Building Ethics Builds Your Business

In cartoons, people with an ethical dilemma have little advisors pop up on their shoulders: one good and one bad. It’s not that easy in business. Society no longer has just one ethical framework. There are dozens, so which do you choose?

Greg Moran, Executive-in-Residence, Former Sr. Executive at Ford, Chase, Nationwide, and more, says choosing your organization’s principles is the first thing to do when launching a business—even before you create your pitch deck! From Enron to OpenAI, Greg reviews the vagaries of business ethics…and how you can navigate through them.

About a month ago, I ended up sitting at the bar in a ramen place while Apple replaced the battery in my iPhone. It is a singular thing these days to be unexpectedly cut off from the world for 90 minutes, so the ramen lunch was simply the best way I could come up with to spend an hour without spending a lot of money (I was at a mall). I was the only one at the bar, so the bartender started chatting with me. He asked what I did, and when he learned that I did advisory work, he asked me what the most important advice I could give on leadership might be. Without giving it much thought, I said, “Have a clear ethical framework that you adhere to, and within that, be nice. ˮ I have thought about it a lot since and decided that my intuition was right, and I would not change my answer.

Ethical conduct is not merely a choice but a foundational element that underpins the long-term viability and positive impact of people and organizations. Ethical leadership, accountability, fairness, transparency, and lawfulness are essential in shaping a culture of trust and respect within businesses.

Case studies such as the Wells Fargo fake accounts scandal, the Volkswagen emissions scandal, and the Purdue Pharma controversy vividly illustrate the substantial costs and repercussions of unethical behavior in the corporate world. These consequences encompassed the erosion of consumer trust, legal ramifications, reputational damage, and adverse effects on society at large. There are also personal ramifications of ethical failures, including financial penalties, legal entanglements, loss of trust, and enduring impacts on one’s personal legacy.

There are various ethical frameworks like Utilitarianism, Kantian Ethics, Virtue Ethics, Judeo-Christian Ethics, and Stakeholder Theory. These frameworks can serve as guiding principles for ethical decision-making, emphasizing the importance of aligning actions with moral values and considering the broader impact on stakeholders and society. Integrating key ethical principles such as integrity, accountability, fairness, transparency, and respect into professional conduct is essential for navigating ethical dilemmas and fostering a culture of integrity within organizations.

While not exhaustive, these vital ethical principles in business help shape organizational conduct and foster a positive culture:

Integrity

Definition: Integrity entails being truthful, fair, and adhering to moral and ethical principles in all actions and decisions.

Importance: Integrity involves consistently aligning words with actions, even without oversight, to build trust and inspire excellence within the organization.

Application: Demonstrating integrity involves honoring commitments, telling the truth, following through on promises to customers, addressing employee concerns sincerely, and conducting operations transparently.

Accountability

Definition: Accountability refers to accepting responsibility for one’s actions and decisions, including the outcomes and consequences that ensue.

Importance: Accountability cultivates a culture of trust and respect within the organization, assuring stakeholders that individuals and the organization will stand behind their actions.

Application: Businesses showcase accountability by acknowledging and addressing mistakes and learning from them rather than concealing or ignoring errors when they occur.

Fairness

Definition: Fairness involves objectively balancing competing interests and making just, equitable, and impartial judgments and decisions.

Importance: Fairness ensures that all stakeholders are treated equally, without discrimination or favoritism, in terms of opportunities, rewards, and penalties.

Application: Practicing fairness entails establishing transparent criteria for hiring, promotions, and rewards, conducting business dealings openly and equitably, and avoiding bias in decision-making processes.

Transparency

Definition: Transparency denotes the openness and clarity with which a company conducts its business operations, sharing relevant information in a straightforward and accessible manner.

Importance: Transparency builds trust by enabling stakeholders to make informed decisions and judgments about the organization, signaling a commitment to ethical standards.

Application: Businesses can promote transparency by consistently sharing critical business information with stakeholders, maintaining predictable practices for information disclosure, and ensuring accessibility of information.

Lawfulness

Definition: Lawfulness involves compliance with legal and regulatory obligations and adhering to laws and regulations without seeking loopholes or compromising ethical standards.

Importance: Law-abiding behavior ensures that employees are not placed in ethically compromising situations and that the organization operates within the bounds of the law.

Application: Upholding lawfulness requires investing in understanding relevant laws, regulations, and regulatory agencies, establishing frameworks for compliance, and monitoring adherence to legal requirements.

Respect

Definition: Respect in a business context entails valuing the contributions of all individuals associated with the organization, including employees, customers, and communities.

Importance: Respect fosters an inclusive environment that embraces diversity, encourages open communication, and nurtures mutual respect among stakeholders.

Application: Demonstrating respect involves creating inclusive workplaces, engaging with community stakeholders meaningfully, welcoming diversity, and ensuring products and services benefit a broad range of customers.

By integrating these principles into the professional ethos, individuals and organizations can navigate ethical challenges effectively, uphold integrity, and build a reputation based on values and principles.

Ethical behavior is not just a moral imperative but a strategic necessity for businesses seeking sustained success. Aspiring leaders should internalize ethical values and commit to developing and upholding a clear ethical framework in their professional endeavors. By cultivating ethical cultures and adhering to core ethical principles, businesses can not only mitigate the risks associated with unethical conduct but also contribute positively to society, enhance their long-term prospects, and safeguard their reputation in an increasingly interconnected and demanding business landscape.

 

This article was written by Greg Moran as a companion to our podcast episode Forming Your Firm’s Ethics.

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Discover the Wealth of Your Team’s Talent

Would you like to be valued for being you rather than for being your job description?

That’s a personal benefit of working in a skills-based organization. For the company, that kind of recognition brings better engagement, more productivity, and increased innovation.

A skills-based orientation goes beyond job titles and descriptions. Instead, it assesses the talents of everyone, from the front line to the back office, and then assigns people to projects that best suit their unique combination of skills.

Brian Richardson helps organizations enter this skills-based world. The founder and CEO of Richardson Consulting Group, Inc. shared the following steps and tips as a guest on our podcast. They can help you plan your move to fully realize your team’s talents.

1. Start with your own leadership mindset: it’s time to experiment.

As with anything new, expect stumbles and outright failures. More importantly, let your team know to expect them…and that they’re okay. One primary reason innovation and change stagnate is fear of failure; far too often, employees expect to be punished if they fail, so stop taking risks. Let your team know some failures are expected; it’s okay if you then look at the data and learn from your implementation experiment. At the Innovative Leadership Institute, we call this leadership trait “the mind of a scientist.”

2. Assess individual talents on your team.

Determine each person’s skills; without this step, you’ll obviously have trouble being skills-based! Skills assessments are nothing new. Your HR department most likely knows them quite well. Artificial intelligence platforms have entered this arena, making the assessments all the easier to collect, collate, analyze, and then have at your fingertips when it’s time to deploy. With AI’s help, go even deeper: fully understand what employees can do now and what they could do in the future with some development.

