11
Entrepreneurial Leadership and Culture

The appointment in 2002 of Mathias Döpfner as CEO of Axel Springer was met with skepticism within the half‐century‐old German publishing company. Promoted from the newspaper division, where he had served as editor of Die Welt, 39‐year‐old Döpfner had been preceded by a revolving door of executives, each with a new vision for the company. Employees braced for the announcement of yet another “strategy.”

Hinrich Springer and his son Axel, a reporter and editor, had established Axel Springer in 1946 as a printing company, based in Hamburg. Over the next decade, the company grew by either starting or buying newspapers and magazines, including Bild, a tabloid newspaper with an emphasis on crime and sex, and Die Welt, the more respectable broadsheet that became the flagship of the enterprise. With tensions mounting between East and West, the company moved its headquarters to West Berlin in 1959 and situated its new building right on the demarcation line. In the 1960s, it towered above the Berlin Wall, serving as a “symbol of freedom,” according to the founders. Over the next four decades, the company went public and grew to have both a print and broadcast presence in over 20 countries in Europe and Asia.

Döpfner’s appointment at the beginning of the new millennium was controversial with both employees and stockholders, many of whom questioned whether his educational background in music and theater had prepared him to lead the company at a time when the publishing industry was just beginning to feel the economic effects of the Internet. Should the company hunker down, defending, and investing in its legacy media, or should it plunge headfirst into an uncertain digital future? Döpfner didn’t hesitate to choose the latter option, laying out a unifying company‐wide strategy and goal. Axel Springer, he announced, would become the premier digital media company in Europe.

Yet, despite several acquisitions and partnerships, by 2006 only 1% of the company’s revenues came from digital assets. In that year, Germany’s antitrust agency rejected Axel Springer’s bid to purchase the country’s largest television broadcaster. This caused Döpfner to reevaluate his digital strategy. Instead of focusing on acquisitions of legacy broadcast media, he declared that the company would instead focus on organic growth and acquisitions of late‐stage digital start‐ups. He challenged the employees of the company to produce half of revenue and earnings from digital by 2016.

It seemed like a moonshot at the time. However, a mere decade later, the goal had been reached—and surpassed. It was accomplished in two separate stages—with the first beginning in 2006, and the second in 2012. The transformation of Axel Springer from disrupted legacy print company to disrupting digital pioneer is instructive for both start‐ups and traditional media companies. It is a story of leadership—on many levels—during a time of tremendous disruptive change in the industry.

The economics confronting today’s media companies require both a new organizational structure and a new leadership style. A media company’s core competencies in the digital age—content creation, new revenue development, and technological competitiveness—must align with its organizational structure. Leaders must have the ability to “zoom in and zoom out,” as Microsoft founder Bill Gates describes it. They must be both outward‐looking, constantly surveying the competitive landscape, and inwardly focused, identifying real and imagined internal obstacles to change. They must be disruptive, but also realistic in their aspirations; flexible, yet focused on achieving bottom‐line results; collaborative, yet decisive. In this chapter, we explore the competing demands and priorities within media organizations and the core skills needed by the leaders of those enterprises.

Among the questions we’ll consider:

  • What is organizational culture and why is it so important?
  • What types of structures and cultures exist in organizations?
  • What types of organizational structure and leadership are needed in the Media 2.0 environment?
  • What is the role of teams in this new environment?
  • What qualities make for successful leaders?

Why Is Organizational Culture So Important?

Culture eats strategy for breakfast.

In his 1985 book entitled Organizational Culture and Leadership, Massachusetts Institute of Technology professor Edgar Schein noted, “[c]ulture determines and limits strategy.” Over the years, his observation morphed into a more memorable statement—“culture eats strategy for breakfast”—which has been variously attributed to author Peter Drucker (perhaps apocryphally) and Mark Fields, the President of the Ford Motor Company, as well as to a host of other executives and consultants.

