Prelims

Greg Park (Independent Scholar)

Progressive Leadership: Challenging the Theory of the Firm in the 21st Century

ISBN: 978-1-83867-568-4, eISBN: 978-1-83867-567-7

Publication date: 21 March 2022

Citation

Park, G. (2022), "Prelims", Progressive Leadership: Challenging the Theory of the Firm in the 21st Century, Emerald Publishing Limited, Leeds, pp. i-xxii. https://doi.org/10.1108/978-1-83867-567-720221012

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Emerald Publishing Limited

Copyright © 2022 Emerald Publishing Limited


Half Title Page

Progressive Leadership

Title Page

Progressive Leadership: Challenging the Theory of the Firm in the 21st Century

BY

GREG PARK

United Kingdom – North America – Japan – India – Malaysia – China

Copyright Page

Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2022

Copyright © 2022 Emerald Publishing Limited

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British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN: 978-1-83867-568-4 (Print)

ISBN: 978-1-83867-567-7 (Online)

ISBN: 978-1-83867-569-1 (Epub)

Contents

List of Figures xi
List of Tables xiii
List of Boxes xv
Preface xix
Acknowledgements xxi
Introduction 1
What’s this Book about? 1
What’s the Problem? 1
Dominant Logic ‘Creep’ 2
What Do We Mean by the Term ‘Progressive’? 4
Urgent and Major Surgery to the Body Corporate 6
Replace the Hollow Men 8
Dare to Be a Leader 10
First, They Ignore You 11
Think Driverless Car 13
The Road Ahead 15
Part I: Hard Truths and Tough Solutions to Make Firm Leadership Relevant in the Twenty-first Century Business Context
Chapter 1: Resist Malignant Normality 19
The Ides of March are Upon Us 19
The Irrelevance of Leadership 19
Acknowledge Malignant Normality 22
Time for a Leadership Reality Check 27
The Times They are A-changing 30
We are the Hollow Men 32
The Licence to Lead Must Be Earned Once More 34
Let’s Get with the Programme 37
Exercises 40
Chapter 2: Re-imagining the Priorities of Capitalism in Order to Re-invent Leadership 41
Time to Question the Fundamental Drivers Which Direct Leadership Priorities 41
Capitalism and Leadership Re-modelled for the Twenty-first Century 43
Leaders Must Acknowledge that They Now Require More than a Spanner 49
Open the Mind, Loosen Control and Unleash Creativity and Collaboration 52
Optimal Decision-Making Requires Accessing the Totality of Firm Knowledge and Intellect 55
Exercises 62
Part II: Let’s Lay the Foundations for Effective Firm Leadership
Chapter 3: A Theory of the Firm for Today and Tomorrow 65
Time to Address Issues of Governance 65
Leaders Must Address the Disparity Between Dominant Principles and Operational Reality 67
Unpicking the Theory of the Firm – Who is Really Running the Show? 70
The Law and the Theory of the Firm 76
Towards a More Relevant Theory of the Firm 79
The New Firm Dynamic 82
Exercises 86
Chapter 4: Let’s Think More about the Psychology of Leadership 87
Fundamental Leadership Issues are Cross-Disciplinary and Endemic 87
The Absurdity, Glory and Complexity of ‘Real’ Leadership 88
Get with the Programme 92
‘Utility’ and the Prospect Theory 95
Should I Care about What People are Really Thinking? 101
Psychological Drivers and Effective Operational Leadership 107
Experts are Human Too 107
Identity as a Driver of Operational Effectiveness 108
Curiosity 110
Disadvantageous Inequality 111
Irrational and Visceral Behaviour 112
In a Nutshell 114
Exercises 116
Chapter 5 Get a Feel for the Dynamic of the Progressive Leadership Psychology 117
The Creation of a ‘Blended Value Proposition’ 117
Accept the Changing Firm and Leadership Dynamic 119
Let’s Drill Down to the Substrate 119