3. Start with one or two targeted pilot projects.

Remember the mind of a scientist? These pilots are your experiments. Don’t expect overwhelming victory from the outset; you’re gathering data now for your ultimate success. What works best in your particular workplace? For the quirks and strengths of your particular team? Discover your new best practices as you build momentum with quick wins in these focused domains.

4. Consider the cultural ripples.

Most firms grew with the old-school practice of squeezing people into narrow job descriptions instead of providing the personalized work experience that skills-based systems create. That standard workplace culture must now change, too—especially for leaders! HR leaders, for example, will now shift perspectives, enabling fluid workflows by basing activities on employee abilities rather than predefined responsibilities. Managers will move to flexible teams, quickly identifying qualified people from across the company to fill particular project needs. C-suiters will drive strategies (and strategic plans) by aligning them with the skills pool buoyed by their talented staff—talent they can now appreciate thanks to this new skills-based approach!

5. Expect an organization-wide change.

With a few successes under your belt, the advantages become clear. The win-win for employees and the company fosters a desire to change across the company. Hold steady; despite the excitement, this will be a multi-year journey requiring patience and commitment. Every step of the implementation provides you with more experience and data to make the next rollout smoother and more successful.

As the pace of change and the increase in disruptive events continues in our world, adopting a skills-based approach is more than a forward-thinking HR strategy; it’s an absolute necessity. Think of it as an accelerator for your organization’s survival skills: adaptability, resilience, enhanced productivity, and boosted employee engagement. And for you personally, what could be better than being valued for being you?

 

This article was adapted by Dan Mushalko from our podcast episode Economies of Skill: Moving to a Skills-Based Team.

Thank you for reading our newsletter, where we bring you thought leaders and innovative ideas on leadership topics each week.

We strive to elevate the quality of leadership worldwide. Are you ready? If you are looking for help developing your leaders, explore our services.

Why Your New Job Is CSO (Chief Storytelling Officer)

Where is leadership bred: in the heart or in the head?

That may modernize Shakespeare’s original question, but it’s essential to ask in an era when many leaders live by numbers, analytics, and logic (and are asking AI to boost that). In our podcast, Dr. Tanvi Gautam, senior faculty at Singapore Management University and program director of SMU Executive Development, answers with a resounding “Both!”

Tanvi found that combining head and heart-based tools unlocks leadership potential that rational approaches alone simply cannot reach. Storytelling holds the chief spot amid the heart-based tools. Here’s why:

1. Storytelling has transformative power.

There’s hard science at work here. Stories activate the whole brain. Neuroscience studies find that a story’s facts activate language and analytical areas of the brain, while other story elements light up sensory and abstract areas. In short, your tale clicks on your team’s imagination; they see themselves in it. Because they “experience” it, the key points stick. Just like a movie’s hero changes as the film progresses, your team begins to transform, too.

2. Stories help your team navigate the future fluidly.

Future fluidity is Tanvi’s term for the ability to meet and navigate the future, whether it meets our expectations or not. It’s similar to the Innovative Leadership Institute’s “future-ready” concept. The key here is preparedness. Use the age-old storytelling technique of asking “What if…” as part of your regular routine. Rehearsing radical scenarios as thought experiments primes your team to quickly pivot when disruption inevitably strikes. Add pushing your team beyond its comfort zone—by attending conferences outside their fields, reading about unrelated topics, and the like—and your What-If stories are building resilience!

3. Tales tell your mission and purpose more effectively than taglines and mottos.

Ever wonder why action movies always include some kind of origin story? They help you understand the main character’s motivation and purpose. Without his tragic origin story, for example, even an icon like Batman would just be a crazed maniac beating up people at night. So, do a little research and discover your organization’s origin story. That will reveal the deeper reasons behind your company’s mission and purpose. Knowing the human side of the business helps people get behind it and genuinely believe in the mission—far more than just having them memorize a motto.

4. Your narrative fosters deep collaboration.

Knowing your story creates a common bond between team members; they’re now sharing a mission and purpose. That in itself fosters collaboration. More importantly, that shared story invites better communication, which, in turn, opens the door to deeper conversations. Tanvi’s five areas of deep conversation are inspiration, learning, friction, strategizing, and daring. Discussing these breaks down silos and shows a common purpose, which leads to better innovation, resilience, and future fluidity.

5. Stories MOTIVATE.

This is the cumulative effect of all the points we made above. It boils down to one prime element: belief. It’s one thing to flatly work toward hitting sales goals or a 3% profit increase. It’s entirely different to know that those goals originated in the founder’s desire to eradicate hunger and malnutrition with low-cost, high-quality foods. Or knowing why you, as the leader, believe so fervently in the team’s work. It’s hard to go above and beyond for a quarterly P&L statement; it’s easy to give your all to a story you believe in.

Scan those spreadsheets. Let your eyes dart across that dashboard. Their information keeps tabs on your team’s progress. Then, sit back and continue creating your story. Share it with your team, and you’ll move your plot toward success and a happy ending!


New Forbes Article

Check out Maureen’s latest article contribution reflecting on the key themes of the 2023 International Leadership Association Global Conference. Read Cultivating Leadership for a Thriving Future here.

 

This article was adapted by Dan Mushalko from our podcast episode Tales from the Top: How Leaders Use Stories.

Thank you for reading our newsletter, where we bring you thought leaders and innovative ideas on leadership topics each week.

We strive to elevate the quality of leadership worldwide. Are you ready? If you are looking for help developing your leaders, explore our services.

Leadership & the Art of Ethical Persuasion

It sounds like a Zen riddle: “Does a leader make a sound if there are no followers there to hear?”

Followership is the most critical part of leadership—and your ability to influence is the most critical part of gaining followers. But aside from Dale Carnegie, who talks about influence and persuasion, especially in leadership circles?

Well, Brian Ahearn, that’s who. Brian is today’s podcast guest, and the Chief Influence Officer at his firm: Influence PEOPLE. Which is a pretty strong hint that he’ll be talking about influence—ethical influence—and how leaders can use that for team success.

Do you like the people on your team?

Far too many executives believe the old myth that positions or titles make them leaders. In reality, the ability to influence people is a core component of a true leader, regardless of rank. And liking those people greatly powers your influence.

Here’s how Brian lays out the basics.

1. Practice the Principle of Liking

People are more likely to respond positively to those they like and hold in high regard. That part is just plain common sense. But here’s the twist when it comes to influence: that positive response amplifies when people feel that you like them. Why? Because that implies you also care about them, so they’re confident you put their concerns into the equations for your decisions. Instead of the usual short-lived, shallow transactional relationships most bosses have with their workers, you’ve created a lasting, meaningful connection with real value. As Brian sums it up, your instructions filter through a lens of “Good for me, good for you: good to go!”

2. Ground Relationships in Trust

Your team needs to trust that you’ll follow through on that care. It’s a simple case of your actions speaking louder than your words, so be sure to:

  • Consistently fulfill promises (and explain when you can’t)
  • Extend grace and understanding when a coworker makes mistakes (it’s important to forgive yourself for mistakes, too)
  • Sacrifice your personal interests for the good of the team, and
  • Address issues openly rather than let tension silently build.

