Latest / C-Suite Perspectives / Why the Best CEOs Act as Catalysts, Not Commanders

Transcript

Why the Best CEOs Act as Catalysts, Not Commanders · C-Suite Perspectives

0:00
Transformation is how do you reinvent the business for the future
0:04
to make sure that it continues to stay ahead of customers' needs?
0:08
The CEO literally has to be at the center of the pyramid enabling all the
0:13
pieces of the pyramid versus thinking of themselves as being at the top of it.
0:17
This is a new book that you've written called The CEO Catalyst, and the central
0:21
thesis of this is that the traditional command-and-control model doesn't
0:25
work, which I think a lot of CEOs and other business leaders figured out.
0:31
Things have really rapidly changed, making that even more obsolete.
0:34
Talk about the book and the thesis and what led you to write this book?
0:39
It's interesting Steve, we have been hearing, as probably you have over the
0:43
last couple years, the repeating drumbeat from CEOs and boards of companies around
0:50
the world that they need to transform how they work, in light of not only
0:55
all the technological changes going on, but all the geopolitical changes and
1:00
economic changes and everything else.
1:02
So we thought it was a good time to actually talk to CEOs who've
1:07
driven successful transformations to try to figure out how they did
1:10
it, what the pitfalls are, and how others can learn from that.
1:14
Yeah, now Russell Reynolds does wonderful search work.
1:17
That's where you started.
1:18
You build boards, you build management teams, you hire CEOs for companies.
1:22
You do a lot of consulting back with those clients to help them build
1:27
their team but also effectively lead.
1:29
And so it came through that work that this was a need and
1:33
transformation needed to happen, right?
1:34
It did, exactly.
1:35
Our business is a mix of search work and consulting work, and we have a
1:41
growing practice around transformation and how do leaders need to adjust their
1:46
organizations, how they think about the leadership agenda, how does the
1:50
C-Suite move a transformation forward?
1:53
It all fits together very nicely.
1:54
Yeah, and transformation sounds like a big word.
1:56
It's a long word.
1:57
Essentially, in order to move forward, in order to grow and adapt, you have to
2:01
transform, even if it's a small thing.
2:03
Transformation sounds like you're going to turn the company upside down.
2:06
It's not just that, but it's how do you lead your company for growth?
2:10
Exactly, and sometimes transformation honestly is an overused word.
2:13
We like to distinguish between turnaround and transformation, right?
2:17
Turnaround means you're in trouble and you gotta change something fast.
2:20
Transformation is how do you reinvent the business for the future
2:24
to make sure that it continues to stay ahead of customers' needs?
2:28
One of the things that you say in this, which I think was a really interesting
2:32
point, you say, "A great CEO's job is not to be the source of all the
2:36
answers. It's to build a leadership system that produces better answers
2:41
than just the CEO alone could provide." It seems like ABCs, but it's not.
2:47
It seems like ABCs, but the reality is that image that boards of directors have,
2:52
that the C-Suite has, sometimes the CEOs themselves have as being the ones with
2:56
the answer, being the deciders, being the commander-in-chief, so to speak, continues
3:02
to exist both in practice and in theory.
3:05
And the reality is that we believe that the most effective CEOs are
3:11
actually catalysts of the conditions for success for the company.
3:16
And ultimately, if the catalyst CEO can enable the company to
3:21
transform into function without them being there, that's even better.
3:25
Yeah, because the good old days of the CEO having all the answers is just silly.
3:29
These companies are too complex or multiple divisions.
3:32
Your geography is spread out.
3:34
Why, as a leader, would you ever just count on what's in your head
3:38
and what you've experienced versus relying on the experts around you?
3:42
Yeah, not only are these organizations complex, but the amount of issues on a
3:48
CEO's desk today and the speed at which they're changing is faster than ever.
3:53
I get asked this question all the time, "Is the CEO's job harder,
3:56
really harder today than it was, say, 10 or 20 years ago?" You probably
4:00
have a perspective on that as well.
4:02
But I would say the sheer number of topics on the CEO's desk and the
4:07
rate of change at which they have to take them in and figure out where
4:11
they're going has never been heavier.
4:14
Yeah, and it's a multi-constituency world.
4:17
Customers, employees, owners, CEO, by the way, customers, employees,
4:21
owners, community, environment.