In 2008, Clark Gilbert, a former Harvard Business School professor, became CEO of Deseret Management Corporation, which is owned by the Mormon Church. Gilbert’s assignment was to reposition the Deseret News, the oldest continuously published daily paper in Utah, for the digital era. Looking back on his five‐year tenure in 2013, he remarked in an interview for the book, Saving Community Journalism,

There is a joke I tell on myself. I tell my former colleagues [at Harvard] that it’s a lot easier to lay out a strategy on a PowerPoint slide than it is to do it in real life. I vastly underestimated the amount of cultural work that would be needed…I now believe that a good strategy is, at best, only 49% of the solution.

While the new economics of media requires transformational change, many firms underestimate the power of culture and only focus on strategy. As Gilbert’s statement suggests, if the culture and capabilities of an organization are not aligned and integrated, the strategy will ultimately fail. A recent study by McKinsey & Company suggests only around one quarter of all transformations are successful.

Why is it so difficult for an organization to transform itself? Economists, psychologists, and sociologists often use the term path dependence to describe the behavior of organizations, such as Axel Springer prior to 2006 or the Deseret News prior to Gilbert’s arrival. The decisions companies make are determined by knowledge of how they solved similar problems in the past and the values employees share. Therefore, when confronted with a challenge, they apply the same strategies and values used in the past to address the present‐day issue. They literally stay on the same path, even if that path is leading them over the cliff.

Culture consists of the collective values, beliefs, and principles of an organization’s members. Organizational culture can affect the way people and groups interact with each other, with clients, and with stakeholders. Schein identified three levels of an organization’s culture: (1) visible artifacts and symbols; (2) well‐articulated and espoused values; and (3) shared (often subconscious) assumptions and values. Leaders need to understand the factors that determine behaviors and responses in each level in order to affect transformational change. Schein’s organizational model is often represented by concentric circles as in Figure 11.1.

The 3 components of Edgar Schein’s organizational model, represented by 3 eccentric circles for artifacts and symbols, espoused values, and assumptions, each with lines connected to circles with bulleted texts.

Figure 11.1 The three components of Edgar Schein’s organizational model.

Artifacts and symbols are in the outer circle. These are the visible elements of a company’s culture that can be recognized by those both inside and outside the organization. This includes everything from the architecture of a company’s headquarters to its logos and the dress code of its employees. Leaders can attempt to alter a company’s culture by changing its symbols. In 2007, the New York Times moved out of its Art Deco style building off Times Square into a contemporary skyscraper, designed by architect Renzo Piano, across from the Port Authority Terminal, a major transportation hub in the city. The open internal spaces and the transparent glass partitions between offices and floors of the new building were intended to suggest the integration of the print and digital components of the Times. Similarly, after making several acquisitions of US‐based digital publishing properties, Axel Springer announced in 2016 it was establishing a second “headquarters” in New York City to signify it was “a major media investor” in the country.

Leaders can also attempt to alter the next level—the well‐articulated and espoused values of an organization. These are the rules of conduct, the mission statement, and the strategies that have determined the outward and inward behaviors of a company. Organizations that “have taken leadership positions in their industries…typically have done so by narrowing their business focus,” according to Michael Treacy and Fred Wiersema, authors of The Discipline of Market Leaders. They identified three value disciplines that most companies focus on—operational excellence, customer intimacy, and product innovation. They concluded that market leaders tended to excel at only one of the value disciplines, while simply meeting industry standards with the other two. The mission statements and strategies tend to reflect the value disciplines a company has chosen to emphasize.

Companies, such as FedEx Express and Walmart, that value operational excellence deliver an extremely reliable product or service, at competitive prices and high convenience. Organizations, such as the Ritz‐Carlton and Nordstrom, that succeed in consistently providing customer intimacy use data and stress operational flexibility to respond quickly and precisely to their customers’ needs. Those that value product innovation, such as Apple, aim to offer their customers leading‐edge products and services. From its establishment in 1997 until 2011, Netflix pursued operational excellence, building a state‐of‐the‐art system that distributed the content of other organizations to a targeted set of customers. As streaming has become more common, Netflix has flipped from emphasizing its distribution system to emphasizing product innovation—creating its own original television shows and movies.

