relational, collective, always learning – that will take us forward in an uncertain new world.
 


 

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