Regain Leadership Legitimacy 120
True leaders of today and tomorrow are essentially Sense-makers 121
Effective Sense-makers Visualise impact Down to the ‘floor’ 123
Take the oath and address the failure to thrive 125
Address Operational Issues which are Recognised as a Progressive Statement 128
Progressive leadership means less A--holes 129
Be Prepared to Resolve ‘Wicked’ Problems through Enhanced Psychological Capabilities 132
Leaders must be willing to lose to succeed 134
Listen to the voices 138
Progressive Leadership Can/Must Also Germinate at the Apex of the Firm 141
A Multi-disciplinary, Integral Leadership Logic 145
Exercises 147
Part III: No Need to Re-invent the Wheel: Profiles of Progressive Individuals and Firms
Chapter 6: Insights into Progressive Leaders’ Perspectives and Priorities 151
What’s the Secret of Firm Longevity? – Progressive is Not New 151
Progressive Leadership is about the Genes, Experiences and Reflections of the Individual 154
Leaders Who Exhibit a Progressive and Psychologically Insightful Leadership Logic 156
Don’t Scare the Horses: Think Progressively but Deliver on the Numbers that Still Matter 172
Chapter 7: No Need to Re-invent the Wheel: Progressive Firm Profiles 175
Let’s Re-construct the Pyramid 175
Change the Record 177
Progressive Leadership Principles and Priorities which Underpin the Industrial Foundation 181
Firm Profile 1: Cordant Group – Multi-Sector 185
Effective Progressive Leadership: Enlightenment Allied to Contextual Pragmatism 185
The Application of a Progressive Leadership Logic 185
Reality Bites – Fast 189
Firm Profile 2: Danfoss A/S – Engineering Solutions 191
Pencil Profile 191
The Longer View: Courage and Sustainability for Optimal Performance 191
Ownership, Control and Governance 195
The Bitten & Mads Clausen Foundation 197
Firm Profile 3: Novo Nordisk A/S – Pharmaceuticals & Health Care 200
Pencil Profile 200
History and Founder Motivations 200
The Novo Nordisk Way – The Essentials 201
Share and Ownership Structure – An Holistic and Integral Perspective 204
Firm Profile 4: Bosch GmbH – Global Conglomerate: Leading Supplier of Technology and Technological Services 209
Pencil Profile 209
‘Progressive’ Is Not Related to Time, but Rather to Mindset 210
Robert Bosch Defines Long-Term Firm Values, Priorities and Culture 211
Ownership, Priorities and Separation of Power 213
Closing Comments 217
Part IV: I Am Spartacus!! Am I Spartacus? Operational Implementation
Chapter 8: Think Like a Progressive Leader 221
In or Out? Recognising the Requirement for a Personal Metanoia 221
Stage One in the Personal Metanoia: Insight into the Dynamic of the Progressive Leadership Paradigm 222
Stage Two in the Personal Metanoia: Create Synergy Through Ambition Allied to Realism 226
Stage Three in the Personal Metanoia: Imagine You are Directing a Play 228
Stage Four in the Personal Metanoia: Where Does Everyone Stand? 232
Ready to Jump in? 237
Chapter 9: Act Like a Progressive Leader 239
Step 1: Enthusiasm Without Appropriate Knowledge and Insight Equals Failure 239
Step 2: Remember Gandhi – This is a Marathon, Not a Sprint 241
Step 3: Anticipate, Prepare for and Clearly Communicate Firm and Personal Implications 243
Step 4: Create a Structured, ‘Rolling’ Consultative and Collaborative Process 246
Step 5: Take a ‘Psychological’ Approach to Interactions 250
Step 6: How to Convince Those ‘Upstairs’ 253
Step 7: Detailed and Phased Operational ‘Infiltration’ within the Firm of the Progressive Leadership Logic 258
Step 8: Apply Responsible and Relationally Intelligent Perspectives During Transition 264
Concluding Remarks 266
References 269
Index 281