In the Media 1.0 era—prior to the year 2000—news organizations such as Axel Springer achieved market leadership by valuing operational excellence. They were vertically integrated, controlling every aspect of production—from content creation to distribution. Profitability depended on leveraging the efficiency and quality of their various processes and systems. They were typically very siloed, with profit statements for individual divisions and product lines and distinctive cultures in each division. Döpfner indicated a change in Axel Springer’s strategy in 2006—from a focus on operational excellence to product innovation—by setting an audacious financial goal, and then immediately reorganizing the company to eliminate the cultural silos that separated print from digital. In addition, he offered more than 50 workshops and networking events designed to teach employees digital skills and introduce new cultural values.

The inner circle of Schein’s cultural model—the shared (often subconscious) values of an organization—is always the most difficult to change. These values are not immediately apparent, even to those who are insiders. They are accepted and embedded in the culture, but not articulated. They include shared assumptions about how the world operates and how to solve problems when they arise. There are two types of threats organizations face—technical and adaptive—according to Harvard University professor Ron Heifetz, who has studied how organizations deal with challenges to their strategies. Technical challenges can be solved with current skills, as well as an institutional knowledge of how others solved similar problems. An exogenous, disruptive threat, however, requires adaptive behavior. Old behaviors, skills and values need to be unlearned, before new behaviors can be adopted. “Without learning new ways—changing attitudes, values, and behaviors—people cannot make the adaptive leap necessary to thrive in the new environment,” says Heifetz.

In other words, the “DNA” of an organization needs to change. “Adaptive change forces people to question and perhaps redefine aspects of their identity; it also challenges their sense of competence,” wrote Heifetz in Leadership on the Line: Staying Alive through the Dangers of Leading. “No wonder people resist.”

Research by numerous organizational and business scholars has shown that a transformational shift in culture occurs in stages, some overlapping. The first stage involves articulating new values and identifying a guiding coalition of innovative and entrepreneurial employees who understand the business imperative and can easily adapt to the changed environments. These new values and skill sets must be reinforced and supported with new organizational structures, as well as new institutionalized systems of measuring success. Throughout the entire process, it is imperative to periodically step back, reassess strategic direction, and then reinvigorate the cultural transformation.

After establishing a new direction for Axel Springer in 2006, Döpfner reinforced the imperative to change the culture by articulating two new values that would be important to the company’s future success. First, cannibalization of current products and services was acceptable, if it had a long‐term benefit. Second, entrepreneurial and innovative ideas and employees were welcome. Finally, in place of the old silos, he reorganized the company into three new business segments or divisions, all focused on digital growth: classified advertising, marketing (i.e., serving advertising clients), and paid content.

At the midpoint, in 2012, he made another unorthodox move. He bought three of his top executives one‐way tickets to Silicon Valley. Their assignment was to build relationships and learn from the tech giants. These three executives spent six months touring tech start‐ups and giants, such as Google and Facebook, asking a lot of questions, and devising new ways to solve the challenges that Axel Springer faced. In 2013, they hosted a management retreat in Silicon Valley for 70 of the company’s top executives, sharing what they had learned. Additionally, Döpfner established a rotating six‐week Visiting Fellows program in Silicon Valley for Axel Springer employees. As Döpfner realized from the beginning, no matter how well thought‐out a strategy may be, transformative change does not occur unless the company develops a new strand of DNA that aligns cultural values with the skill set of the employees.

What Are the Types of Structure and Culture Found in Organizations?

Strategy, culture, and structure: all three need to be aligned if there is to be true organizational transformation. A 1978 business classic—“Organizational Strategy, Structure and Process,” published in the Academy of Management Review—identified three types of strategic organizational structures and three fundamental problems, or challenges, an organization encounters. According to the authors, how a company responds and adapts its strategies to respond to those three strategic challenges depends on its structure and the established processes for dealing with problem‐solving that are already in place.

