How do effective leaders navigate global disruption without sacrificing long-term growth?

Why must today’s executives prioritize ESG and government partnerships to survive uncertain markets?

Discover essential strategies for navigating global instability from former Dow Chemical CEO Andrew N. Liveris. Learn why adaptable leadership, strong ESG commitments, and proactive government partnerships are vital for future-proofing your organization in a G-Zero world.

Ready to build a resilient organization that thrives amidst chaos? Dive into the full analysis below to apply Liveris’s battle-tested framework for driving sustainable growth and securing your company’s future today.

Recommendation

Contemporary business is complex, confusing, and disruptive, leaving leaders wondering where to find high-level guidance. Author Andrew N. Liveris is glad to offer some counsel based on his experience as the former CEO and chairman of The Dow Chemical Company, former chairman of the US-China Business Council, and trusted advisor to four US presidents. He shares his hard-earned expertise to help today’s leaders adapt and thrive. Liveris’s knowledge extends well beyond commerce. For example, he includes a telling report on how China has changed, but his business advice – urging both focus and flexibility – may be his book’s most enduring contribution.

Take-Aways

• Today’s tough times call for strong, adaptable leaders.
• Most countries and companies operate strictly for their own benefit, even during international emergencies, like the COVID pandemic.
• Businesses must care about pressing environmental, social, and governance (ESG) concerns as well as profitability.
• Leaders must take a responsible, long-term view.
• Corporate boards no longer rubber-stamp CEOs’ decisions.
• Chief executives must set goals and prepare for the unexpected.
• New CEOs should look to the future.

Summary

Today’s tough times call for strong, adaptable leaders.

The modern business world’s frightening disruptions, disasters, and disturbances require steady leadership from tough leaders who can adapt, absorb shocks, and prepare for the future.

“How can you make your business work today for tomorrow – and not yesterday or the day before?”

Leaders must provide the corporate, financial, and societal foundations to keep their organizations on an even keel while making both progress and profits. They need to develop “platforms of understanding” for their stakeholders while helping their organizations master both their immediate environment and their future trajectory.

Most countries and companies operate strictly for their own benefit, even during international emergencies, like the COVID pandemic.

After World War II, prominent nations created what came to be known as the “liberal international order” (LIO), which is anchored by enduring international institutions: the United Nations, the World Bank, the International Monetary Fund, the World Health Organization, the G7, and eventually the G8.

Today these organizations face tremendous challenges from what an environment policy expert Ian Bremmer caustically describes as the “G-Zero” world, characterized by an absence of leadership and direction. Now, countries and companies often operate selfishly – pursuing their own interests with scant regard for any other concerns. For example, when the COVID pandemic swept across the globe, no leader or country stepped up to lead an international fight against it.

As a further complication, government and business seem to be moving rapidly apart. Alarmingly, autocrats are pushing rights aside to fill this leadership gap while nations are shuttering their borders out of protectionism and a wish to keep the world at bay. As “economic nationalism” threatens the global fair trade system, society must grapple with the increasingly uneven distribution of wealth.

“Business and government don’t understand each other. People working in the public sector don’t understand business. People who work in a corporate environment only dimly understand the public sector, seeing it, at best, as a necessary evil, [and] at worst as oversized, authoritarian, chaotic, and hard to control…To form a hands-together partnership, this mindset must change.”

Your job as CEO is to protect your company, make plans, and prepare for every “conceivable physical, government, and market-based event.” CEOs need to understand that, in the modern world, a pro-business orientation requires a pro-government orientation. CEOs and government leaders should not think of a “hands-off” or “hands-on” relationship between business and government. Instead, they should encourage a “hands-together” partnership.

“Disruptive innovation” and emerging technology add to the challenging forces at play, now and in the future. For example, McKinsey & Company predicts that by 2030, automation will replace the jobs of 400 million to 800 million people.

Amid these challenges, few leaders or organizations plan and prepare sufficiently for the future. Organizations and their leaders must broaden their scope and vision beyond their traditional comfort zones to master today’s complex “multidimensional spaces.” They must pursue their immediate objectives in the context of visionary long-term goals.

Businesses must care about pressing environmental, social, and governance (ESG) concerns as well as profitability.

Formerly, generating profits was the only aspect of business that CEOs and their boards had to master. Today, leaders must also heed environmental, social, and governance (ESG) concerns under the broad banner of “sustainability.”

ESG is not what is known as “inclusive capitalism,” though it touches on similar metrics and issues. Inclusive capitalism says businesses should look beyond shareholder enrichment, that wealth distribution should become as broad and equitable as reasonably possible and that capitalism should work for everyone.

“If [ESG]…issues remain unaddressed, ‘traditional approaches to business will collapse, and companies will need to develop innovative solutions’.” (2009, Harvard Business Review)

Sustainability itself is the subject of debate. Some leaders believe climate change will radically harm the planet while others scoff at the idea of climate change and believe it has no validity.

Despite this fissure, the trend among most leaders and nations is to accept the reality of climate change. Nearly 200 countries have agreed to the UN’s Glasgow Climate Pact calling on nations to shift from fossil fuels, cut down on greenhouse gas emissions, and increase aid to the poorest countries. Today, forward-looking national leaders and business executives understand that their countries and organizations must join the fight against climate change.

Leaders must take a responsible, long-term view.

Chief executives who try to play it safe assume they can control the future. This is a delusional belief. An infinite number of variables can generate problems for CEOs and their organizations.

“[Today] slow is fast; faster whizzes by; and the fastest lane of all nears Formula One speeds. Ambling along isn’t an option…You’ll get clipped or rammed or run over.”