In building solid relationships on a foundation of trust, you’re also providing your team with a solid sense of psychological safety—which in itself boosts innovation and engagement.

3. Practice Pre-suasion

Set the stage; that’s what this point boils down to, yet it’s remarkable how many leaders don’t prepare their teams for big news, major projects, and the like. Pre-suasion, then, simply means you’re laying some groundwork before you try to persuade or influence the team. Taking them by surprise inevitably kills morale and creates resistance to the new initiative! So, prepare your team mentally, emotionally, and even physically before launching into something new. (Brian exercised pre-suasion before asking his wife to marry him; enjoy the romantic details in his TEDx talk at https://bit.ly/InfluenceAndLeaders-TEDx).

4. Deploy Influence Ethically

Influencing unethically is flat-out manipulation—which destroys any sense of trust or care you’ve worked so hard to foster. Brian suggests three standards that ensure you’re holding to an ethical bar:

  • Truthfulness
  • Using persuasion—and pre-suasion—naturally
  • Creating mutual benefit

In other words, as an ethical influencer, you’re transparent and authentic, you avoid manipulation, and you ensure your requests of the team provide value for everyone involved.

We all try to influence others. It starts the moment we’re born with cries to bring us the food and shelter we need as infants to survive, and it continues from there: it’s a womb-to-tomb process. You can tame and refine that natural need to influence: performed ethically, effective persuasion and influence ultimately enable leaders to unlock the full potential of their teams. They build relationships where conflict no longer divides but drives innovation!

 

This article was adapted by Dan Mushalko from our podcast episode How Influence Leads to Great Leadership.

Thank you for reading our newsletter, where we bring you thought leaders and innovative ideas on leadership topics each week.

We strive to elevate the quality of leadership worldwide. If you are looking for help developing your leaders, explore our services.

It’s Your Decision: How Corporate Boards Use AI

Is your board of directors ready for the future? Are you?

AI is creeping into the boardroom. In fact, one company now has an AI bot on their board! That shows AI issues are now fiduciary and ethical considerations for any board member, yet few directors are truly future-ready. Our guest, Helle Bank Jørgensen, has lots of wisdom to share thanks to her experience as CEO and founder of Competent Boards.

ILI is all about future-ready leadership. We can help you with your board, especially when it comes to leadership in the age of AI. We actually wrote the book on it! Learn more at InnovativeLeadership.com.

To paraphrase the Spider-Man proverb: “With AI power comes board responsibility.”

As artificial intelligence continues seeping through our workplaces, it presents major fiduciary and ethical risks complacent boards of directors don’t see – but competent boards are acting on now.

There’s no denying that AI showers a wealth of potential to aid decision-making. These five guidelines will help your board make those decisions wisely and mitigate risks for your organization. They’re based on expert guidance from this week’s podcast guest: Helle Bank Jorgensen, the founder and CEO of Competent Boards.

1. Can you trust your AI?

First and foremost, you have to be able to trust the information an AI system is giving you. This goes beyond the misinformation and disinformation on social media. AI is only as good as the data it’s trained on, so determine how objective, accurate, and robust the system’s data is. Programmers can even introduce their own personal biases without realizing it. So, think hard about the guardrails you want in any AI systems you use, then continually eye your trust in them. In this way, trust becomes a bridge between the tech and its users.

2. AI enhances decision-making; it doesn’t replace it.

Some complacent boards are already blindly accepting AI results as decisions. But if they lead to problems, the legal responsibility (and consequences!) remains with you, the human board member. So, think of AI only as an advisor, one who curates and simplifies comprehensive company data for you—while you apply your very human critical thinking and experience-driven intuition to shape the final decision. The bottom line: you’ll be held accountable, so insert yourself into every equation!

3. Remember the risks.

This can’t be emphasized enough. AI is very susceptible to the old coder’s adage of GIGO: Garbage In = Garbage Out. One bit of bias, one byte of false data, and your AI’s conclusions will be off the mark. That bad data can be accidental or intentional (like Deepfake videos). Relying on distorted reality leads to off-target—and potentially fatal—business decisions. Heed Helle Bank Jørgensen’s mantra from our podcast: “Trust is a big, big word.”

4. Be healthily skeptical.

This is a guardrail building on Guideline 3 above. Given the risks of data reliability, balance AI’s vast potential with a discerning perspective. You have real-world experience, insight, emotion, and intuition. Together, they give you a very human edge in judgment. Use it! But don’t let it cloud your judgment to become too risk-averse; one major advantage to AI is that it often sees counterintuitive trends and solutions humans can’t. So, balance is key here.

5. Learn to recognize and mitigate the inherent biases.

AI is structured by human coders. And humans are far from perfect! From insular thinking to confirmation bias, some slant is therefore inherent in any AI system. There’s no one solution to this, although the more diverse the thinking and experiences of your AI’s developers, the more these invisible biases can be avoided. Ultimately, though, you’ll need to rely on critical examination, self-awareness, and challenging pre-conceived notions to assess AI’s results.

Through all five guidelines, one conclusion becomes crystal clear: AI truly begins and ends with the human touch.

Artificial intelligence sits at the very beginning of unprecedented growth into every corner of the business world. The stakes only grow higher from here. So, how competent is your board? And what will you do to make it future-ready? The organizations that start upskilling their boards now will be best positioned for the fluid futures ahead.

 

The Innovative Leadership Institute intensely studies the interplay between AI and leadership. Join us for our webinar about it; you’ll find details below. Our latest book addresses it; Innovative Leadership and Followership in the Age of AI. And check out our online courses and coaching services at InnovativeLeadership.com.

This article was adapted by Dan Mushalko from the Innovating Leadership: Co-Creating Our Future podcast episode Competent Boards By Choice, Not Chance with guest Helle Bank Jørgensen, CEO and Founder, Competent Boards.


Thank you for reading the Innovative Leadership Insights, where we bring you thought leaders and innovative ideas on leadership topics each week.

The Innovative Leadership Institute strives to elevate the quality of leadership worldwide. If you are looking for help developing your leaders, explore our services.

2024 Trends: Tensions and How to Manage Them

Maureen Metcalf, CEO of the Innovative Leadership Institute, and Dr. Christopher Washington, Provost and Executive Vice President of Franklin University, share this trends article as a companion to their podcast Leadership Trends for 2024,

Link to the entire interview:

Listen to the companion interview and past episodes of Innovating Leadership: Co-Creating Our Future via Apple PodcastsTuneInSpotifyAmazon MusicAudibleiHeartRADIO, and NPR One.

Every generation of business leaders experiences social, economic, and environmental tensions that must be managed to achieve successful organizational results. What’s new in 2024 is that the volume and pace are accelerating. To navigate these changes, we must move from solving problems to managing tensions. What combination of problems, barriers, and opportunities will create the tensions and barriers that managers must manage in the coming year?