List of Figures

Figure 1.1. Progressive Leadership – Unlearn the Leadership Logic 39
Figure 2.1. Progressive Leadership ‘Grand Challenges’ 60
Figure 2.2. Re-Imagining Capitalism to Re-Invent Leadership 61
Figure 3.1. Key Influences on Corporate Governance and Ultimately Operational Leadership 73
Figure 3.2. Parameters for Calculating the Level of Individual Compensation 83
Figure 3.3. A Theory of the Firm for Today and Tomorrow 85
Figure 4.1. Let’s Think About the Psychology of Leadership 115
Figure 5.1. The Foundations of the Twenty-First Century Firm Covenant 121
Figure 5.2. Impact of Low Leadership Self-Concept on Pro-Active Employee Contribution 140
Figure 5.3. Key Steps in Getting with the Progressive Programme 146
Figure 7.1. Prevailing Hierarchy and Priorities of the ‘Traditional’ Theory of the Firm 177
Figure 7.2. Progressive Structure and Priorities of the ‘Progressive’ Theory of the Firm 177
Figure 7.3. Cordant Group Companies 186
Figure 7.4. Megatrends – Danfoss Business Model 193
Figure 7.5. Danfoss Foundations – Objectives and Areas of Charitable and Social Support 198
Figure 7.6. Novo Nordisk – Sales by Therapeutic Area 201
Figure 7.7. Novo Nordisk Share and Ownership Structure 205
Figure 7.8. Bosch Group Business Sectors 210
Figure 7.9. Bosch Ownership, Decision-Making and Management Structure 214
Figure 7.10. Robert Bosch Stiftung – Areas of Support 216
Figure 8.1. The Network Required to Direct and Support Optimal Leadership Effectiveness 223
Figure 8.2. Recognise and Accept the Organic Reality Which Delivers Optimal Performance 225
Figure 8.3. Structured Cognitive Process Towards a Progressive Theory of the Firm 229
Figure 9.1. The Foundations of the Progressive Leadership Logic 240
Figure 9.2. Schematic of the Evolutionary Infiltration of a Progressive Leadership Logic – Phase 1 259
Figure 9.3. Schematic of the Evolutionary Infiltration of a Progressive Leadership Logic – Phase 2 261
Figure 9.4. Schematic of the Evolutionary Infiltration of a Progressive Leadership Logic – Phase 3 263
Figure 9.5. Operational Implementation of the Progressive Leadership Logic 268

List of Tables

Table 5.1. Leadership Code of Conduct – Key Pledges 126
Table 6.1. The Oldest Firms Still Operating Today 152
Table 6.2. 17 United Nations Sustainable Development Goals 171
Table 7.1. ‘Established’ Foundation-Owned Companies Around the World 183
Table 7.2. Danfoss Sales by Business Segment 191
Table 7.3. Megatrends – Danfoss Action Plan 194
Table 7.4. Novo Nordisk Strategic Aspirations for 2025 204

