Category: Democracy

Are you an “inclusive leader?”

Reading the question, you’re likely thinking about ethnic diversity and gender equality. “How many senior ‘people of color’ in your company? How many women  VPs?”

Or perhaps you’re thinking about “open organization”-style participation. “Do you make all the decisions? Do people who do the work have a real say too?”

Peter Wuffli, former CEO of Zurich-based UBS, and now a leader of several for-profit and civic institutions, thinks inclusiveness is something bigger.

Beyond Checklists And Processes

Wuffli’s new book (Inclusive Leadership: A Framework for the Global Era), thinks differently about diversity and inclusiveness. Of course organizations should not be just “male and pale;” yes, shared decision-making is better. But for Wuffli these are just tactics within a larger mosaic. The real diversity the world must tackle is the fragmentation of knowledge to solve our growing problems; and the fragmentation of ethical belief systems to guide our moral choices.

Wuffli argues that greater inclusiveness is what’s now needed to bring together the experience and understanding of all sectors — business, government, civic– to address the challenges before us that are increasingly interdependent. As our work and lives become more interconnected, and the outcomes of everyone’s actions are more unpredictable, our abilities to think and act upon what we know are not keeping up. And we’ve lost the ability to be both effective and ethical at the same time. More inclusive leadership is a vision for how humanity can take charge of this new future.

Past As Prologue

Inclusive Leadership grew out of Wuffli’s own leadership journey—“the successes, failures, and process of maturing.”  His conceptual travels began when he was a university student of poverty economics, and a journalist for the Neue Zurcher Zeitung. In the 1990s, after a stint consulting in different sectors at McKinsey, Wuffli jumped with both feet into financial services. He rode the wave of the fast growing, globalizing industry, becoming President of UBS (2001) and then its Group CEO (2003). Suddenly Peter Wuffli was leading one of the biggest banks in the world. The new job became a major platform for the next phase of his leadership thinking.

And there was plenty to think about. Wuffli’s UBS years were a thrilling and stomach-churning ride, rich with unprecedented opportunities and looming risks. He characterized his job as a bullfight where “within minutes a winning streak can turn into a trip to the hospital, or even death.”

The financial matador’s cape was soon bloodied and torn. In June 2007, after achieving record profits and several executive awards, Wuffli was forced out of UBS, victim of a still opaque “change of direction” in the corporate boardroom.

After the shock wore off, Wuffli reasoned that his misfortune was a small piece of a bigger world problem, a broad-based  “failure of imagination”—leaders everywhere not understanding the complexity of the global financial ecosystems, and the unintended consequences of so many fragmented actors making millions of decisions in conceptual isolation. He also felt that finance and capitalism more generally had become decoupled from economic value and the values of civilization itself: “The pace and complexity of change outstripped the trust of human institutions.”

New Leadership As The Best Lever

As markets swooned and governments struggled against collapsing systems after the crisis, the ex-CEO saw that better leadership in all institutions was the right lever for a better future. New financial regulation or witch-hunts of guilty executives would not guarantee long term sustainability. What was needed instead was development of “partner-like” leaders who thought more inclusively about their work, social roles, and connections to people and knowledge outside their jobs. “Leaving UBS opened my eyes to a new way of living and thinking. I wanted to share that with younger leaders coming up in the world.”

Wuffli wrote the book while trying to live its multi-domain ethos. After UBS, he returned to financial services, becoming Chairman of the private markets investment management firm Partners Group. He also threw himself into other kinds of work, to see the world through different eyes, and make his own contributions to “New Capitalism.” Today he leads the elea Foundation for Ethics in Globalization (which fights poverty in  developing countries), and is Chairman of the Foundation for IMD, the Swiss-based global business school. He also serves as Vice Chairman of the Zurich Opera House.

Moral Questions And A New Framework

Inclusive Leadership  incorporates Wuffli’s continued study of moral philosophy. The book is guided by the three classical questions: What is the good life? What is responsible behavior? What makes for a just society? The narrative reflects the former CEO’s own inclusive fusion of career action and reflection: “combining theory and practice, knowledge of different sectors, different belief systems and values, to reach a more common ethical perspective.”

That kind of inclusiveness informs the core framework of the book. Wuffli argues that the leaders of tomorrow, who will help renew our world, will combine three dimensions of thinking and acting (so rarely found together in today’s leaders): a “One World Perspective” (understanding and integrating across boundaries, organizationally and globally); commitment to “New Capitalism” (meeting society’s demands for more ethically responsive markets); and “Liberty-centric Ethics (pursuing the “good life” that balances freedom of choice and personal responsibility).

Beginning A New Conversation

Inclusive Leadership has its share of complexity—each conceptual Russian doll presented soon opens into another doll; the 250 page discussion becomes a series of increasingly, well, inclusive concepts. This is not afternoon beach reading.

But addressing complex challenges—like trying to fix the world’s fragmented economic and moral ecosystem—begins with complex hypotheses. Greater simplicity comes with the wisdom of time, and the give and take of different approaches in search of the next better paradigm. Mr. Wuffli’s book is not the only leadership prescription that argues for combining diverse knowledge, organizational connectedness, and ethical decision-making. But in its richness and honest personal story-telling, it’s a great read to launch some of your own future planning.

So what’s a good way to start becoming a Wuffli-style “inclusive leader?” He offers four “no regrets” suggestions:

1. Get to Know the World Better: Don’t just visit airports or hotels. Broaden your horizons by working and living in other countries. Seek developing world postings if you’ve never lived outside of Western economies.
2. Get To Know Other Sectors: Move across industries in your career. Seek jobs and projects not just into other business sectors, but also in non-profit and civic organizations.
3. Get Engaged Politically:  If you have the privilege of living in a democratic society, join the fray and learn. The political process will become steadily more important in the global economy.
4. Maintain Family And Friends. Economic and political turbulence will continue to rise in the interconnected world. Hold dear your social anchors.