Here are the top trends I see for 2024 and beyond.

Trend 1: Artificial Intelligence & Computing Power

Technological advancements, including AI, robotics, sensors, and gene editing, are taking center stage in 2024. We can expect a significant impact of these advancements on how most people live and work. Bill Gates says, “This new technology can help people everywhere improve their lives. At the same time, the world needs to establish the rules of the road so that any downsides of artificial intelligence are far outweighed by its benefits, and so that everyone can enjoy those benefits no matter where they live or how much money they have. The Age of AI is filled with opportunities and responsibilities.”

Tension: As Gates highlights, we must balance the need for speed and experimentation with solid processes and operational excellence. Balance the cost and time investment in training and desire for novelty with the speed at which changes happen. Where do we invest, and where do we train? One crucial recommendation is to determine where to learn and where it is essential to unlearn outdated mindsets, skills, and behaviors.

 

Trend 2: Weather Disruptions and Environmental Degradation

Weather will elevate to the strategic level for many organizations. We are seeing changes in weather patterns that are disrupting weather prediction models. Accurate prediction is becoming more challenging. Since weather impacts every supply chain segment, every organization will be affected to varying degrees.

While weather is more visible, the issues are broader and more encompassing than weather patterns. Environmental degradation encompasses various environmental harms, such as pollution and resource depletion, while changing weather patterns refers explicitly to the alterations of atmospheric conditions. Corporate activities such as growing industrialization and overexploitation of natural resources can lead to environmental degradation and changing weather patterns.

Tension: Balance the need for data and certainty for weather-related strategic planning with the fast-changing climate disruptions. Mitigation can include creating a weather-related strategic plan to balance the need for data and certainty. The planning process and having a solid data source like the Weather Company to predict longer-term trends will provide a solid foundation for crucial decisions.

 

Trend 3: Polarization

The polarization of groups and communities makes agreeing on a path and moving forward challenging. As people in any group — whether a team, department, company, community, nation, or people sharing a planet — we need to find a process to identify common ground and develop agreements and solutions to address our most significant challenges. If the trend continues, we may see a rise in incivility in some groups and, in others, a willingness to find common ground.

Tension: Within organizations, we want people to have the opportunity to be authentic, and concurrently, the organization needs employees, contractors, and board members to focus on the business of the organization civilly and respectfully. We need to create a psychologically safe environment to explore the impacts of policies and business decisions among team members with vastly different perspectives. Then, we need to make decisions that team members will support. Tolerating disrespectful behavior and noncompliance with business decisions can lead to long-term damage.

 

Trend 4: Shifting Interest Rates

For over a decade, individuals and businesses alike have become accustomed to easy money offered in a low-interest rate environment. This all changed in 2023, with escalating interest rates significantly shifting ROI calculations and, in some cases, overall business models. While increasing interest rates tend to slow borrowing and business investment, reducing it has the opposite effect. Additionally, fluctuations in interest rates in either direction unevenly impact individual and organizational spending.

Tension: Balance sticking to your organization’s proven products and services with rapid prototyping and exploration. To regularly create a profitable product portfolio, organizations must monitor the economic environment and its impact on purchasing and selling power, maintain robust processes to evaluate current products’ viability, and simultaneously launch new products. These processes should align with the organizational strategic planning process and be agile enough to adjust as the interest rate environment shifts.

 

Trend 5: Work-Life Demands

For many, the aftermath of COVID-19 has changed workplace norms and expectations, and many people are trying to find a new work-life balance. While we read that AI will make a four-day workweek possible, others see the opposite: increased expectations and work volume. This is already leading to burnout and epidemic-level mental health issues.

Tension: We all want to attract and retain the best talent while managing increasing cost pressures and inflation. As organizational leaders, we must find approaches to balance sustainable workloads with meeting our financial goals. High levels of retirement and long lead times to hire are straining many organizations during the current labor shortage. Companies are experimenting with approaches such as a four-day workweek with some success. The Chamber of Commerce recommends, “Businesses can increase their hiring pools by removing barriers to entering the workforce like expanding childcare access, offering innovative benefits, participating in second-chance hiring, and providing opportunities for new and existing staff to be upskilled and reskilled on the job.”

 

Trend 6: Multigenerational Workforce

The presence of five generations in the workforce creates a level of diversity not previously seen. This diversity of thought, experience, and approach will allow companies to leverage a wide range of talent. Still, generational diversity will also create challenges ranging from clashing workplace and cultural norms to more complex decision-making processes.

Tension:Balance the broad perspectives that relate to almost every topic, from remote work to technology use. Some organizations engage members representing each generation to create organizational norms and agreements. They work past the stereotypes to understand one another and structure communication approaches, benefits, and leadership approaches for each group. Each generation must feel respected and engaged to create a thriving workplace.

 

Trend 7: Shift in Post-Secondary Education Pursuits

According to the Fall 2023 National Student Clearinghouse Research Center’s regular updates on higher education enrollment, “Students continue to gravitate towards shorter-term credentials, with enrollments in undergraduate certificate programs jumping 9.9 percent over 2022, compared to 3.6 percent for associate degrees and just 0.9 percent for bachelor’s degrees.” There are lots of workforce implications here.

Tension: Employees will need retraining at an accelerating rate based on the range of disruptions we see. They will need to choose between a range of options for retraining and balance the cost and time involved. Concurrently, organizations and governments must weigh these investments based on the broader community, social impact, and cost. Also, universities and corporations can collaborate to incorporate relevant micro-credentials that lead to employability into full degree programs that can reduce the overall time and cost to obtain credentials, and benefit both individuals’ future career prospects and corporations’ need for more advanced talent.

Trend 8: Geopolitical Uncertainty

Reshoring of manufacturing, CHIPS Act implementation, new alliances, diverse worker perceptions of global conflicts, and the state actors involved are among the range of factors driving geopolitical uncertainty. Geopolitical factors drive tensions that spill over into organizational policies and staff interactions. Geopolitical issues can be very personal, highly charged, and polarizing. Leaders must understand how their colleagues and employees are affected. Often, uninformed statements have the potential to damage relationships. Part of leadership is to create a safe environment for employees to work.

Tension: Beyond creating a safe environment for people, organizational impacts can cover every aspect of the enterprise. Organizations and their boards must develop clear points of view about when and how to respond to geopolitical issues. Responses may evolve as conditions change.

 

Final Thoughts

Leaders must take care of themselves first to lead their organizations effectively. For many, this means maintaining resilience-supporting practices ranging from having solid relationships and exercise routines to meditation and prayer practices. After self-care, leaders must then create environments where their organizations can thrive.

These trends mean everyone will face challenges in the next year. Some will be excited by the opportunities; others already fear the risks. No matter which tendency people have, each individual will be in a situation where the changes impact them personally in ways they didn’t expect. Leaders need to excel at the human skills of communication, acting with empathy, and even compassion and love for the precious humans who will struggle and overcome complex challenges. Everyone will be called to dig deep and do difficult things in 2024 — and the years that follow.