The three types of environmental challenges that confront organizations are: entrepreneurial, engineering, and administrative. Entrepreneurial challenges involve a strategic commitment by an organization to create and launch a new product or service. Engineering challenges require companies to make a technological and financial commitment to producing and distributing the new product. Administrative challenges involve the formulation and implementation of processes and procedures that will allow the organization not only to produce a specific product, but to continue to evolve and innovate. In order to successfully bring a new product to market—or respond to a competitive threat—an organization must have in place a structure that allows its employees to solve each of these three interrelated and complex challenges.

As a company moves through the various stages of growth—from start‐up to the mature phase—the culture changes, from one of risk‐taking to one of defensiveness. The structure also tends to change. Start‐ups typically assume a structure that encourages prospecting and innovating. Market leaders are typically defenders.

Prospectors create and maintain an environment that encourages continual identification and exploitation of new products and market opportunities. Prospector organizations are in a continuous and fluid state of developing or introducing new products or services. Because the prospector organization is so adept at managing and adapting to change, it often gains market share during periods of disruption. Needless to say, prospectors have a proclivity for living with higher risk than other organizations. Such organizations tend to approach engineering and administrative problems with a great deal of flexibility, not wanting to commit to a single technology and seeking decentralized processes that encourage collaboration. Prospector organizations are usually led by marketing and/or research and development experts, and thrive in high growth or volatile markets. On the downside, prospector organizations often have a breadth of product offerings and struggle with low profit margins. Additionally, they may fail to focus on the most promising markets.

Defenders strive for a stable and predictable environment. These are often market leaders, who approach the launch of new products cautiously. They often create a very narrow product line that is produced and distributed to a potential market and invest significantly in a core technology that is very cost‐efficient, but not flexible. The goal of a defender is to anticipate moves by competitors and prevent them from contesting and encroaching on its domain. Defenders often are successful in stable, low‐growth industries, however, they tend to be very insular and miss major industry developments or shifts in customer preferences and trends. Organizational structure and processes are focused on the core technology and efficient administration. Therefore, they have little capacity and skill to identify and exploit new market opportunities. In the Media 1.0 era, most legacy media organizations were defenders.

Analyzers attempt to implement a strategy that is a hybrid of the prospector and defender organizations. They seek to exploit market opportunities and launch new products and services, while also maintaining and defending the profitable “cash cows.” This is a very difficult balance to maintain, as analyzer organizations must pick and choose opportunities wisely. If existing capabilities can be leveraged to support new opportunities, analyzer organizations can achieve higher profit margins than either defenders or prospectors. However, an analyzer organization must constantly balance stability and flexibility, or risk being neither efficient nor effective.

It is very difficult—if not impossible—for an organization to transition from defender to prospector, without first adopting an analyzer structure. When he announced his digital strategy in 2006, Döpfner sought to achieve a delicate balance between old and new, legacy and start‐up, print and digital revenue in Axel Springer. By reorganizing the company into three business segments or divisions—classified advertising, marketing, and paid content—he was able to preserve the “identity” of specific legacy products (such as Bild and Die Welt), while also restructuring the company so it could take advantage of new digital opportunities. Such a restructuring had two strategic advantages. It encouraged the legacy print media products to focus on future revenue growth opportunities (primarily in digital), instead of defending their current market position, which was eroding. Additionally, it allowed executives in the company to more easily target potential digital acquisitions and partnerships that would support revenue growth in one of the three business segments.

Finally, a word of caution about the strategic choices that leaders make on organizational strategy and structure. There is a fourth type of organization—the reactor—which is classified as “a strategic failure” in the article cited above (“Organizational Strategy, Structure and Process”) because “inconsistencies exist among its strategy, technology, structure and process.” Reactor organizations typically evolve from one of the other three types of organizations—prospector, defender, and analyzer. In reactor organizations, leadership has not clearly articulated the organization’s strategy, nor has it aligned strategy with structure. Reactors cannot exist for long in a competitive environment and risk becoming road kill.

What Organizational Structure and Leadership do Media Companies Need in the 2.0 Era?

