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Business Leaders Can Learn from Their Peers

By Christopher Hoenig

July 01, 2001 — CIO — A LEADER IN BUSINESS TODAY needs to work across all types of boundaries to be effective. National, organizational and cultural borders are all part of the leader’s domain, and many of us have become comfortable traversing them. But there is still one set of boundaries that all too often trips up leaders as they rise to the top, and that’s those among economic sectors. I find that even experienced leaders perceive high walls among the public, private and nonprofit sectors, causing them to underestimate the applicability of tools and approaches used in areas other than their own.

Yet a new standard of leadership is emerging that will destroy this last boundary once and for all. The rule in 21st century economies is that there are no true boundaries, only problems to be solved and opportunities to be captured. Future leaders will be judged on how well they can tap all three sectors to achieve organizational goals.

First, Get the Message

Elite leaders have always recognized the advantages and disadvantages of each sector and charted careers that cross sector lines. But today, no leader at any level can afford to view sectors as stovepipes, thanks to a few key trends:

• A higher standard is being set. Leadership models are changing. New leaders in each sector are being assessed for their future potential based on a broad experience mix and their ability to solve problems, not for their career track in one particular sector. Aspiring leaders who want to distinguish themselves must test their skills on a broader playing field to be acknowledged as the best.
• Public and stakeholder expectations are higher. Global corporations, governmental entities, nonprofits and even startups are now expected to accept responsibility and accountability for public, global and local political issues.
• The emperor has no clothes. Well-worn sector myths have been exposed as fiction for all but the most stubborn observers. Private sector creativity is not the sole driving force of innovation. Public sector service ethics and economies of scale have never been as beneficial as many in that sector believe. And nonprofit independence has never been as inviolate as it pretends, whether for tax or fund-raising reasons.

Second, Use All Available Means

Each sector has unique advantages and disadvantages. Savvy leaders learn from the best leaders and organizations, no matter which sector they inhabit.

• Public: Some of the best management and leadership in the world can be found where the strictest bottom line of all exists?life. Just look at the Marine Corps or the Coast Guard, which are becoming management models for American business. Government at its best is good at scale, with not only massive resources for massive problems but also people experienced at handling large, complex problems, technologies and deals; such individuals can be invaluable in large corporations with similar scope.
• Private: Entrepreneurship, startups, incubators, corporate financing, market discipline and the bankruptcy courts show the benefits over time of a portfolio approach to problem solving and the capacity for quickly mobilizing capital and resources to emerging social needs. Public and nonprofit executives would do well to study and learn from leading venture funds such as Kleiner, Perkins, Caufield & Byers or internal venture operations at companies such as Nokia.
• Nonprofit: At its best, the greatest strength of the nonprofit sector is its independence and objectivity, with a focus on the problem to be solved, not just the politics or the profits. Organizations like The Nature Conservancy and The Salvation Army have demonstrated the ability to bring techniques and resources together from all sectors to accomplish a clearly defined mission in a way that any CEO or government executive could imitate with pride.

 

 

 

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