List of Boxes

Box 2.1. Key Issues for Consideration by Leadership in the Twenty-First Century Firm 42
Box 2.2. Impact of the Prevailing Form of Capitalism on Firm Priorities 44
Box 2.3. The Theory of the Firm: Key Questions 46
Box 2.4. Three Types of Relations 47
Box 2.5. Leaders as Moderators: Key Implications 49
Box 2.6. Tough Questions Operational Leaders Must Ask Themselves 53
Box 2.7. Required Areas of Change to Pillars which Sustain Today’s Firm58
Box 3.1. Fundamental Questions Towards Creating a Relevant Theory of the Firm 74
Box 3.2. Directors’ Safety Parachute Against Shareholders 77
Box 3.3. A Re-Definition of ‘Employee’ 80
Box 4.1. Fundamental Leadership Traits 88
Box 4.2. The Practical Inconsistencies of Classical Economics 96
Box 4.3. Assumptions of Classical Economics Now Recognised as Illogical 97
Box 4.4. Pragmatic Realities Upon Which Behavioural Economics is Founded 99
Box 4.5. The Principles Underlying Prospect Theory 100
Box 4.6. The Logic of Change 102
Box 4.7. A ‘Get Real’ View of Leadership Capabilities 105
Box 4.8. The Realities of Bounded Rationality 106
Box 4.9. ‘Management Engineering’ Levers of Success 108
Box 4.10. A Recognition of the Multiplicity of Options in the Face of Perceived Inequity 111
Box 4.11. The Complex Cognitive Process in the Face of Disadvantageous Inequality 112
Box 5.1. Key Foundation Stones of a Blended, Progressive Leadership Proposition 117
Box 5.2. A Broader Leadership Perspective of Risk and Recompense 123
Box 5.3. New Skills Required of the Progressive Leader 127
Box 5.4. Steps to Eradicate A - - Holes from within the Firm 130
Box 5.5. The Relationship Between Change and Catastrophe 132
Box 5.6. Key Steps as an Instigator of Progressive Change 135
Box 5.7. The Roles and Responsibilities of the Real Progressive Leader 136
Box 5.8. First Steps Towards a Progressive Mindset 137
Box 5.9. Bureaucratic Versus Interactive – Priority Characteristics 142
Box 5.10. The Role of the Board in Implementing a Progressive Theory of the Firm 144
Box 6.1. Factors Which May Sustain Firm Longevity 151
Box 6.2. Carolyn McCall – Chief Executive of ITV plc 156
Box 6.3. John and Irene Hays – Hays Travel 158
Box 6.4. Andrew (Andy) Haldane – Chief Economist and Executive Director of the Bank of England 160
Box 6.5. Dominic Barton – Global Managing Director of McKinsey & Company 2009–18 & Subsequently Canadian Ambassador to China 163
Box 6.6. Paul Polman – Former CEO of Unilever 2009–19 and Co-founder of Imagine 168
Box 7.1. 8 Principles of Longevity 180
Box 7.2. Components of the Progressive Leadership ‘Recipe’ 180
Box 7.3. Progressive Indicators 181
Box 7.4. Industrial Foundations Pose Three Fundamental Questions 182
Box 7.5. Shareholders No Longer Tick the Boxes as Firm Owners 182
Box 7.6. Cordant Group: Challenges to the Values and Principles of the Prevailing Theory of the Firm 187
Box 7.7. Cordant Group: Our Guiding Principles 190
Box 7.8. Recognising and Rewarding All Forms of Capital for Optimal Performance 196
Box 7.9. Key Points to be Recognised from Danfoss A/S Profile 198
Box 7.10. The Essentials 203
Box 7.11. Beneficiaries of Novo Nordisk Surplus 207
Box 7.12. Key Points Which Differentiate the Bosch Entity from the Dominant Corporate Governance Model 214
Box 7.13. Key Questions for Tomorrow’s Theory of the Firm 217
Box 7.14. Progressive Versus Prevailing Theory of the Firm – Fundamental Differences 218
Box 8.1. Reality Check Before Beginning the Journey 222
Box 8.2. Leadership Enlightenment as a Bottom/Middle–Up Phenomenon 226
Box 8.3. Key Insights and Responsibilities of the Progressive Leader 227
Box 8.4. Progressive Firm Leadership – What Is Possible from Where You Are Standing In the Firm 232
Box 9.1. ‘Sober’ Progressive Leadership Realities 242
Box 9.2. Core Components of Communication Script(s) to Emphasise a Change in Logic 244
Box 9.3. Meetings: Operationally Embedding the Progressive and Psychological Logic 247
Box 9.4. Action Points to Embed a Progressive, Psychological Mindset Firmwide 251
Box 9.5. The Ebb and Flow of Responses at the Firm’s Apex 254
Box 9.6. Responses at the Apex to Core Operational Components of the Progressive Logic 255
Box 9.7. Psychological Stealth and Tactics Towards ‘Conversion’ 257
Box 9.8. Phase 1 – Objectives of Evolutionary Infiltration of Progressive Leadership 258
Box 9.9. Phase 2 – Objectives of Evolutionary Infiltration of Progressive Leadership 260
Box 9.10. Phase 3 – Objectives of Evolutionary Infiltration of Progressive Leadership 262
Box 9.11. A Pragmatic Approach to Progressive Inculcation Within the Firm 265