In the Media 1.0 world, successful media organizations typically had a culture that valued operational excellence and a strategic organizational structure designed to defend its profitable market position. The business divisions within large companies were typically organized into product divisions that were vertically integrated—with content creation, packaging, marketing, production, and distribution housed within the division.

In the Media 2.0 era, successful media companies will have a culture that values innovation and a strategic organizational structure designed to encourage prospecting. The primary strategic focus will be that of delivering to the audience a unique value proposition that differentiates one company’s content from another. This suggests that the core competencies of a successful media organization will be: creation of engaging content, cultivation of new revenue sources, and savvy use of technology to connect with customers regardless of where they are. Therefore, the most important leadership roles in the media company will be Chief Content Officer, Chief Revenue Officer, and Chief Technology Officer. But these will be very different roles from those of the Media 1.0 era. These roles will be cross‐functional, interrelated, and very customer‐focused. Additionally, all three will have a highly developed sense of how content, revenue, and technology work together to develop new and sustainable business models.

  • Chief Content Officer: Whether editor of a newspaper or director of a movie, the Chief Content Officer will be responsible not only for producing quality content, but also for understanding how to engage an audience—both retaining and building the loyalty of current customers, as well as attracting new viewers, visitors, and readers. This will require a sophisticated understanding of audience analytics and marketing techniques, as well as knowledge of how to use technology most effectively to tell compelling stories in multiple ways on multiple platforms—including online forums and offline, in‐person events.
  • Chief Revenue Officer: This important role in the triumvirate expands from that of selling space or time to selling solutions to both advertisers and consumers of the content produced by a media company. This most likely will require a total rethinking of the advertising sales function so that media companies begin offering a range of marketing services typically offered by ad agencies. Additionally, as digital business models evolve, Chief Revenue Officers will need to understand how to sell content directly to consumers. Therefore, like the Chief Content Officer, the Chief Revenue Officer will need to be very proficient with audience data analysis and have a nuanced understanding of how to use technology to reach current and new consumers wherever and whenever.
  • Chief Technology Officer: In contrast to the past when the Chief Technology Officer was primarily responsible for keeping the content‐creation and distribution systems updated and running efficiently, this new role is outwardly focused, with the aim of providing a unique customer experience—for a company’s advertisers, as well as its viewers, visitors, and readers. This means that the Chief Technology Officer must have a nuanced and in‐depth understanding of how consumers interact with content and design systems that lead to greater customer engagement and, ultimately, loyalty.

Whether consciously or not, in 2012, Döpfner acknowledged the importance of these three roles in Axel Springer’s future digital success when he chose three executives to spend six months in Silicon Valley, learning everything they could. He chose the editor of Bild (Chief Content Officer), the CMO of Axel Springer (Chief Revenue Officer), and the founder of Ideolo, a digital price comparison platform (Chief Technology Officer). Their vision for Axel Springer, presented to other executives at the 2013 retreat, acknowledged how interrelated content, revenue, and technology were in the Media 2.0 environment. The core competencies were no longer focused on operational excellence but on innovative ways to connect and engage Axel Springer’s customers.

What Is the Best Way to Use Teams?

When a company is faced with a difficult decision, invariably someone suggests, “let’s form a team.” Teams are not a solution to every organizational problem, according to longtime management consultant Jon Katzenbach, co‐author of The Wisdom of Teams. Wrongly used, teams can waste time and disrupt performance. However, Katzenbach hastens to add, his research has shown that real teams outperform individuals acting alone or other types of working groups, especially when there is a need to solve a problem that requires multiple skills, perspectives, and experiences.

In uncertain, fast‐paced times, leaders of media enterprises need to rely on cross‐functional skill sets and multiple viewpoints when making strategic decisions. Therefore, knowing when and how to use a team‐based approach to decision‐making is critical. Katzenbach distinguishes between three types of functional organizational units—the working group, the real team, and the high‐performance team. Most organizational units labeled “teams” are, in fact, what Katzenbach calls working groups, or potential teams. Working groups share information, best practices, and perspectives. Working groups can be quite effective, depending on how they are used and tasked. For example, the three executives that Döpfner sent to Silicon Valley for six months formed a very effective working group. Their assignment: learn everything they could about the digital future and then share it with their colleagues.

