TRANSFORMATION | 04.12.2020
“Companies with a purpose have fared much better during the pandemic”
We had a Zoom chat with Stephan Fuetterer, Corporate Director of Villafañe & Asociados Consultores, to discuss how CEOs have changed over the past few months, immersed in frantic decision-making in a difficult environment for people and organizations. Empathy, of course, but also purpose, creating value for all stakeholders, ESG (environmental, social and corporate governance) criteria, reputation and risk planning are, in this expert’s opinion, what make a good leader. In the risk management scenario, MAPFRE prioritized that it would contemplate a pandemic context in addition to the ethical shield and human dimension of its Chairman and CEO, Antonio Huertas.
What has this pandemic meant for leaders, how have they changed?
The pandemic has been a brutal lesson for all leaders and they were almost thrown in at the deep end. It was a new situation for everyone and only companies with the capacity to foresee this situation within their risk management had the room to act better. Within its analyzed and expected risks, MAPFRE considered the pandemic risk, thus giving it the ability to react in the different countries. Forecasting capacity is important in order to be able to establish effective plans aimed at the different stakeholders. Companies that did not plan for this had to improvise.Larry Fink of Black Rock explains that companies with a corporate purpose have done quite well during the pandemic, and those that did not have one have certainly found their purpose. This had already been mentioned in August 2019 by the Business Roundtable (a US nonprofit association composed of executives from major companies): The focus has moved from shareholder value to stakeholder value. This “tsunami” came when companies were already aware of this.
Good leaders will remain good leaders and those who were not good have had to learn a lot. Only seven months have passed since the pandemic was declared… It has been a very tough test for all leaders.
It has changed everything, the notion of time, schedules and planned strategies…
The schedule was very tight, but now it has changed for everyone. Many decisions, far more critical than ever, have had to be made very quickly.
In your view, is it digitization that has experienced the greatest acceleration due to COVID-19?
Many companies have had to squeeze their digitization plans for the next three or four years into months. Decisions to implement digitization have been accelerated for all companies. Workers have had to adapt quickly to the tools, organization, video conferencing and so on and this rush means that we need to make sure we’re more aware that even if our office is at home, we do not live in the office. The hardest thing to change is always habits. Some companies have had to establish a virtual meeting routine for teams. We have many one-to-one meetings, but getting together is important to “feel like a team.” Antonio Huertas has done a great job at MAPFRE. He has a large ethical shield and has personally shared weekly videos as the very hands-on leader he is, showing what he is doing, and that first and foremost he is a person. I really like leaders who are people as opposed to executives.
Has there been a shift toward more empathetic, more social leaders who are more genuinely concerned about people?
Leaders always need to be empathetic and understand what people expect. This is what allows them to react and meet expectations at all levels: internally, with clients, with providers, society in general, with the Public Administration, with regulators and so on — with all interest groups. This skill requires active listening, which is what generates empathy and action plans can be developed from there. The social aspect has had a very strong impact. In the past, we released a leadership manual that compiled exemplary behaviors from different types of leaders. Some of them appealed to emotions. They conveyed concepts like love. The time has come to make people, including children, understand that the situation is complicated on an emotional level, this is very important.
“The formula for reputation is reality + recognition: First, things have to be done well, then people might value it”.
Does the move from more executive to more emotional leadership require a change in discourse?
Leaders have to be dedicated to managing efficiently. Talking about things other than business and the organization is important, but they need to be careful, because they risk falling into unwarranted tones or populism. Leaders have to manage while keeping all stakeholders’ expectations in mind and paying attention to all of them. These type of leaders were already around, such as Richard Branson and Kike Sarasola, who were different long ago. But that’s not enough; increasingly social objectives must be achieved. If you’re different, that’s okay. But if you do so quietly, you may not be recognized, but achievements will endure and result in a better reputation. The formula for reputation is reality + recognition: First, things have to be done well, then people might value it.
Are we facing a permanent change in how we lead?
This is the perfect social storm. What we saw from the Business Roundtable joined forces with this pandemic, and everything turned upside down. Companies need to remain profitable, but that fits perfectly with sustainability policies. Co-responsibility, for example, is a method that has been reminding people of the importance of sustainability and the importance of conscious leadership for 15 years.
Do you think the concerns today are actually focused on ESG (environment, social and good governance)?
ESG is more tied to methodology. Previously, we talked about the general umbrella of social responsibility. Now everything is organized and we can act on it more methodically. The change is here and it is a result of things moving forward and it’s going to continue. All of humanity is being hit hard and we’re all going to learn from it. Consumers are demanding a change in behavior.
In the coming years, do you expect more leadership or one that is more uniform?
I believe in systemic leadership, which means supporting your team and being a good example in the collaborative behavior of the organization. There are a lot of multinational companies that maintain tremendous hierarchies, where “going over the manager’s head” is not allowed. Neural organizations have changed things a bit, so have internal social networks that encourage participation by people who are 8 or 12 levels from the leader. These methodologies facilitate systemic leadership. There will be new ideas, but people and businesses have to change habits. Without necessarily breaking from what was previously achieved, however. Coffee comes to mind. Who thought to turn it into a drink? A berry on top of the mountain, gathered, peeled, soaked, dried, roasted and ground… There’s always someone who comes up with a process, but then there is someone who grinds it and gets the brew. Things get to that stage in companies as well, incorporating new ways of doing things or implementing things that they were afraid to proceed with, but respecting what was done before. The people who want to go crazy and reinvent everything make mistakes.
“Positive action is rewarding and promotes a good reputation, influences sales and achieves greater leverage in the media, among many other things”.
Could you share some significant moments that have come up in your coffee breaks?
I’ve been paying attention to amazing leaders for a long time. The theme is internalization. When certain leaders internalize, they change their management model. I’ve met several who’ve received coaching and have even studied it. You see them before, giving orders, focusing on the numbers (“if it’s not an account, it doesn’t count,” they might say). And after internalization processes, they would understood the importance of empathy, listening, managing expectations, diversity, each of their contributions and the different ways of offering encouragement among other things. This led to a change in them and their leadership evolved for the better. For some leaders, it comes naturally and others have to learn it. That click of internalization is necessary for positive leadership. It’s when they start learning again. There are many managers or presumed leaders who think they already know everything, and they are the ones who tend to disappear.
When many workers are struggling, seeing cutbacks and uncertainty around them, will those leaders who resist, defend, reinvent, shape and transform be rewarded?
It’s clear that they are. We’re doing research in Spain and Latin America and the answer is that the organizations’ employees and providers appreciate those efforts and their leaders more than before. Positive action is rewarding and promotes a good reputation, influences sales and achieves greater leverage in the media, among many other things. Research has shown this.
When will things be normal again?
How is it possible that we stopped talking about the Spanish flu and didn’t know much about it? It came and went, it stopped being news after a few years. I think this will fade away after two years. In the meantime, I would like to emphasize that today’s businesses want to do things right, they want the stakeholders to be well and they truly care. Let’s see if we’re changing and what will come!