When Michael Jordaan announced that he would be leaving his position as CEO of FNB in May 2013, he reminded the media that he was "stepping down", not "retiring". "There are 193 countries in the world and I haven't seen all of them. I want to visit places where there are great ideas around technology and innovation," he told a press conference. His choice of words is telling: under his tenure, FNB gained a reputation for always being at the front-end of banking innovation. In October 2012, FNB was named the most innovative bank in the world at the BAI-Finacle Global Banking Innovation Awards - recognition of the company's ability to track and respond to customer needs and evolve continuously.
"The importance of innovative leadership in business has become even more apparent in the 21st century environment," says Barrick. "We've seen a radical change from the 20th century paradigm, which concentrated on market share and efficiency as the drivers of profit. As Adrian Slywotzky, David Morrison and Bob Andelman put it back in 1997, in their ground-breaking business book The Profit Zone, 'Market share is dead'. In fact, under certain conditions a company holding a majority market share can be less profitable than businesses with a smaller market share."
In their analysis, Slywotzky, Morrison and Andelman examined companies - and leaders - that had moved beyond market share as a yardstick, and seen increases in profit as a result. Michael Eisner increased profitability at Walt Disney by 3000%, for example, by creating multiple profit channels spun off from the company's core business: family movies. Films now generate a soundtrack album, a DVD, a Broadway show, a theme-park ride and a range of souvenir merchandising. Around Disney theme parks, the introduction of Disney-owned hotels, restaurants and merchandising saw the company's profit rise from 20% to 75% of a family's holiday spending.
General Electric has been a business giant for more than 50 years. The Profit Zone points out that this continued ascendancy is thanks largely to former CEO Jack Welch's foresight. When he saw a decline in profits from the company's core business - manufacturing aircraft engines and appliances - despite the fact that it commanded considerable market share, he reinvented the company to take advantage of new profit zones: in financing, servicing and maintaining these products.
"Reinvention is central to innovative business, especially in the information age," says Barrick. "Instead of market share, Slywotzky et al talk about identifying 'profit zones' and 'non-profit zones'. The key to sustained success is doing business in the profit zones and not committing company time and resources to non-profit zones. They provide 22 different business designs; all of them showing how different criteria will identify different profit zones, involving everything from niche marketing to brand reputation. But what they all have in common is innovation: these businesses have leaders who have an intuitive understanding of evolving needs and desires within the market. They also understand how changes in society and technology can allow new interventions that multiply profit streams."
If constant innovation is the secret of success, how does a business find the creative leaders it needs - at all levels - to drive that innovation? Traditional search tools only assess candidates' functional competencies, but to identify innovators, candidates' "consciousness" must also be assessed. Consciousness is a concept backed by scientific research. It refers to eight important behaviours - namely creativity, openness, trust, courage, self-awareness, confidence, intuition and instinct - shared by top leaders. A study in the USA, replicated in South Africa by Humanity, showed that successful companies have leaders with high scores in these behaviours. Innovative leaders manage change and adapt to new opportunities constantly - their ability to do this is reflected in their high "Consciousness Quotients" (CQs). If companies are to maintain the constant evolution required to maximise profit streams, they need to find leaders using search tools that take CQ into account.
Humanity Search & Select is the only search company globally using CQ assessment in addition to the standard evaluation of knowledge, qualifications, experience and other psychometric testing. "The biggest shift business is undergoing at present is a move away from assessing performance purely in terms of the bottom line," says Barrick. "Instead, a more holistic trend is emerging - with companies like Apple, Microsoft and Google realising that they have a responsibility for the social and environmental consequences of their actions - the so-called 'triple bottom line'. Tycoons like Bill Gates, Warren Buffett and Patrice Motsepe also understand that philanthropy is not merely an act of charity - it's an investment in the future. Ambitious businesses need leaders who intuitively know that they need to swell their ranks with innovators; they know that the triple bottom line is not a "tick box" exercise, but rather a focus that attracts a real return on the philanthropic or CSR investment. It takes high-consciousness individuals to implement this all-encompassing approach."
The research is unequivocal - whether it is a multinational organisation or a small business, the only way a company can stay successful in an ever-changing environment is constant innovation; innovation that demands teams rich in CQ. Humanity Search & Select has developed the only tool to assess CQ as a 360 degree application, and have verified it on a sample of more than 15,000 South Africans.
For more information, email az.oc.asytinamuh@kcirrabg.