In contrast to working groups, real teams have a charter—usually from senior management—that defines an overarching purpose and specific performance goals. Leadership responsibilities on a team are shared (instead of having one designated leader). All members are actively involved in problem‐solving, and each member of the team assumes both individual and mutual accountability for delivering a collective work product.

Real teams consist of only a few people—no more than five to seven members, with specific skills, perspectives, and experience. While there is often a good deal of focus on putting together a team with cross‐functional skills and knowledge, less attention is paid to the perspectives each team member brings. Just as organizations tend to respond to a strategic challenge or opportunity in one of three ways—either as a prospector, defender, or analyzer—people within an organization often bring similar mindsets to problem‐solving. Having a mixture of strategic perspectives on a team is very useful for both start‐up media enterprises trying to get to the next level, as well as for legacy media organizations trying to embrace a digital future. Prospectors are adept at finding and exploiting opportunities. Defenders are intent on protecting the overarching mission and values of the company. Analyzers look for ways to minimize risk and maximize profit, and often play a key role in resolving the different approaches of the defenders and prospectors.

In addition, the personalities of the different team members can affect the pace at which members arrive at decisions and the quality of their recommendations. Recent research by Deloitte Consulting identified four types of personalities that are usually present on most teams: pioneers, drivers, guardians, and integrators. Team performance can be significantly improved by understanding how each personality interacts and adjusting the mix of team members, based on what needs to be accomplished. Pioneers and drivers, for example, tend to be very focused on problem‐solving, prefer brisk and to‐the‐point discussion and want to make clear connections between what is being discussed and the presenting problem. On the other hand, integrators and guardians like to focus on getting to know other team members and seeking the perspectives of all stakeholders (including those not on the team). Depending on the problem that needs to be solved and the deadline imposed, the mix of team members can be adjusted based on personality.

Teams are typically best used by media enterprises either to make a specific recommendation—such as suggest a new strategy—or to make or create a new product or service. In addition, recent research by McKinsey and Company also found that cross‐functional teams can be very effective in responding to a major company crisis—such as hacking, product defects, hostile takeovers by activist shareholders, and competitive thrusts by new entrants in the market. Significant (and meaningful) performance challenges can energize teams, but Katzenbach notes that high‐performance teams are very rare. As distinguished from other teams, members of high‐performance teams have an unusually high commitment to one another’s performance, as well as to the team’s.

Although high‐performance teams are rare, Katzenbach urges leaders to encourage the sorts of behavior and values in an organization that nurture team development since interactions and performance at this most basic of levels have the potential to change the DNA of an entire organization. High‐performance organizations tend to produce high‐performance teams. He identifies these traits that are found in both high‐performance companies and teams.

  • Breakthrough performance goals aimed at delivering superior results to employees, customers, and shareholders.
  • Clear, challenging aspirations in the charter or statement of purpose (i.e., the vision, mission, or strategy statement).
  • Committed and focused leadership with an unrelenting dedication to communication, measurement, and experimentation.
  • An energized, skilled workforce dedicated to productivity and learning.
  • A nurturing of core competencies and skills that give an organization a competitive advantage.
  • Open communications and knowledge‐sharing at all levels.

What Qualities Make for Successful Leaders?

Especially in recent years, there have been numerous articles in both the scholarly and popular press about the differences between managers and leaders. Often management has gotten a bad rap. Who wants to be a bureaucrat, keeping the trains on time, when you can aspire to be a coach leading your team to victory? Harvard University professor John Kotter was among the first scholars to make a distinction. “Management is a set of processes that keeps an organization running…planning, budgeting, staffing, measuring performance, and problem‐solving when results do not go to plan.” Leadership, he says, “is always about change,” not about mobilizing people to do what they’ve always done. It’s about “aligning people to the vision, about buy‐in and communication, motivation and inspiration.” In Leading Change, he lays out an eight‐step plan for accomplishing just that, which begins with creating a “sense of urgency” about the need to change and establishing a guiding coalition of other leaders within the organization to help you lead the change.