4:23
So all of these things have to be dealt with, and that's more complex
4:27
than just saying, "I'm going to take care of my shareholders."
4:30
It is.
4:31
Multiple stakeholders, and multiple stakeholders with
4:35
changing agendas and priorities.
4:38
Yeah.
4:39
It's interesting that the CEOs who are the best at this seem to be the ones that have
4:44
self-awareness and humility because if you are self-aware, if you're humble enough
4:48
to know that you don't know everything, then you do lean on people around you.
4:53
But that's not necessarily an innate factor.
4:56
It's not.
4:57
It's a coachable factor, but it's not an innate factor.
5:01
And then you add in the increased importance of flexibility, of resilience,
5:07
of adaptability in this current situation, and all those things make
5:12
an interesting cocktail, so to speak, of the skills that a CEO needs today.
5:17
Maybe we're just all getting older, but it seems like everything's going
5:20
faster, but the world around us is changing at a more rapid pace.
5:25
We talk about black swan events, and that used to be once in a
5:28
lifetime, and now they're happening every few years, it seems.
5:31
So all of this is part of what comes at you and the need for leadership change.
5:38
Yes, and it also is the need for creating a continuously transforming platform
5:45
within an organization to be able to adapt to all those changes, to all those issues.
5:49
And that was one of your points, that not only can a CEO not think every
5:52
thought that needs to be thunk, but also can't lead every bit of this.
5:57
You need a team around you to lead the transformation, to effect it
6:00
through an organization as well.
6:03
Yes, and to your earlier point, you've always needed a team around you to
6:06
manage the organization, but now it's the complexity of the environment means
6:13
that the CEO literally has to be at the center of the pyramid enabling all the
6:18
pieces of the pyramid versus thinking of themselves as being at the top of it.
6:21
Okay, so the word that we used to use was empowerment.
6:24
You need to empower your teams.
6:26
But so many people treated empowerment as abdication.
6:30
Talk about the difference and why what you're saying in this
6:33
book is different than that.
6:35
Yeah.
6:35
So empowerment can lead to effectively leading an organization, but it could
6:41
also lead to abdication, as you say.
6:43
But what we're talking about is not effective leadership.
6:46
It's about rethinking the core of the business, and you need the proper system
6:53
of contributors to do that, of cascading capabilities within the organization.
6:59
You know as well as I do, all of these things are interlocking
7:02
within an organization.
7:03
So if you're going to empower people to go do their own thing,
7:05
that doesn't bring them together to actually move the system forward.
7:10
Yeah.
7:10
Now, you're the CEO of a very large global company yourself.
7:15
So you're not only advising boards and CEOs, that's not
7:18
only part of your practice, but you live this every single day.
7:21
And you're a private company, but you have a board.
7:23
That displays some self-awareness, and good for you.
7:28
Since our founder Russell Reynolds created the firm over 50 years ago,
7:32
he thought it was important for our structure and our governance philosophy
7:37
and our management philosophies to mirror those of our biggest clients.
7:42
We, actually, as a private partnership, have a board of directors, which
7:44
is rare but extremely valuable.
7:46
Yeah, and you have to be a little selfless and self-aware in order to listen to them.
7:51
I know you do.
7:51
But look, when you don't have to have a board, you do.
7:53
That says something.
7:55
But it also says, this is the kind of leadership which is really
7:58
important, and the results have been stellar as a result of this practice.
8:02
So you live it every single day.
8:04
We have a lot of pride in the work we deliver for our clients.
8:07
And I just leave it at that.
8:09
Yeah.
8:09
Okay.
8:09
So CEO's Catalyst is the title.
8:12
Call it the Catalyst model.
8:14
That, you know, that would be a luxury to be able to do this
8:18
and everything's going well.
8:19
How does it work in a crisis?
8:22
That's a great question, Steve.
8:24
It would be hard for you and me to find any transformation that
8:27
doesn't hit a brick wall 12 months in, 18 months in, or some sort of
8:33
crisis, unexpected crisis erupts.
8:36
The advice that we got there in doing the research for the book was to do
8:40
what some people would think is the opposite of what would be expected.
8:44
Not power through the crisis, but actually take a step back, regroup,
8:49
pause activity, understand why the crisis is occurring, take responsibility for
8:55
that, be open and transparent about lessons learned from that, and then
8:59
use that to regroup and move forward.
