Frank Beyer, co-founder of the executive search consultancy LAB & Company, talks in our current WYZE interview about dealing with fear, entrepreneurial courage and the future of leadership in the age of New Work.
Mr. Beyer, strategic decisions are almost associated with a high degree of uncertainty. How do you deal with this and what is typical for such decision-making processes?
Frank Beyer: First of all, it’ss important that decisions are made. And very often they have to be taken under uncertainty. How did I proceed? In such situations I have always tried to gather as much information as possible. By this I mean both, facts and unstructured information – for example, opinions of friends who have a completely different perspective from my point of view. But in the final analysis, as an entrepreneur you have to say, okay, there is always more than one option. And then you have to get through, ready and willing to make decisions. At the same time, as a decision-maker you’re not necessarily a hazard-maker, you must not decide purely in the blue. And then you also have to communicate the decision very clearly – so that this feeling of uncertainty, which always accompanies a decision, does not spill over into the environment, especially not into the employees.
In other words, dealing with fear, uncertainty and excessive demands is part of the entrepreneurial role. But the ex-post stories of decisions are almost hero stories. How do you deal with uncertainty in the top management of companies?
FB: Of course, fear is part of it. As a rule, we don’t deal with it openly; on the whole, silence is being spread over it. It may be tight at times, but there is also luck at play. But afterwards you tend to celebrate the successes rather than think about the fact that you’ve just been lucky again. The human being is more likely to repress the negative things and put the positive ones forward. Does that mean you should talk openly about your fears and insecurities? If you just tell the employees that you have sleepless nights as a boss, fears, insecurities, then people are quickly overwhelmed. Employees also need a place of refuge, a stable zone where they can feel safe, with their own fears. And you shouldn’t overload that with your own topics, but rather give the feeling that you have things under control.
Doesn’t your own kettle boil over at some point?
FB: Yes, of course. As a boss, as a decision maker, I absolutely need a valve. I have to learn to deal with my insecurities before they eat me up – me as a person and me as a decision maker. For example, I need communication. The exchange helps me that things don’t harden too much and weigh like stones on my soul and my decision-making ability. But there are still sleepless nights again and again, which it would be foolish not to admit. I think today’s generation of leaders is so educated that we don’t talk about it. But that is just changing. And that’s why coaching and sparring are becoming increasingly normal. This has been the case in the USA for a long time. It is important that I choose my dialogue partners well. Selective openness is what it’s all about.
At the same time, the willingness to take risks, the incalculable, is an inseparable part of entrepreneurship. Would you agree with the observation that there is a trend to push back this wild, unpredictable element, the disruptive? To dissolve even more participation and reduce decision-making responsibility through even more data, even more incremental steps?
FB: Yes, you can already see that the willingness to make decisions across company types has tended to become smaller. If you exclude most start-ups. Because that’s where you have to make the final decision, you can’t even think much about it. But otherwise, you have more loops. You often rely on the safe number. But as an entrepreneur, also as a top politician, or top researcher, I have to have courage. Otherwise I’ll never really remain an entrepreneur for long. I don’t mean exuberance or recklessness. But at some point there will be a point where you have to say, ‘okay, I’ll just decide now’. It is better to make a decision under uncertainty than no decision at all. At least that’s my attitude. And it has proven itself.
Frank-Walter Steinmeier once remarked that democracy is also threatened by technocrats – not only by democracy enemies. When pragmatism and technology dominate, the original political, which is related to the original entrepreneurial, is pushed back. How can we ensure that this is not lost? And also, the great disruptive visions that one always needs?
FB: We see in politics that the willingness to experiment is very low. You almost opt for the simple, the usual constellation. The latest election results would have offered the opportunity to try out new approaches, such as a black-green coalition in Bavaria. That would have been really exciting. And that would have had stronger legitimacy, purely in terms of the election result. But the decision was made in favor of a conventional, supposedly safe solution. Supposedly, because the last few years have shown that the major parties are actually not doing well with this strategy. But the persistent forces, the fear for the benefices – they are powerful.
This can also be observed in the economy. We want to get as little as possible offended – because we always have a trade-off of interests. We try to drive in the mainstream, shy away from real arguments. We increasingly lack the debate culture and the consistency in decisions.