 

ABOUT THE AUTHOR:

Maureen Metcalf is the founder and CEO of the Innovative Leadership Institute. She is an expert in anticipating and leveraging future business trends. Ms. Metcalf helps leaders elevate their leadership quality and transform their organizations to create sustainable impact and results. She captures 30 years of experience and success in an award-winning series of books used by public, private, and academic organizations to align company-wide strategy, systems, and culture using Innovative Leadership techniques. Ms. Metcalf is a Fellow of the International Leadership Association. She also serves on the advisory boards of the School of Strategic Leadership at James Madison University and the Mason Leadership Center at Franklin University. Ms. Metcalf earned an MBA from Virginia Tech. She can be reached at mmetcalf@innovativeleadership.com.

Christopher Washington is a learning ecosystem designer who serves as Executive Vice President and Provost of Franklin University.

Thank you for reading the Innovative Leadership Insights, where we bring you thought leaders and innovative ideas on leadership topics each week.

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Check out the companion interview and past episodes of Innovating Leadership: Co-Creating Our Future on your favorite podcast platform, including Apple PodcastsTuneInSpotifyAmazon MusicAudibleiHeartRADIO, and NPR One.

When Produce Produces Innovation with Avocados From Mexico CEO

Alvaro Luque, President & CEO of Avocados From Mexico shared this article as a companion to his podcast Avocados: When Produce Produces Innovation.

Link to the entire interview:

Listen to the companion interview and past episodes of Innovating Leadership: Co-Creating Our Future via Apple PodcastsTuneIn, Spotify, Amazon Music, AudibleiHeartRADIO, and NPR One.

This year, Avocados From Mexico celebrates a major milestone — 10 years of fast, exponential growth. Our company was created to do two things: build a brand for Mexican avocados, and drive avocado demand in the U.S. In our first decade, we’ve tripled brand preference, becoming by far the preferred avocado brand in the U.S., and doubled the volume of Mexican avocado imports. All this while generating an economic output of more than 11 billion dollars.

Innovation and a passion for performance have been the driving forces behind our success story. By reinventing the way produce is marketed in the U.S., we have created a visible brand in a brandless category that is now considered a staple in the Super Bowl and have driven consumption to almost 9 pounds per capita in the U.S. Today, 8 out of 10 avocados in the U.S. come from Mexico.

I am incredibly proud of the team that we have built and the hard work that has gone into expanding the avocado market in such an unprecedented way. Since our founding, we have developed a long-term strategy to accomplish the goals of building a brand and driving demand, and we have successfully implemented our company programs following a disciplined business model approach guided by this process:

  1. Let STRATEGY be the igniter. First and foremost, in this company, we believe that everything needs a why. I love risky marketing ideas, but I firmly believe that strategy is king. A good strategic vision and a solid insight are the north star guiding you to the results you want to achieve. Always, always start there, and don’t let shiny objects distract you along the way.
  2. Stay in your lane and DISRUPT everything around you. Once you identify the why, the strategy allows you to set the playground where you can be creative. At this moment, go crazy and break the mold. Be as disruptive as possible and try to do what no one else has done, but always within your playground. I believe in innovation that matters — creative ideas that have an impact and drive results.
  3. Have a PERFORMANCE mindset from beginning to end. Measure, measure, measure. Creativity always needs accountability. Ideas can’t just be strategic and disruptive; they need to move the needle, and everything can be measured if you pre-define well your success metrics. Concentrate on the biggest opportunities in front of you and then bring the results.
  4. Repeat, improve, and build a CULTURE around it. Following this formula creates a discipline that sparks the innovation and brings results. Now, be sure to do that in a way you can enjoy yourself and collaborate with amazing people around you. That’s culture. I like to say, “Work hard and have fun,” and I believe that perspective helps keep our team motivated, bringing the results while having a good time. At Avocados From Mexico, the essence of our culture and brand is Mexicanity, our term for the celebration of meaningful good times. That’s the spirit we use to celebrate our innovative, high-performance programs that have built this brand in a brand-less world.

I’m a big believer in balance. I am a marketer, I love creativity, but with accountability and a strategy behind you that delivers results. If you can manage that balance between these two worlds and make them work seamlessly day by day, you are going to be successful. As the leader of the company, it’s my job to make sure that we’re moving the needle, but at the same time, I’m committed to fostering an environment where new ideas are supported. I must wear those two hats and be good at them simultaneously, but in the end, it is not only me that will drive this organization. It’s this group of highly engaged and effective people we have been fortunate enough to bring together at AFM. As their leader, it is also my job to offer my team the tools they need to be successful.

With that in mind, I’ve been developing some tools in each of the four quadrants of our thinking model to help our team execute our formula and foster a culture of innovative thinking and high performance:

  • Strategic Framework and Planning Process. We developed a detailed strategic framework that we have kept very consistent throughout the years. The framework defines very well our main targets, campaigns, channels, and strategic pillars. Every department in the company has its own framework that ladders up to our main one. That’s how you keep your company aligned and consistent. With a good framework in hand, we worked on a disciplined planning process that follows our thinking model, sets a solid foundation for creativity, and defines the goals we want to accomplish. We’ve been implementing and refining the process for years.
  • Innovation Ecosystem. We nurture our innovative spirit in everything we do. Disrupting is part of our DNA. To get to that mindset, you need to invest in it. One of our big priorities is training, so our team is constantly pushing the limits and thinking outside the box. We have identified within AFM “innovation champions” to make sure we continue thinking differently, and we have promoted innovation through our planning exercises and our own innovation awards that highlight our best ideas, always using the balance of creativity and accountability at the same time. We like to call that Brandformance.
  • Performance Platform: Measure What Matters. Tracking progress is just as important as the activations and ideas themselves. Using OKR thinking, we created our own customized digital platform where we track our growth. With this system, the whole company is measurable and visible to everyone. The process also inspires team members to consider clear goals and objectives that are defined from the bottom up not only to empower and encourage advancement but also to foster innovation and collaboration and serve as a place to ideate new ways to improve business. We even use this performance platform as our daily recognition tool to highlight our best work.
  • Develop a Culture Map. Our Culture Map defines our company’s purpose and the values we have as an organization. And because we are obsessed with performance, we develop our own operating guidelines for each value so we can operationalize our Culture and be sure we walk the talk.

After 10 years, I believe Avocados From Mexico’s thinking model is successful for a variety of reasons. Not only do we prioritize bold strategies and creative ideas, but we also understand that our creativity needs to drive results. That’s what modern marketing is all about, creating Value and Growth for our organizations.

I am optimistic about the future of AFM — and the future of innovative marketing as a whole. If we as leaders have a solid strategy, a good thinking process, and a true commitment to think differently and drive results, you will ultimately be successful at anything you do. That’s how I’ve built AFM and how we will continue thriving for the future.