9:01
It sounds like most of the same steps and the same processes are important
9:09
whether you're in a crisis or not.
9:10
In other words, you can't just think every thought, you can't just be a
9:13
dictator, you really do need to involve your teams and all of those things.
9:18
Speed may be the one difference?
9:20
Yeah, I think speed is one of them, but you're right.
9:22
The thread is humility, a willingness to admit mistakes, and to regroup and
9:30
to change course if conditions warrant, which isn't always easy for a leader.
9:34
No, it's not, especially, if you're on a burning platform, command
9:37
and control is very efficient.
9:38
But then you go to your next point, which is it has to be effective.
9:41
It has to be implemented, and if you don't have the hearts
9:44
and minds of the organization, you're not going to get it done.
9:47
Yeah.
9:48
Our research found there are three kinds of inertia that plague
9:51
organizations seeking transformations.
9:53
There's action inertia, there's psychological inertia, and
9:57
then there's insight inertia.
9:59
And insight inertia is related to actually what is the case for change.
10:04
Psychological inertia is how people naturally try to snap back to the
10:08
status quo, how do you prevent that?
10:10
And action inertia are the execution snafus that you run into.
10:14
And overcoming each one of those is critical to actually transform.
10:18
It's interesting that you say the snap back piece, because
10:22
that's part of culture.
10:23
People say, "Oh, just change the culture." Yeah, okay.
10:26
It's easier said than done.
10:27
But it is that snap back piece, because people devolve back to
10:30
routine and what they're used to.
10:32
Part of any transformation, we're doing this for the long term.
10:35
We've gotta stick with it.
10:36
You've gotta continue to drive it, right?
10:39
As a leader you're saying it for the 10th time, you go, "Okay gosh, this
10:42
isn't working," that's when people are hearing it for the first time.
10:45
And so you really have to have a lot of stick-to-it-iveness.
10:48
Yes.
10:48
It's not a word, but.
10:49
You have to.
10:50
Every CEO we interviewed for the book said they personally were exhausted by how many
10:54
times they had to repeat the same message.
10:57
It's the old cliche.
10:58
You have to say it any number of times for people to pick up on it, but the
11:02
reality is that's what you have to do.
11:03
And a lot of people say okay, if it's not resonating, I'm not seeing the
11:06
language show up in the organization, I must have to change it again," when
11:10
in fact you need to stick with it.
11:13
I think that's absolutely right.
11:14
Is there any time, or can you give us any examples where the
11:18
CEO's catalyst doesn't work?
11:27
No.
11:27
I don't think there are any situations where the Catalyst CEO
11:31
would not be the best solution.
11:33
Yeah, because, regardless of how dire it is, you still have to move
11:36
the organization along, right?
11:38
Yes.
11:39
You have to, and you have to bring everyone along with you
11:42
to achieve the stated goals.
11:44
Yeah.
11:44
No matter how dire the situation and so forth, as a leader,
11:47
you can't do it by yourself.
11:49
I and I think that's your point.
11:50
It's an important one.
11:51
Yeah.
11:51
Yeah.
11:52
And related to that, Steve, you alluded to it a little bit, which is culture.
11:56
Culture is such a critical operating system for driving a transformation.
12:01
And bringing that culture along, bringing everyone along in that culture in order
12:07
to really make the transformation stick.
12:11
The book is going to be out in September of 2026, and they can buy
12:14
it anywhere books are sold then.
12:16
All right.
12:16
We're going to look forward to that.
12:18
Constantine, what role does the board of directors play in the CEO Catalyst?
12:25
Look, they play a very important role because they need to buy into the
12:30
transformation vision and the plan for the transformation, and ultimately they need
12:35
to be cheerleaders for the transformation along the way to shareholders, to
12:40
other stakeholders, to customers, and to the leadership team as well.
12:44
Board endorsement, board support is a critical part of having the
12:50
CEO be a successful catalyst.
12:52
And the board is part of the team.
12:54
You can't have a board sitting on the outside, being the judges with
12:57
numbers that they hold up on a score.
12:59
They have to be right in there with it.
13:01
Yeah.
13:01
They're not operationally responsible for the transformation, but they're
13:05
responsible for the direction.
13:06
They gotta be in the boat and be part of this.
13:08
That's an important point for boards of directors or people who are on
13:10
boards to think about through this, that they have a role to play in this.