Originally published on Forbes.com

Winston Churchill was the first to say “never let a good crisis go to waste.” If EU politicians can’t learn leadership lessons from thousands of migrants amassing on European borders, it will certainly be a crisis wasted.

But other executives can also learn from this crisis, especially those trying to lead in a more democratic and open way. Lurking behind today’s heartbreaking turmoil are fundamental strategic questions: whether and how to open a community of “insiders” to “outsiders?” And more specifically, “how open should an open community be?”

The Challenges Of Openness

These are timely questions. In today’s networked global economy, leaders are increasingly experimenting with openness, mixing, in different ways, “insiders” and “outsiders.” New combinations of talent, ideas and relationships are being pursued as never before, to spur innovation, reach greater scale or otherwise increase performance.

Next-generation leaders are building organizations open to a larger and more diverse world. They are launching cross-silo idea mash-ups and redesigning work to access skills and ideas of volunteers, experts and other contributors beyond traditional boundaries. Crowdsourcing and open source development have become mainstream; Gig economy companies (Uber, Lyft, Task Rabbit, etc.) disrupt closed industries with platforms to mobilize entrepreneurial workers networked to customers and each another. Product managers co-create new offerings with customers; businesses and civic organizations join strategic ecosystems, extending the influence of their home organizations.

Learning From Big Questions

But pioneering leaders know that working open is neither simple nor quickly done. Open has costs as well as benefits. Consequences of integrating virtual and more diverse workforces are tough to predict. How to “lead in an open way” is still a work in progress (thus Red Hat CEO Jim Whitehurst, The Open Organization). So what might any leader learn from EU politicians wrestling with the historic crisis of openness now at their doors?

1. Get Clear About Why: European leaders clash about why recent migrants should be admitted to the EU or not. Stated goals are sometimes humanitarian; other times more self-interested economics drive the narrative (e.g. adding new skills and/or younger taxpayers to an aging population). Benefits and risks are hotly debated: diversity of talent for a more vibrant, innovative economy versus dangers of admitting terrorists or welfare abusers.

Overall, EU leaders are struggling with three fundamental “whys”: i) what would we accomplish by admitting new outsiders? ii) why do we believe those goals can be achieved? iii) why do we believe achieving them will benefit our community, beyond the risks and costs? All leaders must answer the same three questions if they want to “go open.” And more important, they must develop the answers—and a shared understanding—with members of their communities. Newcomers may promise various upsides, but incumbent members will have to support the intended integration—or open strategy fails.

2. Get Clear About Who: European leaders are now prioritizing asylum seekers (e.g. fleeing violence in Syria) over “economic migrants” (e.g. seeking better jobs and welfare). But categories about who will be encouraged and accepted, and who will not can be blurry and contentious.

The “classification issue” confronts all open leaders. Open strategies are rarely “come one, come all.” As a community develops goals, certain segments of newcomers will support a strategy better than others. Whom should the community accept as its own?

Successful leaders engage their communities to help decide. If we want more innovative products or services, what new skills should we favor? Is there particular experience to prioritize? Particular geographic or market relationships? And, then again, how open are we to serendipitous talent that we didn’t plan for?

Questions of “who” also raise issues about magnitude of social integration. As the EU crisis demonstrates, without some kind of quotas, absorptive capacity can be overwhelmed. Thus another lesson for any open leader—if you’re tapping new talent, outsiders, or non-traditional sources of ideas, how much “external” can your community take on?

3. Get Clear About How: One immediate lesson from Europe’s chaos is the importance of scalable processes for registration, decision-making, and integration of newcomers. Open leaders in any organization must similarly build scalable operations for “integrating the outside” (e.g. about intellectual property, inclusion in existing business structures, etc.) But open leaders must also scale some intangibles when external talent joins an enterprise.

One is trust—values and protocols that enable people in a community to work together, and hold one another accountable for performance, without fear or antagonism. In Europe today, tensions simmer among some that too many Muslims will undermine the community’s “European way of life.” Differing organizational cultures in business can collide with similar destructive anxiety.

Another intangible to be scaled is leadership itself. Successfully combining insiders and outsiders requires multiple leaders working together—vertically, and horizontally across the networks. Once again, learn from Europe. As a loose confederation, the EU lacks any collective leadership coherence right now. Active resistance of many EU politicians against Germany’s greater openness to asylum seekers hinders the development of common policy. Without more leaders developing a shared agenda, a unified open strategy remains elusive.

Leaders of other open organizations should beware. The complexity of integration always requires many leaders working together to effect productive transformation. Woe to the CEO who tries to go it alone when bringing outside ideas and talent into an existing community.

4. Get Clear About Learning and Adapting Along The Way: Outcomes of open strategies can harshly surprise a leader. Opposition to the growing hordes of migrants who answered Angela Merkel’s early September outsize welcome forced her to re-stiffen Germany’s borders later this month.

That said, open leaders must embrace learning from experience . Longer term consequences of open strategies often emerge slowly, but the impact can be big. Betting on open means betting on people who may or may not make a positive contribution over time; who may or may not fit with the values and protocols of a community after the initial welcome; whose contribution, in the end, may not produce enough benefits and competitive value to offset financial and social costs.

And yet well-integrated newcomers can also exceed all strategic hopes. Learning and adapting go both ways.

Savvy leaders will mitigate costs and risks by helping the community become more resilient as “open experiments” proceed. Open leadership is not just about adding new skills and talent from afar; it’s also about being open to being less open, when needed. Or sometimes more.

Originally published on Forbes.com