From CCL’s Vertical Leadership for Executive Teams
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Today’s business organizations operate in a fast-moving global environment where market dynamics and competitive landscapes constantly change. Challenges have become more ambiguous, with uncertain outcomes. Shifting threats and opportunities connect and converge in unique ways, compounded by rapid advances in technology. Organizations are thus constantly transforming — to either lead, disrupt, or react to competitive threats and customer demands.

These dynamics require a fundamental shift in business leaders’ understanding of leadership itself and the leadership culture required for organizations to both survive and thrive.

CCL has created a vertical development framework that starts with developing executive teams and which helps entire organizations initiate and sustain transformation. This leadership culture fosters the interdependent, complex thinking that best ensures strategic initiatives succeed.

Why is this important? A strategic initiative can succeed only when the leadership culture supports it. As Peter Drucker famously said, “Culture eats strategy for breakfast.” Culture always wins over strategy.

This vertical development framework acknowledges that in order to create and implement a transformational strategy, culture must transform — if not first, then at least in parallel. Strategy is thewhat — what do we want our organization to achieve? — and culture is the how. The cultural beliefs and practices of leadership must shift in order to implement the desired transformation.

Culture “eats” strategy because it operates on unconscious autopilot mode. So for a strategy to transform your organization, you must be intentional about your leadership culture, including the beliefs and practices that drive decisions.

This paper presents a model for leadership culture transformation based on our
work with dozens of clients around the globe. The model, illustrated below, has 3 components:

1. The vertical development of leadership mindsets;

2. The development of aninterdependent leadership culture; and

3. The resulting organizationaldirection, alignment, andcommitment.

In particular, the vertical development of leadership mindsets requires 3 essential categories of development work shared between members of senior leadership:

a) the expansion of awareness and increased perspective of both self and whole enterprise systems,

b) the sharing of power to collaborate, learn, and lead the whole enterprise, and

c) the persistent pursuit of critical, both/ and thinking in a “view from the balcony”to manage the dilemmas that emerge at both the enterprise and interpersonal levels.

When all this is accomplished, executive teams can lead by modeling these qualities.

But the how of vertical development is not a quick fix. It is not just a choice to suddenly behave differently — new capabilities must be developed to advance to the next level. It is an individual and organizational operating system that must be upgraded to the next version. In essence, this is about executives coming together to explore mistakes and hidden assumptions, sacred cows, and beliefs that used to work in the old model but now are blocks to success — and the hard work of developing a real, shared, and feasible strategy that can be implemented.

This is accomplished in a tight learning process that starts with the senior team
and increasingly moves into the broader organization. It calls for adopting a few
good tools that work for the team and then radiating to both the organization’s strategic work and developing vertical leadership at the same time. This isn’t the “soft stuff” of development — many of our successful clients say it’s the hardest thing they have ever done!

Attention to leadership culture is the key to strategic success.

Leadership culture will make or break any strategy, change effort, or business transformation. Most leaders underestimate the risk of getting culture wrong. Instead, they focus habitually on the measurable, controllable, technical expert side — they manage the business.

To succeed in the long run, most organizations need to build toward cultures of greater interdependence. Interdependent cultures characterized by collaborative and shared leadership are needed to respond to complex, shifting environments.

Interdependent cultures require leaders to have vertical mindsets hallmarked byboth/and thinking that embraces complexity. While technical tools, systems, and processes are necessary, they must be accompanied by a deep understanding of an organization’s beliefs and their impact on culture.

Initiating and sustaining cultural transformation is the hardest work that can
be undertaken by any organization. We hope that this framework of leadership provokes some guidance for your thinking about your organization’s beliefs and how they help or hinder the work at hand.