Further, in today’s disruptive environment, playing it safe doesn’t make sense. When you focus only on your own lane, you miss everything important that’s going on in all the other lanes. Corporate leaders should focus on far more than their shareholders’ short-term financial gains. Short-term thinking is a severe liability for any business leader.

As CEO, set firm goals for yourself and your firm. Complete two of these goals, then move on to the next two goals and complete them. Follow this pattern for all your subsequent goals.

Corporate boards no longer rubber-stamp CEOs’ decisions.

Corporate boards are not what they used to be. Most boards are far more engaged with their companies’ day-to-day business than they were – or had to be – in the past. Many modern boards have become more activist. Though boards still hew to the priority of shareholders’ “baseline enrichment,” they are increasingly aware that they must also serve the needs of numerous diverse constituencies.

“Establishing an activist board is minimum table stakes for any enterprise doing business in this century – and sets the stage for an even more advanced, effective model…the enlightened board.”

In the past, you could describe many corporate boards as “country club” boards. Individual members often had little or no knowledge of the business or industry they were advising, so their boards pretty much rubber-stamped the CEO’s interests.

The relationship between boards and chief executives has changed dramatically. Since the late 1990s, the internet and the media, particularly the “financial cable news ecosystem,” have exposed the actions and internal operations of corporate boards. Reporters often reveal board members’ conflicts of interest, transgressions, and mismanagement. As CEOs adjust to these circumstances, they no longer seek subservient board members. Instead, they need knowledgeable directors who can challenge them and provide trustworthy guidance for their corporations.

Chief executives must set goals and prepare for the unexpected.

Strategizing is tough in a turbulent world. Leaders must be prepared to deal with unforeseen complications. While experienced leaders may believe they’ve seen everything, something totally new is always on the horizon, so they must stay flexible enough to deal with surprises.

Top executives must be future-oriented and understand that what worked yesterday or even today will not work tomorrow. They can’t glide along with a calcified “we’re doing fine” mentality. Looking back on your former achievements and using them as guidance for the future isn’t productive. While profiting from your previous positive actions is your due as CEO, the benefits that derive from a great track record always have a short shelf life. Relying only on your track record may trick you into complacency.

Leaders must stay alert and be able to elevate themselves and become even greater leaders when crises or circumstances demand. During a struggle, they must sharpen their focus and give full attention to the battle they face at that moment. In pressing circumstances, today’s battle is the only battle, because if they don’t win now, there’s no tomorrow.

“Bottom line: combining short-term goals with longer-term visions and building an engine for the future, versus one that’s fixated only on the near-present, requires sustained resiliency and an ability to bring your board along with you. Short-term and long-term planning aren’t either/or; like most solutions today, it’s a question of and.”

When something new or unexpected affects your firm, you must “define it” and then determine the best tools for dealing with it. Often, CEOs must strategize while facing the need for immediate decisions or even immediate action. If you are planning a bold move, a disruption or emergency could create an open door for innovation. You may be able to implement your most innovative strategies during a crisis.

Even without a crisis, keeping your leadership team somewhat on edge could have some advantages. While running Dow Chemical, author Andrew N. Liveris regularly conveyed the possibility to his team members that they all might lose their jobs if they kept coming up with the same tired, worn-out ideas. He thus convinced them that their future and the company’s future required fresh thinking.

Disruptions that delay your goals or have a negative impact on your firm are always tough, but they keep you alert and engaged. If complacency is a threat, consider deliberately disrupting yourself as CEO. And, no matter how well things may be going, for your firm or for yourself as an executive, always have a succession plan in place so a new leader can step in and take over quickly if necessary.

New CEOs should look to the future.

Many new CEOs act the way they think they’re supposed to act. They try to fit into their preconceived model of how a high-functioning CEO behaves. This is a mistake. Respecting established ways is important, but new CEOs often get promoted to that position because of who they are, not because of their ability to play a role or mimic others. This means that they’re best served by discovering and investing in their true identities.

As a new chief executive, focus on your vision and your strategies, not on fitting an outdated model. Businesses must focus on the future, not the past. Show proper deference to the organization’s founders, but remember that you’re in charge now. However, don’t assume that because you are now the chief executive, your inherited team members will all be on your side. Quickly get rid of grumblers and detractors. You need loyal lieutenants who will support you, not people who take shots at you behind your back.

“I’ve spent most of my career at the intersection of business, government, academia, the nonprofit sector, and civic society…I’m also a scientist and engineer who believes that my training and knowledge base gives me the right and even the duty to solve the biggest problems humanity faces. That knowledge base has allowed me to gather insights about the multiple fault lines I see across the world and come up with solutions about what businesses and leaders must do to ensure their survival and success in the upcoming decades.”

However, never become too proud to seek and follow sound advice. When Liveris became CEO of Dow, he invested two months in interviewing almost two dozen leaders of other companies, including Jack Welch, then CEO of General Electric.

He spoke with IBM’s Sam Palmisano, P&G’s A.G. Lafley, 3M’s Jim McNerney, Citigroup’s Sandy Weill, and Walmart’s Lee Thomas, among others. Each leader gave him valuable insights in every area that concerned him, including dealing with his board of directors, handling growth, managing crises, and engaging with many varied stakeholders. Liveris learned to maintain both a local and a worldwide view, an attitude he refers to as being both “wide and deep.”

The advice that proved the most enduring came from Lafley, who urged Liveris to, “Embrace your reality, choose among your options, build the team to execute,” and “lead the charge.”

About the Author

Former CEO and chairman of The Dow Chemical Company, Andrew N. Liveris also wrote Make it in America: The Case for Re-Inventing the Economy.