Thinking The Unthinkable for Davos Wo/Man ( 17 January 2017)

Leaders and leaderships meeting in Davos for this week’s World Economic Forum face a huge new struggle for credibility. It is of a scale and speed none have ever had to confront. Most are quietly overwhelmed and scared.

In recent months, public anger and scepticism have confirmed that the old assumptions and models on which leaders and their systems relied are broken and discredited. The new acute vulnerability from this scale of challenge and questioning is identical for leaders at the highest levels in both the public and corporate sectors.

Even before the shocks of Brexit and Trump, many top leaders had confided anonymously not just their apprehension, but how scared they had become.

The candid revelations were made to our ongoing two-year research project, Thinking the Unthinkable. The 3000 pages of transcripts we compiled from confidential interviews with leaders confirm how much they - and those who work for them - feel overwhelmed. Public expectations fuelled by social media make things worse.

We set out to discover if leaders have the new skills and human capacity to adapt what is needed to lead a company or government through uncharted waters that are changing so fast. One major global corporate CEO warned of how leadership’s failings to grip the enormity of change were creating “angry consumers and citizens”. This in turn is even creating an existential threat to corporates.

At the start of 2017, it is fuelled by the even greater scale of uncertainty. This is created both by what the new US president is signalling will happen after 20 January, and the growing fears that an unprecedented process started by the UK’s Brexit vote will be multiplied across Europe. If the voters of France, Germany and the Netherlands reflect the determined views of a majority in the UK and Italy, will the European Union and all it represents be imploding by next November?

The President elect’s sudden direct pressure via Twitter on US manufacturers to locate expansion of production within the US is another ‘unthinkable’ to be reckoned with. Suddenly established procedures have apparently been suspended! How to second guess a President’s tweeted 140-character political diktat? How will enfeebled and neuralgic leaderships handle such new realities? Few dare express self confidence. Behind closed doors, the reality is the opposite.

Before June 2016, an enlightened minority had already revealed to us they knew that they and their systems must recalibrate themselves. Paul Polman, CEO of Unilever, was a lone public voice. Small numbers of other top executives agreed, but only from behind the backs of their hands.

Instead, the vast majority have been in denial. Most are reluctant to accept our main finding: the conformity that qualifies leaders for top executive office by and large disqualifies them from appreciating the enormity of the threat to all they assume from the new, if ill-defined normal.

This year’s WEF in Davos raises expectations for embracing the issue. After the Trump election, this annual gathering was quickly re-titled ‘Responsive and Responsible Leadership’. But how brave will speakers, panellists and delegates dare to be in a semi public forum? One frustrated head of a strategic partner company told our study: there is no will to accept or discuss publicly the true crisis scale of the existential threat to leadership. Reputations and careers are at stake.

Yet there is acute urgency. Most of the “provocative, head-spinning” threats detailed in the Atlantic Council’s new “Top Risks for 2017” would have been unthinkable even a few weeks ago. “Our purpose here isn’t to lay out destiny, but rather to raise warning flags for global leaders and policy makers about dangers that in most cases can still be reduced or managed”, wrote the council’s President and CEO, Fred Kempe.

But will these even be acknowledged in the risk registers and back channels of corporate systems or government policy-making that lead eventually to the top ministers and C-Suite executives? Based on our research findings the answer is quite likely ‘no’.

In a vast spectrum of examples since 2014, we have discovered how similarly ‘unthinkable’ risks have been deemed by those at the top to be too unpalatable to be considered. So they have either been marginalised or not even posted in registers.

Yet the costs of failing to act on the unpalatable are huge. President Putin was not taken seriously after he warned several times that Crimea should one day be part of Russia. The UN High Commissioner for Refugees, and the International Organisation for Migration were ignored after they warned for two years of the massive migration threat to Europe. What was it about the organisational culture within VW which apparently meant there was no internal challenging of the diesel exhaust ‘defeat’ systems which were designed to knowingly deceive both environmental regulators and consumers?

Too often insiders have revealed to us their fears about the professional costs of being open and honest in policy assessments delivered to top leaders.  Conformity has usually prevailed, with deep fears that anything not viewed as politically correct would be a “career limiting move”. The institutional obstacles to the need to “speak truth to power” was at the heart of the recent shock resignation of the UK’s ambassador to the EU, Sir Ivan Rogers.

As a result, routinely those at the top would usually receive what they want to hear, not what they need to know, however uncomfortable. As one very senior executive told us: any failure to deliver in this way meant “you get your legs chopped off”, with your career ended for not conforming.

Yet the new unthinkables are at diametric odds with conformity. “How do I create mavericks in a company which survived over decades by crushing mavericks,” asked one CEO who was realising the cost of conformity to his major corporate in the new world of uncharted turbulence.

In our search for positives, many senior interviewees confirmed that what is needed is a change in culture, behaviour and mindset. A new courage and humility will go a long way to revitalising credibility, including four words that never come easily to those at the top; “I just don’t know”.