Leadership teams need diverse perspectives

We live in a VUCA world: volatile, uncertain, complex, and ambiguous. The velocity of change – of both threats and opportunities – is higher than ever before, creating extraordinary pressure on CEOs and top executives to deliver shareholder value. They must master massive shifts in technology and competitive dynamics and transform their enterprises to meet these challenges.

For all the change happening outside the doors of the executive suite, however, the composition of leadership teams remains homogeneous and stagnant. Too often, CEOs surround themselves with like-minded and traditional voices. This can create an “echo chamber” effect, where leaders simply find their opinions confirmed by the advisors around them. In a time when threats are more varied and the stakes are higher than ever, monolithic thinking can be fatal.

...monolithic thinking can be fatal.

Smart leaders know that the modern enterprise needs a diverse range of perspectives. This means diversity across every dimension. Today’s leadership teams and corporate boards desperately need to be more representative of our society at large in terms of gender, culture and race. And they also need to have a broader range of backgrounds and professional perspectives.

The argument for demographic diversity in executive leadership is undeniable and demands action. Some of the world’s largest investors are prepared to vote with their feet against “male, pale, and stale” executive suites. The argument for diversity of expertise, while subtler, is also compelling. It comes down to providing the CEO with a thoughtful and varied range of choices and support. A leadership team lacking a broad skill set can tend to miss opportunities and fail to consider the full implications of their decisions.

GCs can contribute more and in new ways

By no means would I suggest that General Counsels are the only executives who can contribute to bringing a broader perspective to their CEOs. There are many voices in the corporation that can play a larger role than they are typically asked to play. But since my experience is as a GC, I can best speak to the potential impact that an active and empowered GC can have on company.

First, think about the traditional role of the GC – the “top lawyer.” This is classically an important but sharply limited role, a specialist who addresses only issues directly related to litigation or legal risk. Now consider the range of ways a “modern GC” can add value.

1. Connecting the dots across the organization

As an enterprise grows, functions and leaders tend to become siloed, making it difficult to compete in a fast-changing world. A strong GC reporting directly to the CEO can move seamlessly up, down, and across an organization, identifying critical interdependencies and “blind spots.” This independent perspective can be a major advantage and source of support for the chief executive.

...asked to list the most vital competencies needed by future GCs, corporate officers rank overall judgment and integrity higher than legal expertise.

2. Championing the character of the company

When asked to list the most vital competencies needed by future GCs, corporate officers rank overall judgment and integrity higher than legal expertise. They want GCs to protect the values of the company and advocate responsible behavior and corporate governance. This is about more than protecting against liability: it is about shaping and protecting the identity of the company. It also makes good economic sense: In one study, companies that scored highest ethically generated returns that were 30% greater than the Fortune 500.

3. Accelerating and scaling execution

Lawyers have earned the reputation, honed over decades, of being slow and pedantic. Today, however, the most progressive GCs act as accelerators and change agents for their companies. They help their businesses move faster by deploying time-saving technology and processes, cutting cycle times of important tasks from weeks to days, days to hours, and hours to seconds. 

...progressive GCs act as accelerators and change agents for their companies.

Innovation and automation are not just making the legal department more efficient; they are removing friction and bringing velocity to the business, creating millions of dollars of value in the process. 

4. Breadth matters – make your circle bigger

To succeed in the VUCA world, CEOs should prioritize making the circle of formal and informal advisors around them bigger and more heterogeneous. An effective leadership team acts in alignment, but achieves that through a truly diverse range of perspectives representing a large set of skills: strategic, operational, cultural, legal, and so on.

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[As senior vice president, general counsel, chief compliance counsel, and secretary for NetApp, Matthew Fawcett is responsible for all legal affairs worldwide, including corporate governance and securities law compliance, intellectual property matters, contracts, and mergers and acquisitions. He has overseen the development of NetApp Legal into a global high-performance organization with a unique commitment to innovation and transformation.]