Other scholars have pointed out that even during periods of fast‐paced change, leadership and management must exist in tandem in high‐performance organizations. John Gosling, a professor at the University of Exeter Business School, argues that “a leader needs to inspire employees” to change and achieve goals, while also “thinking of new ways of reaching” goals. In this view, good leaders know how to adapt the principles of management—planning, measuring, and problem‐solving—to the challenges the organization faces.

But, how exactly do managers become leaders? In a 2012 article for Harvard Business Review, Michael Watkins, professor at the International Institute of Management Development, laid out seven seismic shifts that managers—or leaders of a function—must navigate in others to become leader of an organization (Table 11.1).

Table 11.1 Shifting from a manager to a leader.

Source: Adapted from Watkins, (2012).

Specialist to generalist Aim to understand a wider range of business tools for your organization
Analyst to integrator Start using cross‐functional knowledge to solve problems
Tactician to strategist Zoom in and out on details
Bricklayer to architect Learn how to align strategy, structure and operating processes
Problem‐solver to agenda‐setter Define key challenges and opportunities
Warrior to diplomat Influence internal and external stakeholders
Supporting crew to star Inspire others with your behavior and communications

A recent study by the executive search firm Russell Reynolds Associates speaks to the yin‐and‐yang tensions that drive success in the C‐suite, and in organizations these executives lead. Effective leaders, the study found, demonstrate a complex mix of abilities and traits, many of which would seem to be contradictory. For example, during times of fast‐paced change, leaders must pursue disruptive strategies, but also be mindful of how fast their organizations are capable of changing. Here is the mix of skills that make for successful C‐suite executives, according to Russell Reynolds:

  • Disruptive and pragmatic: Leaders challenge the status quo and make the case for fundamental change, yet also act as an organizational filter during times of volatility. They understand the practical limits of how much change an organization can absorb.
  • Risk‐taking and reluctant: Leaders thrive in ambiguity and adapt nimbly and quickly. Yet, they also exercise caution in taking risks by discerning and anticipating threats on the horizons.
  • Heroic and vulnerable: Leaders know their own strengths and display perseverance in the face of challenges. But they are also aware of their own limitations. In other words, they know what they don’t know.
  • Galvanizing and connecting: Leaders inspire trust through charisma, influence, and drive, yet also let others take the spotlight. They empower others to create strong networks within and beyond the organization.

A separate study by Russell Reynolds found that executives who successfully led their organizations through a digital transformation tended to have five traits that distinguished them from other executives. They were innovative and always challenging traditional thinking; disruptive and willing to take calculated risks; bold and decisive; socially adept and could adapt their messages to communicate with different audiences; and finally, they were determined, optimistic, and achievement‐oriented.

According to strategy + business, the consulting arm of PwC, the most iconic enterprises—from Apple and Amazon to Starbucks—“are exceptionally coherent. They put forth a clear winning value proposition, backed up by distinctive capabilities, and apply this mix of strategy and execution to everything they do.” If a company cannot align strategy and execution, “the thousands of decisions made each day by people at every level,” then it risks operating at cross‐purposes. Yet, in a recent global survey by PwC, less than 10% of business executives rate their company’s top leaders as being skilled and effective at both strategy creation and execution. PwC identified 10 characteristics of executives who successfully matched overarching strategic goals with day‐to‐day implementation at all levels of the organization (Table 11.2).

Table 11.2 Ten principles of executive success.

Adapted and reprinted with permission from “10 Principles of Strategic Leadership” from the Autumn 2016 issue of strategy + business magazine. © 2016 PwC. All rights reserved.