 

ABOUT THE AUTHOR:

Alvaro Luque has transformed the produce industry by delivering innovative marketing strategies that not only defy established paradigms but also deliver impressive results. With more than 28 years of marketing experience in the CPG and produce industries, Alvaro has successfully built a brand in a brandless category. Under Alvaro’s leadership, Avocados From Mexico (AFM) has led the growth of U.S. avocado consumption to more than 2.5 billion pounds per year, and today, 8 in 10 avocados in the U.S. come from Mexico. Alvaro’s vision for making AFM the first fresh produce brand to advertise in the Super Bowl is one of many industry firsts that have positioned AFM as the most preferred brand of avocados in the U.S. and one of the most innovative produce companies in the world.

 

Thank you for reading Innovative Leadership Insights, where we bring you thought leaders and innovative ideas on leadership topics each week.

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Ready to measure your leadership skills? Complete your complimentary assessment through the Innovative Leadership Institute. Learn the 7 leadership skills required to succeed during disruption and innovation.

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The Deathline: Stopping the #1 All-Time Killer of Human Potential

Karen Tilstra, PhD., author, award-winning innovator, and psychologist, shares this article as a companion to her podcast None Shall Pass: Crossing the Deathline

Podcast intro from “Faux Mo:” an ILI AI experiment:

Link to the entire interview:

Listen to the companion interview and past episodes of Innovating Leadership: Co-Creating Our Future via Apple PodcastsTuneIn, Spotify, Amazon Music, AudibleiHeartRADIO, and NPR One.

“Knowing your deathline is your lifeline.”

Want to know the secret to being an effective leader and reaching your full potential? In theory, it’s quite simple: it all comes down to knowing and confronting your deathline. What’s a deathline you ask? Let’s find out.

 

“Whatever your deathline may be, we do any and everything to make sure we don’t cross these lines.”

A deathline is an imaginary line we draw, vowing never to cross. A physical deathline works to keep us alive. It’s what prevents us from jumping out of a plane without a parachute. Physical deathlines are universal and easy to understand.

We also live with social deathlines. Unlike the ubiquitous nature of a physical deathline, social deathlines are both highly personal and based on individual experience and personality. Social deathlines are based on a strict set of cultural expectations and norms. Whatever our deathline may be, we do any and everything to make sure we don’t cross these lines.

 

“Stifle our ability to act with emotional intelligence and think rationally.”

When it comes to being an effective leader and unleashing your full potential, physical and social deathlines aren’t the biggest factors. It’s personal deathlines we should be most concerned about. These deathlines are deeply personal, not governed by the antonym and physiology or the deeply ingrained social norms. Personal deathlines live deep in our subconscious. They are self-imposed boundaries we believe keep us emotionally safe and secure. Meant to help us survive, personal deathlines evolve from a place of need, but at some point, they stifle our ability to act in a proactive manner. When left to their own devices, deathlines take control, overshadowing our ambitions and stifling our gifts.

 

So, what exactly does a personal deathline look like?

Deathlines are simply fear. But this fear is the silent puppeteer controlling our deathlines. Many leaders are haunted by the fear of being fired or someone finding out they don’t have all the answers, thus activating a delimitating deathline.  And yet, beneath this veneer of self-doubt lies a wellspring of creativity and leadership acumen. When fear, aka a deathline, becomes the overriding emotion, it obscures our true capabilities, stunting growth and suppressing innovation.

Examples of a personal deathline are fear of failing, being rejected, or being perceived as incompetent. It may manifest into a scenario like this: in department meetings, you don’t speak up for fear of sounding unqualified despite being highly trained and experienced. You could be recognized as a brilliant team member, but you will never know because you let your deathline control you. Opportunities are missed, killing your potential.

 

The risk of leaving a personal deathline unchecked.

I have a friend whose deathline, “I cannot upset my boss and get fired,” thwarted his professional growth. The hoops he would jump through just to keep in his boss’s good favor could have earned him an Olympic medal. By his own admission, he was never honest with his boss and always played it safe. So, when it came time for a promotion, his boss skipped right over my friend. As you can imagine, my friend was crushed. When he worked up his courage to ask why he didn’t get the promotion, the boss responded, “I just didn’t see you were ready for advancement. You always stay on the safe side, and I needed someone who could tell me the truth, someone with courage.”  If he had only known about deathlines and how to navigate through them, he might have earned that promotion.

 

“Who does she think she is?”

As a young girl, the dominant voices around me shaped my perceptions. I recall my grandmother’s sharp retort to anyone she perceived as arrogant, asking, “Who do they think they are anyway?”  I can’t count the times I heard her say those seven words. Such seemingly innocuous remarks etched a deathline in my psyche. It took years of self-reflection and courage to challenge this self-imposed boundary. For I never wanted anyone to say about me, “Who does she think she is.”  It was a real deathline. In fact, ironically, I struggled with this while writing my book about the deathline. What if no one read my book, or a slew of bad reviews appeared on Amazon? This was a real deathline.

We all have deathlines holding us back. That’s why we must deal with them.

 

The Tollbooth Technique

Identifying one’s deathlines, however crucial, is merely the first step. The next is to challenge and navigate through them. And for this very purpose, I developed a metaphor I call the ‘Tollbooth Technique.’ Visualize your mental journey as a highway. Every time a deathline is activated, you come to a tollbooth. Now, you must pay the toll. So, just like a real tollbooth, where you slow down, pause, and pay the toll, when dealing with your deathline it’s the same. You pause, breathe, and ask the mother of all questions: “What’s really going on here?” This simple Tollbooth Technique creates the space needed to manage your deathline. Now you can more objectively decide whether to push ahead or retreat.

 

“Ace” Words: Space, Grace, Pace, Place

Managing deathlines beyond the Tollbooth Technique involves what I call ‘ace’ words: Space, Grace, Pace, and Place.

  1. **Space** – Create new mental space for fresh thinking. *Have I created the new mental space necessary for fresh perspectives and decisions?
  2. **Grace** – Extend compassion and forgiveness to others and myself. *How can I extend grace to encourage progress within myself and others?
  3. **Pace** – Discovering the proper pace needed. *Have I considered the right pace for the situation?
  4. **Place** – Place informs behavior. *Am I in the optimal place to foster collaboration, honesty, and creativity?

 

Embrace Your Deathline to Unleash Your Potential

Reflecting on my professional journey, a standout leader I once worked with epitomized what it meant to deal with one’s deathlines. One day she completely forgot an important meeting. I knew she was embarrassed, yet she admitted her mistake, which humanized her and created a safe environment. Such leadership isn’t about appearing flawless; it’s about being genuine. This was a positive outcome of identifying and dealing with our deathlines.

 

In closing, to unlock the doors to unparalleled success and personal growth, it’s imperative we recognize, challenge, and transcend our deathlines. I urge you to embark on this introspective journey today, to unearth, confront, and ultimately liberate yourself from the shackles of your self-imposed boundaries – deathlines!

Remember – Knowing your deathline is your lifeline!

