According to Jim Collins and Jerry Porras in their classic book on business strategy “Built to Last,”based on a six-year research project, there are two different types of leaders:
– Time Tellers
– Clock Builders
Time tellers are great leaders up to a point. They are able to build companies that take advantage of business opportunities and use them as opportunities to grow.
Clock builders show the additional quality of building organizations that are able to adapt to new circumstances. These organizations are built on values that go beyond short-term profit. These values stimulate progress, often by setting audacious goals. Extraordinary leaders and entrepreneurs have managed to develop strong cultures of experimentation and organizations with the goal to always improve.
The researchers that participated in the study studied two companies in a number of industries. For example, in the power generation and transmission industry they compared General Electric and Westinghouse, in aviation they analysed Boeing and McDonnel Douglas. In total they compared 18 pairs of companies, one that had consistently been the leader in its industry in terms of growth and profitability, and that had reinvented itself more successfully than the other.
To make a long story short, the researchers found that despite the differences between the excellent companies, their founders had built their companies on a deeper understanding of their industries and managed to build organizations that function like clockwork. The excellent organizations have been able to adapt to new circumstances and all the time meet new challenges more successfully than their comparisons.
The less visionary leaders were more like time tellers. They identified great business opportunities and managed to make the most of them, but the organizations they created could not adapt as successfully to new challenges as the excellent examples.
One example: Thomas Edison, the founder of General Electric, built an organization with change built into its DNA. The company was founded in 1886 and over the past 50 years the company has produced a sequence of visionary leaders with the ability to prepare the company for the challenges of the modern age.
In the 1980’s Jack Welch took the company from being a large player in a number of industries in the United States to becoming the global leader in a number of high-growth industries.
Twenty years later Jeff Immelt continued the transformation and drove the development towards sustainability by making the technologies and products energy and resource efficient and environmentally friendly.
Entrepreneurs can learn a lot from “Built to Last,” but the experiences need to be adapted to the individual situation of each company and to the present challenges that companies and countries are facing.
In the present day and age there is an additional aspect to leadership that needs to be taken into account. Our modern society is facing a number of challenges. Entire countries, and the global economy need to become sustainable. Governments have set the goal of implementing electromobility, the use of electric vehicles, on a large scale. Many have also identified the goal to change the economy to become circular, meaning that resources will be used over and over again, in never-ending cycles.
Succeeding with these transformations will require extraordinary strategic and management skills, even surpassing those of Thomas Edison and the founders of the other excellent companies.
It is abundantly clear that countries and companies cannot successfully navigate the transformation on their own. New supply chains need to be developed with companies that together supply products and services that will become components of new resource efficient and sustainable industries.
The development challenges in terms of new technologies, products, and supply chains are so great that countries are not likely to succeed with the change on their own. It will also not be possible to transform all sectors of society at the same time. The most highly prioritized sectors will need to be identified and structured change programmes will need to be developed for each prioritized sector. Change will have to be driven athigh speed and large investments will be needed in many different areas.
The founders of the companies studied in the research programme that formed the foundation of “Built to Last” showed examples of extraordinary vision and leadership.
Politicians and business leaders that aspire to lead their countries and organizations into a sustainable future need to emulate these extraordinary leaders. The past decades have not required the type of leadership that countries and companies will need to mobilise for the coming decades. Business development in the past decades has to a large extent consisted of “more of the same,” in spite of the fact that people in all walks of life have had to learn many new things.
Since the late 20th century all industries as well as the public sector have been going through a process of digitization. This process has facilitated improved efficiency across the board. This development has been challenging, but it has not required the level of innovation and change that will be required in many industries and in the public sector in the decades to come.
New success formulas have to be developed to create a sustainable society. It is not only about improving efficiency or offering more value to customers.
Instead of approaching the transformation challenges in the way business and social development has been approached in the past, leaders need to apply split vision and see both to the need to change their own industries and countries, and to the need to contribute to the change that will need to happen to supply chains and entire continents.
There is no handbook that describes how this can be done. The leadership towards a sustainable future will need to be developed by excellent leaders in the way that excellent leaders have always developed the tools and the methods they need to build great organizations.
Excellent leaders of the past have built organizations that are more adaptable than others and great political leaders have helped their countries make leaps in terms of development, such as through the Apollo Program and the development of computers and the Internet.
Leaders need to realise that the challenges of transforming our entire society will need leadership on a new level. It will also need financing and managed change of a previously unseen degree. Countries and companies need to mobilise the resources needed to succeed with the transformation.
My latest book on innovation and the transformation to sustainability is “The Blind Guardians of Ignorance — Covid -19, Sustainability, and Our Vulnerable Future” and the first one of these was “The Transparent Market,” written together with David Lundberg. In “The Transparent Market” we discussed the future of electronic business. The book was published in 1998, when most experts still did not see that most companies soon would do business on the Internet. My first book about the transformation to e-mobility was “Global Energy Transformation” from 2009.