Various studies show an astonishing socio-demographic homogeneity in the management levels of large companies. While the world is changing, the structures remain solid. You don’t get the feeling that side entrances are possible, or that really colorful birds can get to the gear levers and give impulses.
FB: There are several aspects to this topic. One of them is that the time board members spend in DAX companies is already very manageable. We don’t have the rule that contract extensions are pronounced there and that one can talk about the sustainability of long-term management. In addition, the Executive Board very rarely acts as a team and communicates as a team. And a structure that doesn’t even see itself as a team under normal conditions will not become a team in a crisis and will be afraid to stand up together for risky decisions. The same applies to many supervisory board members who take on responsibility far too seldom. This also has to do with courage – also with attitude and a sense of responsibility.
Another reason is structural. A truly external person is always good in a management board – it refreshes, other questions are asked, other best practices are discussed. But it is inevitable that the aspiring leaders will ask themselves: Why him and not me? And then they try to prove that the in-house matador would have been better. By the way, this is also one of the issues that many female managers have to contend with.
And finally, here, too, we decide for the one you can assess better, for someone with the same socialization as we do. Is that good in the long run? I don’t think so.
Do you believe that this self-reproducing system will be disturbed in the coming years by the changes often discussed in the context of “New Work”?
FB: I’m convinced of that, yes. We will see more and more rarely this classic career tour, these linear career paths. Other cultures are already further along. I’m a director there today. I will be an entrepreneur in another place tomorrow. The day after tomorrow I’ll be on the board somewhere else. And the day after tomorrow I’ll do something completely different. And then maybe I’ll be CEO again. For decades it has been the case with us, that once I am a managing director, then I have to be a managing director again in the next step, or a board member. And you don’t go out there. And if you do, you don’t come back. And that’s why when you were looking for a CEO, he had to have been on the board for at least ten years. But where does that stand? The question is, what should he do? What kind of strength does he need?
But that is beginning to change. Also, because you realize more and more that whoever has made different things successful makes decisions on a better basis. I experience this in the meantime with some occupation processes for the top level. People with such experience also have no problem involving others. They’re not afraid of anything and can go through any discussion in any depth. I wish we had several such examples.
An important factor is certainly the changing lifestyles and preferences of generations Y and Z?
FB: Yes, that’s a real ‘tectonic shift’. This model, ‘I work for twenty years without complaints every week for 50 hours and gradually ascend in the company’, will no longer exist. The young generation will say, okay, ideally I have a basic salary, so I can afford a little bit. And then maybe I’ll do a really great project for six months. 70 hours a week. And I get paid right for it. And then I travel the world for three months or learn a new language. And then I do another project, on a completely different topic. And I’m happy to take on another project in “my” company again.
So, and now try to bring this into line with the traditional HR logics and philosophies. But that’s exactly how this generation will be – It will choose diversity, variety, temporary ties and side paths. They won’t be so afraid of failure because success outside the linear logic we are used to has to be defined differently.
Incidentally, this is one of the secrets of the USA’s success in the digital economy. This daring, open, odd. We, on the other hand, are still trying to push young people very hard into the structures with which we ourselves have been professionally socialised. I think that is very critical. This does not necessarily create the start-up and innovation culture we need.
What do these changes mean for the understanding of leadership and ultimately for the chances of successful leadership?
FB: I believe that leadership becomes all the more important the more the corset of formal structures and similar career paths is softened. I notice this when I talk about New Work with employees, but also with my three adult children. Yes, they have a very strong desire for participation and flat hierarchies, for flexibility and co-determination. But what they don’t mean is that they want to be without leadership. Not everyone wants to have a sleepless neighbor in order to get back to the beginning of our conversation.
Of course, leadership must continue to develop – it must be more inclusive, it must also make more sense, it must hold together an increasingly heterogeneous group. In my opinion, the young generation can no longer be reached at all with purely conservative elements. You have to make other offers, enter into dialogue. And we must create new areas for identification and cooperation. For this we also need stable anchors. We need strong leaders, someone who can fly the flag first. Real leadership does not dissolve into discussions and committees. The willingness to assume responsibility and to make serious decisions even under uncertainty will continue to be the core of any leadership in the future.