Issue #56
#56 - Female leaders "break up" with work; IKEA leaders ditch forecasts for scenarios; big retailers struggle to find leaders.
March 03, 2023

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#56 - Female leaders "break up" with work;

IKEA leaders ditch forecasts for scenarios; big retailers struggle to find leaders.

What's up, everybody?

Usman is in Singapore this week 🙌🏻, which means we get to hang out, and get to see the companies we work with in person. (Even if we still record the podcast from different ends of town so we can both use our "fancy mics". 😛 🎙️ Here's the link to the podcast discussion of issue #55, "Zoom, Southwest, Barnes & Noble: Big Leadership Lessons From Big Brands").

One hyper-talented founder we met up with this week, we were excited to hear, is growing a fantastic business. We talked about his people strategy, and poked around, as we like to do, on his team, his culture, and his product. We also learned that his company of ~15 employees had no women on it. And that the only job offer ever to be rejected by a candidate, was rejected by a woman.

At this point the founder asked (openly, and with curiosity): "How important is diversity?". Usman's response:

"You wouldn't wilfully neglect or shrink your business market by 50%, would you? Why would you shrink your hiring market by 50%?" 🤷🏻

This week, we look at the way the leadership role is evolving, in real-time, and at how we're failing to train leaders for that shift; all while we systematically shrink the supply of leaders -- leaving us with a fundamental mismatch between supply and demand:

  • Story # 1 - Home furnishing giant IKEA illustrates how one a pillars of a leader's job description -- the ability to forecast and plan -- is evolving as the world itself changes and becomes more unpredictable. 🇸🇪
  • Story #2 - A striking lack of CEO talent in the retail industry highlights how poorly the sector has trained and developed its leadership bench, while reinforcing that the requirements of leadership have changed.
  • Story #3 - Female leaders, burned out and fed up with a lack of advancement, flexibility, and diversity in their companies are "breaking up with work", leaving a massive leadership hole at precisely the moment we need more and better and more diverse leadership.

Thanks again for reading and exploring with us -- and have a great week!

Aki + Usman

#1

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#Leadership #ShiftingJobDescription #Unpredictability #ScenariosVsGoals

Usman and I often debate the merits of goal-based planning, particularly in the context of employee performance. For instance, how much value is there in setting targets, KPI's, or OKR's at the beginning of a quarter, when priorities and goals are so likely to change by the middle of that quarter.

In that same vein, this read from the Financial Times explains that CEO's are beginning to question the efficacy of setting budgets -- the decades-long foundation of business planning. The cause of the shift is a mix of bewildering economic signals, and a lack of confidence in the ability to predict what might happen in even a few months' time:

CEOs are struggling to make sense of confusing macroeconomic signals. In Europe and the US, an economic downturn is combined with record-low unemployment and labor shortages. Consumer behavior is a mystery: up until recently people have kept spending even though the price of almost everything has gone up.

As a result, companies like IKEA are beginning to move from setting goals, to identifying the scenarios that are most likely to materialize:

Ikea, for instance, has changed tack. Instead of setting out specific goals for the year, it has a set of “scenarios” to give the business wiggle room as the outlook changes. It means acknowledging that widely different outcomes are possible. “It’s teaching us agility in how we operate,” said Brodin.

You have to admire Ikea for injecting that agility into its system. It takes courage to rewire the way you plan, and to force your team to adopt such a new way of operating, and thinking about the world. 👏🏻

#2

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#Leadership #ShrinkingSupply #ShiftingJobDescription

Anybody want to run the North Face?

It turns out a striking number of big retailers are missing, umm, a CEO 🙈; the result of a job description that now calls for new and hard-to-find skills, and a long-time underinvestment in formal management training programs:

A number of high-profile companies — including Gap, Diesel, and the parent of the North Face and Vans — are operating without a permanent chief executive officer. And thanks to a contraction of management training throughout the industry and the need for a rare combination of skills to navigate this tumultuous period, filling those leadership roles is perhaps more difficult than it has ever been.

This next paragraph is about retail but applies just as well to other industries (we've highlighted tech, in the past) which have failed to develop their leaders:

The past few years have required chief executives to adapt to a retail landscape they weren’t trained for and learn a wider array of skills to help their organizations navigate the exhaustive list of disruptions brought on by the pandemic. For decades, retail executives have been expected to be expert sellers — knowing what people wanted, how much of it and how to get them to buy it. Now, top executives are also expected to understand how many resources should go to e-commerce operations compared with brick-and-mortar stores, how to troubleshoot issues in global supply chains and when to invest in emerging technologies like the metaverse.

#3

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#Leadership #Inclusion #ShrinkingSupply #TheGreatBreakup

What are we doing, folks? Truly, what are we doing?

In its “Women in the Workplace” report, which surveyed 22,000 women and 18,000 men, Lean In and McKinsey & Co. found that:

Women leaders are leaving their companies at the highest rate ever, and the gap between women and men in senior roles quitting their jobs is the largest it’s ever been.

Then, after explaining that, "Working women in the U.S. are among the most stressed employees globally", the report goes on to share:

It’s increasingly important to women that they work for companies that prioritize career advancement, flexibility, employee well-being as well as diversity, equity, and inclusion — and they’re leaving their companies in unprecedented numbers when these needs aren’t met. [emphasis added]
“It’s a disastrous situation … you’re not promoting enough women into the leadership ranks, and now you have more women leaving leadership roles,” Thomas says.

And as usual when it comes to understanding work, there's also a generational dynamic at play:

Companies are also at a massive risk of losing young women for the same reasons driving female leaders to quit, as these issues are even more important to women under 30.

When we tie this week's Stories together: leadership itself is changing fundamentally. We've done a really poor job of developing leaders, broadly; and of equipping people for modern leadership, in particular. And we're systematically squeezing a crucial source of leadership -- women -- out of the system.

It's a sobering picture. So we want to end by amplifying this positive note from Story #3:

“Women are highly ambitious,” she says. “And the companies that get these things right will get the very best out of having so many women at the top of their organization — better collaboration, more diverse problem solving, the list goes on — and drive their companies into the future.”

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​Thanks for reading. 🙏🏻

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