A programme to develop leaders who can meet the demands of a changing business environment is helping deliver transformation at advertising giant Dentsu.
It has never been a more challenging time to be a leader. Leaders have to navigate a context with unprecedented levels of uncertainty and change, due to an accumulation of contextual factors: from high inflation, to increasing levels of inequity in society, to global warming and political instability.
Leadership requires vision, direction and disciplined execution. Above all, it requires exemplary role modelling and excellent stakeholder relationships. As leaders, we are pressed – or rather, invited – to rethink what it takes to lead ourselves, lead others, and lead the organizational entities for which we are responsible. It is undoubtedly challenging. But it has also never been a more exciting time to be a leader.
One organization trying to help its leaders meet today’s challenges and tap into an exciting vision of the future is Dentsu. This is the story of its journey.
Leading in a changing world
Dentsu’s history began more than a century ago. The company was founded in Japan in 1901. Today, it is a global organization that partners with brands to achieve meaningful progress as a force for growth and good, comprising some 65,000 people serving 11,000 clients across 145 markets.
Over the last century, the company has evolved significantly. In its latest phase, Dentsu has been on a journey to optimize from 160 global brands to five global leadership brands. This transformation is critical for integrating its offering, delivering growth and creativity for clients at the speed and efficiency they demand.
In order to achieve its ‘One Dentsu’ corporate philosophy, Dentsu has partnered with Duke Corporate Education on a co-created programme, Leading a Profitable Business, for high-potential senior executives. At the programme’s heart is the notion of ambidextrous leadership and the aim of growing the company’s ability to incorporate new views, values and behaviours into its value proposition against a challenging global backdrop.
The need to help prepare leaders to succeed in a changing market was informed in part by the Dentsu Consumer Vision research, which examined the impact of the pandemic and explored long-term consumer trends out to 2030 (publicly available at consumervision.dentsu.com). Its findings are striking. Health and wellbeing is a key theme, with many consumers reporting a desire to utilize technology to stay healthy in the future. On climate change, 77% of UK consumers say that Covid-19 has made them more aware of the environmental harm caused by global travel. Two-thirds say that by 2030 they will not buy goods that they know have a negative impact on the environment. The implications are clear: business leaders must prepare for a very different consumer landscape, in which profitability and sustainability align.
Those two factors have been important to Dentsu ever since its inception 120 years ago. Today, its global chief executive, Hiroshi Igarashi-san, articulates the company’s commitments in terms of the ‘B2B2S principle’ – that is, business to business to society. The firm’s priorities are people, product and profit – in that order. People produce their best work when they are in an environment which helps them thrive. Clients benefit from the great solutions produced as a result, which will lead to healthy margins and returns. These can be reinvested into the business – with people and society as a whole being the ultimate benefactors.
This model drives Dentsu’s commitments to a broad range of activities that promote sustainable societies, and have seen it included in the Dow Jones Sustainability Indices since 2016. But as it looks to the future, the question for a company such as Dentsu is, how can it shape the leadership needed to thrive in a changing world?
There are three crucial dimensions to the journey currently under way at Dentsu: creating a business that is both profitable and sustainable, helping leaders shift from me to we, and supporting self-care, wellbeing and resilience.
Creating a profitable and sustainable business
One of the key lessons is to rethink how the business makes decisions in a fast-changing context. Leaders need to increase their speed of decision-making – and to do that, they need to rethink the types of decisions they make. This is a paradigm shift for decision-making: from playing chess to playing poker, as programme contributor (and Dialogue contributor) Joe Perfetti describes it. Leaders should focus on small incremental bets, grounded in a competent vision and strategy.
The corollary is that leaders should be rewarded for their judgment and ability, rather than circumstances: for their performance in developing and executing the strategy, rather than their short-term results (for which, read quarterly financial numbers). A sustainable and profitable organization understands that quarterly results can be affected by anomalies or luck; one set of disappointing results do not have to force a change of direction, if the direction is right for delivering profitable and sustainable results over the mid to long-term.
Another important insight is that businesses need to raise the bar for leadership behaviour and conduct. In the aftermath of the financial crisis, consumer advocacy on environmental and political issues has become increasingly prominent. Businesses now understand that consumers have a low tolerance for businesses that harm society; some major brands have rightly been tarnished or ‘cancelled’ as a result. At a micro level, leaders need to scrutinize their own actions and decisions. How someone behaves or achieves a result is as important as the actual result; if behaviour has not reflected the highest standards of conduct, the result will not count when it comes to the decision on whether this leader can remain in charge. At Dentsu, the result of such an appraisal is that leaders can be ‘disinvited’ or relieved of their management responsibilities. Appraisals need to ensure that company values are the ultimate lens through which results are evaluated – and those values should reflect the cultural imperatives that guide the organization and shape its purpose.
The purpose of an organization also plays an increasingly important factor in the attraction, engagement and retention of employees. This is true not only for Generation Z, but across generations. Since we believe that people are the alpha and omega of a sustainable and profitable business, it goes without saying that the leader’s purpose is to create the environment in which people can be the best they can be. A leader is there to serve rather than being served.