  1. Aim high
 Set ambitious goals for your strategy and execution. Formulate a clear message for why these goals are important.
  1. Build on your strengths
 Take stock of your strongest capabilities. Where do you excel over your competitors? Analyze what you do best.
  1. Be flexible
 Cultivate your ability to switch between strategy and execution, zoning in on details and out on strategy.
  1. Shore up employee engagement
 Explain to your workers why their jobs – and your company – are important.
  1. Match structures to strategy
 Organize internal structures so they correspond to your overall strategy.
  1. Break down barriers
 Focus on outcomes, not functions. Encourage collaboration across your organization.
  1. Embrace digital
 Look for ways to create new digital experiences for your customers.
  1. Keep it simple
 Be as simple as possible without sacrificing core capabilities and processes.
  1. Manage your value chain
 Use leading technology to align analytics and processes across your value chain.
  1. Seek collective mastery
 Seek open, fluid and constant communication across levels.

The 1993 book, The Wisdom of Teams, identified five qualities of a successful leader that seem as relevant today as then—whether you are leading a start‐up, or attempting, like Döpfner, to fearlessly lead a legacy media organization into an uncertain digital future. First, “leaders clarify purpose and goals.” That’s self‐explanatory, but never easy in uncertain times. Second, “leaders build commitment and self‐confidence.” Good leaders understand that what motivates an accountant is probably different from what motivates the marketing specialist. Each need to understand how their work contributes to helping the company succeed. Third, “leaders strengthen a team’s collective skills.” A leader knows his or her weaknesses and strives to build a team in which the individual members have complementary strengths and skills. Fourth, “leaders remove obstacles.” That means they’re forward‐thinkers, always anticipating what lies around the curve. And finally, “leaders create opportunities for others”—not themselves. Smart leaders, though, understand that in performing this seemingly selfless act, they inspire loyalty and devotion from their followers.

Summary

As many executives have observed, creating a new strategy is easy compared to the challenges of implementing it successfully. Leaders of both start‐ups and legacy media companies must be able to motivate others to set out on unchartered seas. In order to successfully navigate turbulent waters and make it to the new destination, leaders need to be mindful of both the prevailing culture and the organizational structure of the company.

There are typically three levels of culture in every organization. The first two levels are visible and can be directly influenced by the leadership. This includes artifacts and symbols, such as the architecture of a company’s headquarters and its dress codes, and the espoused values, such as those articulated in a company’s mission statement and rules of conduct. In the inner circle are the unspoken values and behaviors of an organization. These are most likely to derail any strategy. Faced with a disruptive threat, organizations need to unlearn behaviors, values, and skills before new ones can be learned. That is why many leaders link the announcement of new strategies with a reorganization of a company’s structure since this becomes a powerful symbol that change is occurring, and the ship is sailing.

Classic business literature identifies three types of strategic structures in most companies: prospectors, defenders, and analyzers. Depending on the strategic focus of a company, it responds differently to these three challenges: an entrepreneurial response results in the creation of a new product or service, an engineering response in the development of processes that support the new offering, and an administrative response in the establishment of systems that allow the company to continue innovating. Prior to the spread of the Internet, most media companies were defenders of their market leading positions. In the digital era, they need to become prospectors and analyzers.

The team or working group is the most basic organizational unit in a company. Real teams outperform individuals or any other type of working group in an organization. Media enterprises can effectively use teams to recommend changes in a company’s strategy, develop new products and services, and respond to crises. Management and development of teams is as much science as it is art, and requires a mix of skills, perspectives, and experiences. High‐performance teams are very rare. High‐performance companies and teams share many of the same traits—including a clearly defined vision and a collaborative, energized workforce.

Founders of start‐ups, as well as executives in established media companies, must be both managers and leaders. Managers plan, measure, and evaluate current performance. Leadership is about the future and motiving others in an organization to follow a new path. Leaders demonstrate a mix of traits, some of them contradictory. They must be decisive and confident about the future, but also adaptive when confronted with new opportunities and unforeseen circumstances. Leaders of successful digital transformations tend to be innovative, bold in their vision, and socially confident and optimistic (but realistic) about the future.