I asked Pippa Malmgren, founder of DRPM Group (an economic risk consultancy), what makes good business leaders.
What would you say are the top attributes needed to be a successful business leader?
Pippa Malmgren, DRPM Group: One crucial leadership skill is to keep new information coming in even though you’re at the top. I work with many CEOs around the world, who have increasingly less time and a constant need to make decisions. This means they have more and more limits on what new information, ideas and people that can reach them. They tend to rely on known and trusted colleagues for advice. But are those people in touch?
Given the speed at which things are changing, it’s important for business leaders to surround themselves with new and younger voices, who are at the cutting edge of what’s going on. Take the financial services sector: crowdfunding platforms such as Kickstarter and IndieGoGo, most of which have been started and used by entrepreneurs aged under 35, are fast displacing the lending function banks used to do. People at the top ought to be paying close attention to this.
Good business leaders also know to distinguish between luck and skill. CEOs should keep asking themselves how much of their company’s success is down to their firm’s hard work, and how much is a reflection of the macro-economic environment (for example quantitative easing, which pushes up the stock market and asset values).
To what extent have business leaders changed in the last five years?
CEOs are given shorter tenures – on average three years -- and less time to accomplish their tasks. This trend is combined with an increasing number of outsiders being appointed CEOs in a sector they don’t necessarily know. They bring incredible external skills but learning how to manoeuvre the machinery and staff in a new firm is a learning curve.
For example, I think Apple did the right thing in bringing in Angela Ahrendts, former CEO of Burberry, as head of retail and online sales rather than CEO. She’s in a hugely powerful role where she can share her skills, and the company still benefits from the current CEO’s years of experience in the business as well.
Becoming the CEO of a major company propels that person into a new level of global influence, on par with the political leaders of many countries. How do CEOs see their responsibilities above and beyond a company figurehead accountable to the board and shareholders?
CEOs have always been influential and visible to the general public. However, with more empowered consumers and increased scrutiny on companies’ CSR commitments for example, business leaders need to understand profitability is not enough. It’s a given. As Peter Drucker once said, profit is not the purpose of an organisation but rather a constraint, i.e. a test of whether the business is behaving appropriately. If leaders want their company to thrive, then their firm must serve a social purpose the customer believes in. Firms have to stand for something more than profitability alone.
Who have been the most influential people in your career? Why?
The biggest influence in my experience has probably been what I call my “anti-mentors”: people who actively opposed me or undermined me. It’s a competitive world. There will always be an opponent. But the worthy opponents always served as confirmation that I was doing a good job, or enabled me to question myself and understand what I wasn’t doing right. I now welcome the arrival of such people in my life.
Regarding my biggest inspiration in my career, I would cite my father. He was US trade negotiator and economic advisor under Presidents Kennedy, Johnson, Nixon and Ford. He taught me that the world economy is genuinely fascinating, from auto parts to textiles, and from geopolitical events to trade negotiations.
This interview is part of a series managed by The Economist Intelligence Unit for the new Audi A7. Click here for more information about the research programme.