 

ABOUT THE AUTHOR:

Karen Tilstra, PhD., is an author, award-winning innovator, psychologist, and super fun person. She has led hundreds of human-centered design projects, runs innovation workshops, and builds innovation labs for universities, healthcare systems, pro-sports teams, and government agencies. Her two books, The Deathline: Stopping the #1 All-Time Killer of Human Potential and 101 Activities to Ignite Collaboration, Boost Creativity, and Fuel Innovation, help leaders and team members unlock the creative potential that lies within all of us.

 

Thank you for reading Innovative Leadership Insights, where we bring you thought leaders and innovative ideas on leadership topics each week.

ADDITIONAL RESOURCES:

Ready to measure your leadership skills? Complete your complimentary assessment through the Innovative Leadership Institute. Learn the 7 leadership skills required to succeed during disruption and innovation.

Check out the companion interview and past episodes of Innovating Leadership: Co-Creating Our Future on your favorite podcast platform, including Apple PodcastsTuneInSpotify, Amazon Music, AudibleiHeartRADIO, and NPR One.

Boost Your Workplace Productivity and Well-Being with Joyful Leadership

Maureen Metcalf, founder and CEO of the Innovative Leadership Institute, shared this article as a companion to her podcast with Dr. Pamela Larde, a professor, coach, award-winning author, and founder of the Academy of Creative Coaching, Working & Living in Joy

Intro from “FauxMo:” Maureen’s digital twin and AI experiment.

Link to the entire interview:

Listen to the companion interview and past episodes of Innovating Leadership, Co-Creating Our Future via Apple PodcastsTuneInStitcherSpotify,  Amazon Music,  AudibleiHeartRADIO, and NPR One.

 

By integrating elements of joy into the workplace, leaders not only create an environment where employees feel respected and valued, but also where their personal and professional lives can flourish. This, in turn, translates to increased workplace productivity and a more positive company culture, making the cultivation of joy-infused spaces and activities something every leader should prioritize.

Here are some ways to create joy at work:

1. Cultivate self-awareness and emotional intelligence

By tuning into your emotions and reactions, you can create a more supportive and uplifting environment for your team members. Developing emotional intelligence and self-awareness allows for a better understanding of your strengths and weaknesses and enables you to communicate more effectively with, and empower, your colleagues. The ability to pause when you feel overwhelming emotions, then reflect on them objectively, means you can engage with colleagues respectfully and productively, without expressing negative emotions that risk alienating colleagues. Moreover, regulating your emotions is an important behavior to model for your team.

2. Prioritize self-care and holistic well-being practices

Self-care and holistic well-being practices foster increased workplace productivity while also proving beneficial for one’s personal life. By encouraging a culture of self-care in the workplace, you can create an environment that supports mental stamina, resilience, and overall well-being for yourself and your team members. This may mean setting a limit on the number of meetings you have in a day, or making other small adjustments to your schedule to ensure time for self-care, such as scheduling dedicated times for practicing yoga. When people prioritize their own self-care, they are better able to focus on tasks, make informed decisions, and engage in more positive interactions. This positive environment, in turn, leads to increased participation, creativity, and a willingness to collaborate, all of which contribute to the organization’s success. These well-being practices are also foundational to building self-awareness and emotional intelligence.

3. Encourage open communication and team support

This has a twofold effect; it allows employees to share joyful experiences, which in turn spreads these positive emotions throughout the office, and it encourages team members to lend support to one another when facing challenges. Open communication and team support are vital components in cultivating a positive work environment and nurturing the overall well-being of employees. There is great value in building a community that fosters joy and provides a safe haven for individuals to express their emotions openly. This psychological safety not only builds stronger relationships between team members, but also garners greater facilitation of ideas and innovative solutions, higher job satisfaction, improved performance, and increased employee retention. Avoid talking over colleagues, be conscious of how you respond to perspectives which you may disagree with, and encourage everyone to express their emotions rather than bottling them up.

4. Celebrate achievements and express gratitude

Thank colleagues for their work and contributions to the team. People feel valued when they know their leaders and colleagues are appreciative of their work. This also prevents team members from becoming disengaged and empowers them to feel that their work is meaningful. Think of the joy you’ve felt when someone thanked you in an extra meaningful way, then set a goal to emulate that act of gratitude with your team members.

5. Create joy-infused spaces and activities in the workplace

Offer spaces for team members to gather and get to know one another outside of a project, offer periodic fun or relaxing activities, and give team members the space to set boundaries which contribute to their ability to create joy. This can start with leaders emulating this adherence to personal activities which create joy. Rather than succumbing to a belief that joy has no place at work, remember that our professional and personal lives are intertwined. Being able to nurture healthy behaviors in both areas is crucial to making meaningful relationships in and outside of work. Turn on some music between tasks to encourage yourself to get up and move around, set times throughout your day to walk or to read a chapter of a book, etc. Intentionally create joy by giving yourself the proper space to make it.

 

By incorporating a culture of joy and support in the workplace, leaders enable individuals to thrive and reach their full potential. Creating joy in the workplace not only boosts morale but also enhances overall productivity, meaning that joy has a significant place in the success of an organization.

These strategies don’t have to be implemented overnight. Try to give more thanks to your team members for their work and for showing up to participate in the success of your organization. Ask some trusted friends or colleagues to establish a check-in group, wherein you can send out ‘SOS’ messages when you’re struggling, and your community can rally around you. Set limits on meetings and dedicate a certain amount of time each day to something that is certain to boost your mood. Don’t hesitate to put these strategies into practice and experience the positive effects of a joy-centric workplace firsthand.

Have you tried any of these tactics and strategies? Share your successes and challenges with us in the comments.

 

ABOUT THE AUTHOR:

Maureen Metcalf is the founder and CEO of the Innovative Leadership Institute. She is an expert in anticipating and leveraging future business trends. Ms. Metcalf helps leaders elevate their leadership quality and transform their organizations to create sustainable impact and results. She captures 30 years of experience and success in an award-winning series of books used by public, private, and academic organizations to align company-wide strategy, systems, and culture using Innovative Leadership techniques. Ms. Metcalf is a Fellow of the International Leadership Association. She also serves on the advisory boards of the School of Strategic Leadership at James Madison University and the Mason Leadership Center at Franklin University. Ms. Metcalf earned an MBA from Virginia Tech. She can be reached at mmetcalf@innovativeleadership.com.

 

NEW RESOURCE:

Starting Sunday, June 25, we will pilot an additional resource called “Leading Edge 120.” Each post will contain one 120-second video looking at a top story from the prior week’s news – but through a leadership lens. The intent is to keep you current as a leader in an easily digestible format. Our first round-up from last week is about the latest Gallup report tracking continued worker disengagement.

 

Thank you for reading the Innovative Leadership Newsletter by the Innovative Leadership Institute, where we bring you thought leaders and innovative ideas on leadership topics each week.

ADDITIONAL RESOURCES:

Ready to measure your leadership skills? Complete your complimentary assessment through the Innovative Leadership Institute. Learn the 7 leadership skills required to succeed during disruption and innovation.

Check out the companion interview and past episodes of Innovating Leadership, Co-Creating Our Future via Apple PodcastsTuneInStitcherSpotify,  Amazon Music,  AudibleiHeartRADIO, and NPR One.