Preface

Whilst outwardly exuding an air of confidence and competence I, like many others, have for long recognised that there was some deeply embedded factor, silent and hidden to many, yet not all, creating a fog of confusion within the firm, acting as a significant drag factor on operational effectiveness and the attainment of optimal firm performance. The result has been that perspiration, persistence, silent acquiescence and a determined, if often blinkered focus, rather than an understanding of and consensus on firm purpose, guiding principles and priorities, have largely been the primary determinants in achieving firm targets, objectives and career progression. Any efforts to address this drag factor by one or a number of individual leaders, whilst often instinctually and widely acknowledged as overdue, were consciously or subconsciously viewed with suspicion and fear, if not belligerence for their potentially negative career implications.

My previous books have fleetingly alluded to this apparently immovable and embedded operational leadership blindspot. However, after some decades as an operational manager and leader within a variety of national and global firms, aided by scholarly research, I have in this text sought to question and undermine the purpose, principles and perspectives which continue to support a pervasive logic which I consider to now be wholly dysfunctional within the twenty-first century business context. This dysfunction, in my view, has ultimately not only consistently created a severe negative impact on optimal firm performance and survival but also on socio-economic growth and well-being.

I therefore write this book as a means of readers achieving a short cut to relevant reflection and commitment. By this means, it is my intention to achieve a re-orientation in cognitive priority towards a more enlightened, progressive and psychologically focused leadership mindset in this dynamic twenty-first century business and socio-economic context. It is my hope that this will ensure more contextually relevant leadership insight, perspectives and priorities going forward, evident more during the front rather than the back end of future leaders’ careers.

Acknowledgements

Many individuals have contributed to the moulding and creation of this text, but a select few have been instrumental in its initiation and/or completion.

In terms of the broad multi-disciplinary content of this text I must acknowledge the disparate contributions of a number of highly distinguished scholars and practitioners whose inspiring and insightful work I utilised to weave a solid foundation for my “progressive” theory of the firm and leadership logic. In particular I must thank Sandra Waddock (Galligan Chair of Strategy, Carroll School Scholar of Corporate Responsibility, Professor of Management), Margaret Blair, (Professor of Law, Emerita, Milton R. Underwood Chair in Free Enterprise, Emerita, Vanderbilt Law School), Lorraine Talbot (Birmingham Law School, Professor of Company Law in Context), Dominic Barton ( Canadian Ambassador to China, formerly Global Managing Director, McKinsey & Co.), George Loewenstein (Herbert A. Simon Professor of Economics and Psychology in the Social and Decision Sciences Department at Carnegie Mellon University and director of the Center for Behavioral Decision Research) and George Ackerloff (university professor at the McCourt School of Public Policy at Georgetown University and Koshland Professor of Economics Emeritus at the University of California, Berkeley). These are all progressive leaders and innovators in their respective fields

In respect of those individuals and business organisations which expended the time and energy to furnish me with permission to quote from their published material, when others were more circumspect, if not mercenary, I particularly acknowledge the Harvard Business Review, Trine Kiar at Danfoss A/S, Scott Dille at Novo Nordisk A/S and Christian Mostrup at the Novo Nordisk Foundation.

I must of course thank Emerald Publishing for their professionalism, advice, guidance and kindness over the last three years. I thank Niall Kennedy, my commissioning editor, for so clearly seeing the wood for the trees and agreeing to commission the text. However, I must in particular thank Aiswarya and her predecessor Sheena for patiently and expertly responding to a constant stream of and often inane questions.

Last, but not least, I must thank Iris, my companion and wife, who has expertly dealt with the world outside of my study as I drafted and feverishly re-drafted the text what appeared to be ad infinitum.