From me to we
It has simply become impossible for any individual leader to be knowledgeable, skilled and able across all of the domains impacting leadership. Yet this is not a problem if we have leaders who are humble enough to acknowledge it. Great leadership therefore starts with self-insight, self-reflection and curiosity. In a continually changing world, learning motivation or agility (learning quotient) is as important as both judgment and intelligence (intelligence quotient), and empathy, relationship building and influence (emotional quotient). We are all incomplete – but we can seek to form partnerships that build a complete picture.
At Dentsu, we are adamant that “none of us is as good as all of us”. Among our five leadership expectations is the notion of activating radical collaboration. We expect leaders to connect and influence, leveraging a network of diverse partners. We expect them to win as one. We want leaders to innovate together, explore possibilities, disrupt and challenge the status quo. This expectation goes hand-in-hand with the other four expectations of leadership: set the direction, grow your people, delight your clients, and inspire others.
A critical component of radical collaboration is how we develop client solutions: leading with empathy, with innovation as a process, not an outcome. Idea generation is about learning without the fear of failure. One of the most crucial tasks for leaders is striking the right balance between managing for today while investing for tomorrow. This is the crux of ambidextrous leadership and it starts at a personal level: leaders need to adopt micro-changes and personal leadership to initiate change, creating a cascade effect. As one programme participant put it, “The lessons from Leading a Profitable Business can help us shape and drive change more effectively – especially thinking about problems from the perspectives of markets and taking a design approach.”
Traditionally, leadership has been about building expertise, experience and business acumen, but in a volatile world, a new approach is needed. Decisions need to be made by applying inductive thinking: leaders are challenged to find patterns in new sets of data and events rather than deducting the likely outcomes from previous experiences. This means that teams with different backgrounds are essential for helping leaders to find critical insights. Final decisions are still made by leaders, but they need to be astute enough to consult their team members, and mine the value generated by team diversity: to leverage ‘we’ rather than being focused on ‘me’.
The critical importance of this shift was reinforced during the programme through an immersive experience with Nasa. The experience is a simulation of the International Space Station collision in 1997. It presents participants with a high-risk, high-stakes problem-solving challenge in which they have to quickly make judgments, communicate, organize their teams and manage stakeholders to achieve optimal outcomes. What becomes clear is that when we are making decisions for situations we have never experienced before, teams are deeply dependent on one another. It is a key lesson for the reality of business today.
Self-care, wellbeing and resilience
The third crucial dimension of Dentsu’s journey has been to support mental health, self-care and wellbeing. These have rightly increased in importance on the corporate agenda: partly because of the health impacts of Covid, but also because of the pandemic’s effect in sparking what has been dubbed the ‘great reappraisal’. Many people have decided to leave their roles and re-engineer their careers. Work is accepted as a source of motivation, thanks to its self-actualization component – but it too often leads to exhaustion, anxiety and burnout.
For leaders to keep going, they must make conscious efforts to pay as much attention to their mental health and emotional wellbeing as to their physical wellbeing. It is laudable that many executives have spoken out about their personal challenges in this regard. Vulnerability is no longer seen as a weakness, but an essential trait for connecting with people and building healthy, nurturing and long-lasting relationships.
To that end, we placed a significant emphasis on self-analysis and self-care in our leadership programme, helping people to focus on developing an active support network and a ‘personal board of directors’ that can help them find fulfilment and happiness. We are strong believers in the ‘oxygen mask on a plane’ analogy: leaders need to help themselves before they can be there for others.
The programme also explored other sources of pressure in organizations, including those relating to missed opportunities linked to automation and waste created by inefficient processes, over-analysis, or missed opportunities for collaboration. To break out of their silos, leaders need to explore opportunities to collaborate with colleagues across business areas and functions. The cultural mindset has to move from a ‘sink-or-swim’ mentality to one of trust. We looked at ways to stop over-analysing and over-thinking. We also examined the need to lead Dentsu’s transformation with more emphasis on the human dimension – thinking about the psychology of change as much as the spreadsheets that monitor progress. This included helping leaders gain insight into their own reactions to change, and how they might differ to others’, how to lead with coalition rather than coercion, how to prioritize effectively, and how to act, speak and lead with inspiration. These capabilities will aid Dentsu in its transition to a new globally integrated leadership structure.
Dentsu’s journey to build a profitable and sustainable business highlights the importance of ambidextrous leadership. Leaders need to see their challenges through a variety of lenses, provide direction and inspire people to deliver results that are valuable to all stakeholders in the company’s value chain. With an understanding of the new role of leadership and a growth mindset, the challenges of our time can be reframed – not as daunting, but as the most exciting of opportunities.
Caroline Vanovermeire is global director of talent, leadership and organizational development at Dentsu. Matt Butler-Adam is regional managing director UK & Europe at Duke CE.