Learn & Turn: How Exceptional Companies Grow With Customer Centric Focus

Sarah Ahern, an Owner and Partner at PATH, a 40-year-old woman-owned market research and business management firm, shared this article as a companion to her podcast Paving the PATH to Customer-Centric Success.

Podcast intro from “Faux Mo:” Maureen’s Digital Twin and ILI’s experiment with an AI tool.

 

Link to the entire interview:

Do you want to know the secret to growing a business successfully? In our 40 years in business, PATH has had the great fortune to partner with many exceptional companies to help them grow thriving businesses. Growing a business is no small lift – in today’s culture, our attitude towards achieving growth almost feels flippant – a “how-hard-can-it-be” type vibe. We can attest, from our own experiences and our clients’ experiences, that it is tough, grueling work. Creating a people-focused company that stands the test of time is especially hard.

Clients and partners come to us with the same question – how do I supercharge my growth? Companies that do it well bring people to the center of every single decision. We believe that so fiercely that we named our company after it: PATH stands for “People Are The How.”

How do you grow an exceptional business? To do it well requires three ways of thinking about people…

Exceptional companies:

  1. Have a competitive advantage mindset
  2. Are clear about what game they’re playing in the market
  3. Use data to know who their best customers are and what they want

We want to make a key distinction: you can be a solidly good company and not prioritize people above everything else. We’re talking about the difference between good and exceptional companies. We take inspiration from many great thinkers before us – Jim Collins, Daniel Pink, Brene Brown, Joseph Pine, James Gilmore, and more. The experts and the data are clear – a people focus is your competitive differentiator.

Let’s talk a little bit about each.

#1 Exceptional companies have a competitive advantage mindset

When we ask you, “what is your business’s competitive advantage?” what comes to mind? If you’re like us and our clients, you started to build a list. Strengths, weaknesses, opportunities, what the competition is doing. ChatGPT did the same thing, listing technology, sustainability, talent, etc. All of which are true! After doing this year after year, a key factor became clear – the list always changes.

So, how do we decide? As the market constantly shifts around us, how do we stay focused on what will drive the most competitive advantage? We know we can’t do it all. We have to choose. That’s the core truth: competitive advantage isn’t a thing on a list; it’s a mindset. Jack Welch’s quote sums it up nicely, “There are only two sources of competitive advantage…the ability to learn more and turn it into action faster than the competition.” A competitive advantage mindset forces us to recognize that change is constant and our ability to manage it better than the market is the only long-term differentiator.

#2 Exceptional companies are clear about the game they’re playing in the market

We’ve all bought something that we could have found cheaper or easier somewhere else. Why do we do that? How could we make such a seemingly illogical decision? My brother did his undergrad in economics and tells this story: in his Econ 101 class, the assumption is that we act in our rational self-interest – one part of Adam Smith’s “invisible hand of the market.” Economists also recognized that some decision-making couldn’t be accounted for rationally – the “animal spirits.” Then, behavioral economics entered the conversation, dedicated to understanding why people make decisions. It showed that logic and rational thought are only part of what drives our decision-making – emotions are a powerful driver of behavior.

I can’t tell you how many surveys we’ve implemented where customers say, “I work with them because I trust them to be there when I need them. They’re not the cheapest, but I don’t care.” Emotions drive behaviors, and experiences drive emotions.

That’s where the market decision comes in. Exceptional companies understand that success in the market is emotionally driven. There are too many choices in this world for consumers to weigh them logically. People have to simplify, and emotions take an outsized role in the decision. The companies that don’t simplify and try to be all things to all people lose in the long run – Sears, Toys R’ Us, and most recently, Bed Bath and Beyond.

Exceptional companies cut through the noise. And the success is clear – Apple, Disney, Tesla, Warby Parker. Starbucks is another great example. When we’re doing speaking engagements we always use this question, “You can go to the gas station and get 16 oz of coffee for $0.99 or go to Starbucks and pay $5. How many of you went to the gas station?” Very few hands go up. People know they can count on the exact Starbucks experience they want anywhere in the world.

#3 Exceptional companies use data to know who their best customers are and what they want

How do we find the right customer? How do we build a loyal customer base? We hear this question all the time – “I know who my customers are, but who should I grow with?” Exceptional companies don’t guess – they use data to understand and prioritize their best-fit customers.

I read a great story about Amazon that drives this point home. We’ve all heard about how customer-focused Jeff Bezos has been from the beginning. If you go back and listen, it’s not just any customers; it’s specifically his consumers. Though Amazon serves four different customers (sellers, enterprises, content providers, and consumers), the whole business model is designed to serve the consumer, even to the detriment of the other customers. Sellers, in fact, have sued Amazon in the past for more resources.

This data-driven focus on the consumer has led to industry-defining innovations like Prime, One-Click Ordering, immediate returns, and more. Bezos and Amazon used data to understand what customers wanted and ruthlessly delivered that to them with huge success.

We had a client who saved $5 million in additional investments after cutting an innovation that had been in development for years. They did so because customers said they didn’t want it. It isn’t always easy, but it’s the difference between good and exceptional.

 

“Data is the oil of the 21st century, and the ability to process data and extract insights from it is the new superpower.” – Jeff Bezos.

 

In conclusion, exceptional companies grow by putting people first. Customer tastes will change, disruptors will enter the market, competition for talent will continue to heat up, and world-shifting events will happen. In short, things are going to change and as good as your business model may be today, it cannot—and will not—survive forever.

Our competitive advantage relies on our ability to learn more about our customers and turn it into action faster than the changing market tides. Through this, we are able to decisively grow; intentionally and in partnership with the people our business serves.

 

ABOUT THE GUEST:

Sarah Ahern, MA is an Owner and Partner at PATH, a 40-year-old woman-owned market research and business management firm. She has developed and launched companies, programs, products, and services for almost two decades as a 4-time entrepreneur and consultant.

Sarah has built change management and market growth strategies for Fortune 100 and 500 companies across North America. To spice it up, she rounds out her understanding of human behavior with a Masters in Health Education, a culinary degree, and experience designing and implementing nutrition-focused population health programs for Whole Foods Market, LinkedIn, Tesla, SpaceX and more.

Sarah is a passionate thought leader, consultant, educator, and community steward. She was recognized as a 2022 recipient of the Columbus 40 Under 40 award and is a renowned facilitator and mentor in the social enterprise community.

 

Thank you for reading the Innovative Leadership Newsletter by the Innovative Leadership Institute, where we bring you thought leaders and innovative ideas on leadership topics each week.

RESOURCES:

Ready to measure your leadership skills? Complete your complimentary assessment through the Innovative Leadership Institute. Learn the 7 leadership skills required to succeed during disruption and innovation.

To-do list:

Check out the companion interview and past episodes of Innovating Leadership, Co-Creating Our Future via Apple PodcastsTuneInStitcherSpotify,  Amazon Music,  AudibleiHeartRADIO, and NPR One.