What we think | Practitioners Perspectives

Changing Leadership Mindsets and Thinking – The ‘Phoenix Encounter Method’

paddy-padmanaban-Unilever-Chaired-Professor-of-Marketing
Practitioner:

V ‘Paddy’ Padmanabhan

Unilever Chaired Professor of Marketing. Academic Director - Emerging Markets Institute INSEAD Asia Campus
‘Paddy’ Padmanabhan is a Professor of Marketing and has co-authored “The Phoenix Encounter Method”, a book that will take you through a new method of leadership thinking. He has served as a visiting professor at the Kellogg Graduate School of Management, Northwestern University, and INSEAD (Europe campus). His current research focuses on business opportunities and challenges in the developing economies, economic crises and their implications, pricing and supply chain management. He is among the top 250 most highly cited scholars in the world in the field of economics and business.
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There are 4 authors for this book, and you talk about the Phoenix Encounter Method. How much of this method did you have to use to complete the book?

The book was actually an outcome of conducting the ‘Encounter’ in our executive programmes. Ian (one of the co-authors of the book) is the Programme Director for the Advanced Management Programme. The participants in this course are typically CEOs and it is a 4 weeklong fully residential programme. Around 2016-2017, more people were coming to talk to Ian on all the new and upcoming technologies that they were hearing about such as Cloud, IOP, Robotics, 3D printing and AI. These CEOs have a degree or even a PhD in Chemical Engineering and run big businesses but did not know what to make of these new technologies. They wanted to know how to connect the dots to understand what this means for them as a leader and how it would affect their businesses. So, the four of us got together and decided that instead of providing solutions like a consultant, we needed to provide a way for people to think through and come up with a solution that is grounded in their own context. A method which allows them to orchestrate their thinking and help make sense of what it would mean for them as a leader and for their business.

We made the ‘Encounter’ method as part of the executive programme. But afterwards, participants started to ask us to do an Encounter for them in their organisations with their senior leaders. However, syncing calendars across so many leaders became a challenge. A suggestion was made to put all the information together and allow the companies to run the Encounter themselves. And this is how the book was born. Along with the book, we also released an implementation manual, which gives the do’s and don’ts in running the Encounter method.

Change is not for the leaders alone; it needs to happen throughout the organisation. Leaders must be a mentor not just for the Doers but for the Dreamers as well.

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Much of what is captured in the book is about the destroyer archetype and the creator archetype. There are many businesses who can benefit from this.

The idea that we came up with is not new. What is new is the method. We work with a lot of senior executives. In many companies, the senior leaders are taken to an offsite retreat, where they are put into rooms and asked to think of new innovative ideas and activities and come up with a wish list for the next 2-3 years. Most leaders would be able to do this, but what we started to notice was the ideas were incremental. It was based on past success and was fairly risk averse and conservative. They were not willing to step out of their comfort zone. This was particularly true with companies that were doing well.

We realised that we need to change people’s mindsets. And one way to do this was to take them out of their old job and put them in a new job where they have unlimited resources with no constraints and their one objective is to kill their old business. The new list of points that they came up with was very different to the list created in the offsite retreat. This is not a new idea though. In the 1970s there was a scholar named Jim March in Stanford, who wrote that managers are of two types – one who has the exploitation mindset and the other who has an exploration mindset. The former thinks about what got him this far and looks at exploiting it a little further. They feel the engine is working and they can milk it a little more. Although required, most companies do only this and therefore burn out in the long run. They must create the resources to let people who are very good at exploration to think differently. So, what companies need is a mix of both.

Politics is always at play in Organisations? How does the Phoenix play politics?

The phoenix is not meant to even think about politics. We have designed something that the CEO can use to figure out how to get an idea and make it part of the DNA of the organisation. Sometimes participants from the programme, or from companies that we consult with, would come to us and ask us to run an Encounter with the board. What they are trying to do is deal with politics. They have realised that if they go to the board and say that they have found the answer, it will never work. Change is a journey, and each CEO has to figure out how to orchestrate this journey for their organisation. This is also not a one-off journey. It needs to be done once every 6 months or once a year. The world keeps changing and the world in 2022 will look very different to the world in 2024. Thanks to Covid, all companies have realised that disruption can happen anytime and in any form. So, we have to change our mindset and also understand that doing this as a one-off exercise will not pay dividends in the long run.

What are your thoughts on innovations on top of this method?

We have talked about technology in the book and about how everything has become more digital, more social and more connected. We have also talked about new models, ecosystems and platforms. Everything in the book has probably become obsolete by now. We need to realise that we have to do ‘scanning’ and this needs to be an ongoing exercise. The problem with people is that their networks are very narrow. With Covid, companies got disrupted by people who they never thought were their competitors, so if you only think of your existing competitors, you will be blindsided. The phoenix method in that sense is robust as it is about changing your mindset and thinking and not providing you with a solution. It gives you some habits to pick up, practice and create a much more diverse network and to keep asking, What is new? and from there to ask, What if? You can then think about what that would mean for you as a leader and your business. So, the answers that you arrive at will be context driven but the questions are not.

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What are you working on next?

We are now looking at doing a book with a collection of case studies. It is about leaders and organisations who say the status quo does not hold and that they need to change. We then look at the things that they have done to change and look for the common denominators across these companies, which are from different sectors and geographies. What you realise is that there is no industry or country that has a monopoly on innovative thinking. So, we are looking at collating 6-8 stories of companies that have figured out how to reinvigorate themselves. This does not happen just by investing more money. Everything within the company has to change. We go back to Exploitation and Exploration or Doers and Dreamers as we call them in the book. The doers take the engine and makes it work better. The dreamer wonders why we are doing it ‘this’ way.

One of the issues that we have noticed is that HR in companies have excellent KPIs to evaluate ‘Who’ is doing and ‘Who’ is doing better. This is required, but if we asked them, Who are the dreamers in the organisation? How do you spot them? What KPIs would you create for them? They struggle to answer as these are much harder questions. Six out of ten ideas from a dreamer will fail. If we evaluated them based on this, then nobody will raise their hand to come up with new ideas. Change is not for the leaders alone; it needs to happen throughout the organisation. Leaders must be a mentor not just for the Doers but for the Dreamers as well.

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