13:15
Constantine, you can't pick up a newspaper or watch any kind of show without
13:18
hearing AI over and over again, and it is consuming the world at the moment.
13:23
What role does AI play in any of this?
13:26
On the flip side, how does AI create the need for transformation?
13:33
So AI is changing every single job description, Steve,
13:37
including yours and mine.
13:39
And that is a bit of the spark for the transformations that many
13:44
organizations are undertaking.
13:47
As I said at the outset, the difference between turnaround and
13:49
transformation, companies undergoing transformation doesn't mean that
13:53
their results are poor or that they're having problems delivering what they
13:57
need to deliver for their customers.
13:58
But the advent of AI has prompted them to realize that there are
14:03
new ways of working, new ways of finding opportunity to serve
14:08
customers, and new ways of finding efficiencies within the organization.
14:12
So AI's a big part of this, and it's spurring the need for the
14:19
catalyst CEO because of the speed at which things are changing.
14:22
Yeah, because it's more than an app.
14:24
At some level it's software, right?
14:25
Ones and zeros, and it's an app or a multiple apps that you buy.
14:29
On the other hand, in order to implement this, you need to change
14:33
workflows and processes, and hence, it may be it's transformation with
14:37
a big T depending on what you're doing, but it could be a small T too.
14:40
But that deliberateness on work processes is really important.
14:44
Yes.
14:45
Like I said, every single job description is changing, which means every work
14:50
process is going to change, much like when the PC came into the workplace.
14:55
Yeah, and you talk about this in the book, that AI is one of the forces that
14:59
makes transformation really urgent, which kind of leads to another question.
15:03
So if you're a leader, we talked a lot about CEOs, but it's leadership
15:06
in general, no matter where you are in an organization because it's
15:10
the principles apply regardless.
15:13
But how do you know when a transformation is necessary?
15:20
So I think many of the transformations we're seeing today
15:23
are transformations by choice.
15:25
In other words, seeing that there is potential opportunity in reinventing
15:31
the business, seeing that in order to mitigate risk for the future, in order
15:36
to protect against new entrants that are being accelerated by the advent of
15:41
AI, that the company, to sustainably succeed in the future, needs to transform.
15:48
So it's not so much transformation by necessity, but transformation by choice.
15:53
And at some level, transformation is another word for change.
15:57
And change is necessary to do something different.
16:00
Definition of insanity is doing the same thing over and over again
16:03
and expecting different results.
16:04
Okay, so everybody wants to grow.
16:06
That's change.
16:07
If you want the top line to move up, that's change.
16:10
And so therefore, you have to do something, unless you're blessed
16:13
with a trend that's going to carry over year to year, or you
16:17
have to do something different.
16:18
And so therefore either it's every year it's some level of change and
16:23
hence some level of transformation.
16:25
In the environment we're in, Steve, most successful companies are going to be in
16:29
a cycle of continuous transformation.
16:31
And enabling that within the organization is the key part of what
16:35
we're trying to get to in the book.
16:38
It's interesting.
16:38
People used to think about the strong leader as the person who
16:42
would stand up and, it's kind of the military model, right?
16:45
Where the senior officers will give the orders and you don't
16:48
question them, you just do.
16:49
And frankly, the modern organization came out post-World War II out
16:53
of the military organization, and there was a lot of that at the time.
16:56
This completely evolves.
16:58
Today it's a different world.
16:59
But what you're contributing here is that whole deal is over.
17:03
That that has run its course.
17:05
It's not working.
17:06
It's not right for the pace of exogenous change that is happening to us.
17:11
It's not like companies have a choice here or organizations.
17:14
You have to do this if you're going to survive and thrive.
17:17
That's exactly right.
17:18
And it doesn't mean that the CEO's role is any less than it used to be.
17:22
The CEO's still responsible for setting the strategy, for setting the tone of the
17:27
company, for helping enable and set the conditions for its success, but it's not
17:33
about them commanding the success of the company and the operation of the company.
17:38
And thinking every thought.
17:39
You talk about strong leaders, weak leaders, and that used to be
17:43
judged by some stereotypical things.
17:46
How forceful is this person?
17:47
Can they run the business?
17:48
Can they run it?
17:49
Can they be decisive?
17:50
Can they give orders?
17:51
That used to be a strong.
17:52
And the weak ones were the ones that asked for input, right?
17:55
And what you're saying is it's actually the other way around.
17:57
The strong leaders are the ones that ask for input and is a catalyst
18:02
and uses the resources around her.
18:04
And are able to take a step back and see their job as being one of enabling
18:10
the success of the team around them versus driving the success of the team.
18:16
Yeah, but you still have to lead, though.
18:17
People want leadership.
18:19
They want to know where to go.
18:20
And by getting consensus from your team, that's okay because
18:24
then you've got more followership.
18:25
It's inspirational at that point.
18:28
Yes.
18:28
It doesn't have to be all about consensus but it does need to be about collaboration
18:33
and working effectively together.
18:36
Okay, so building on that then, there used to be all these assessment
18:40
tools where if you had these specific personality traits or something, then
18:45
you were going to be a good leader.
18:47
You can't do that anymore in this kind of environment, but there are
18:51
some characteristics of great leaders.
18:54
You talk about this in the book.
18:55
Yes, and there's always been a set of characteristics of great leaders,
18:59
but at different times in history, some of them rise to the top, and
19:03
some of them fall to the back.
19:04
The ones that are rising to the top now are adaptability, resilience,
19:10
self-awareness, an ability to project a mission and a purpose and
19:16
to galvanize the teams around that.
19:19
It's those sort of softer skills that have always been part of the batch of
19:23
skills, but are really rising to the top.
19:26
Yeah.
19:26
If we have listeners who are either in an organization deeply or at the
19:32
top of an organization, and they look around them, and they go, "Yeah, I need
19:35
some change here," how do they start?
19:38
The first thing to do is to really build the case for change, obviously, right?
19:44
Through listening, through projecting what the markets are doing, through
19:49
thinking about the possibilities that new technologies pose, actually
19:53
crafting the case for change that others will be able to buy into and use as
19:58
a foundation for the transformation.
20:00
And build the case for whom?
20:02
Build the case for each other, really, and the stakeholders.
20:05
That will include the board at some point, that will include customers
20:10
at some point, but it starts with the employees and the leadership team.
20:13
Really interesting.
20:14
This is a really important point that you're making because you've
20:17
gotta get everybody aligned to what the issues are, right?
20:22
And what the opportunities are.
20:23
Oh great.
20:24
But before you jump to, "Here's the solution," right?
20:27
You've gotta get people aligned about what are we trying to accomplish?
20:31
What are the objectives here?
20:32
And why?
20:32
What does it mean for us?
20:33
Yeah.
20:34
And then you have to build the case about what's in it for them too, yeah?
20:37
Exactly.
20:38
That's the only way to get them to own the change themselves.
20:43
Now, one constituency we haven't talked a lot about are shareholders
20:46
or owners in a private company.
20:49
How do you build the case for them when you're thinking about something
20:53
that maybe it's going to be costly, it's going to be a half a step
20:56
back, how do you build that case?
20:58
It's really the similar case, Steve, that you're building for employees
21:02
and for the board of directors.
21:04
It's around what is the value proposition that we want and need
21:08
to evolve to, and what will be the benefits of that over the long term?
21:13
And that applies just as much to owners as it does to employees.
21:18
Any final Thoughts that you'd like to share, good insights that are in the
21:22
book that you want to leave us with?
21:23
I think one, one thing I'd say, there's a lot of talk in the press about how
21:27
individuals are becoming more reluctant to serve as leaders of organizations
21:32
because of the complexity of the environment and the overwhelming
21:37
set of issues that are out there.
21:38
And I would posit the opposite, that it couldn't be a more interesting
21:42
and challenging time for people to contribute to transforming
21:46
organizations and to learn how to become a catalyst CEO to enable that.
21:51
Yeah, but a lot of people are afraid of the big stage and
21:56
everything's on social media and it's a lot of stress, but it's the
22:00
reward that comes from all of that.
22:02
Yes, and the reward from taking a successful organization
22:07
and future-proofing it.
22:08
Yeah.
22:09
Yeah, and working with those constituents and really helping
22:12
people create something.
22:15
Yeah.
22:15
Absolutely.
22:16
Constantine Alexandrakis, congratulations on your new book, The CEO Catalyst.
22:22
We'll look forward to reading it.
22:23
It will be out in September of 2026.
22:26
And thank you for joining us today.
22:27
Thank you, Steve, for having me.