Measuring Return on Leadership

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The importance of measuring Return On Leadership cannot be emphasized enough. Listen to Alan Murray, CEO of Fortune Magazine as he interviews Avnet CEO Phil Gallagher and Indiggo CEO Janeen Gelbart. They discuss the importance of Return On Leadership as a metric, and how Indiggo delivers software solutions that can help Avnet make abstract strategy more concrete.

Full transcript

Alan Murray: Hi, I’m Alan Murray, CEO of Fortune. And I’m here with Janeen Gelbart, who’s the co-founder and CEO of Indiggo. Hey, Janeen.

Janeen Gelbart: Hi. Great to be here.

Alan Murray: And, Phil Gallagher, who is CEO of Avnet. Hi, Phil.

Phil Gallagher: Hi, Alan, how you doing?

Alan Murray: So, Janeen, I want to start with you. You measure something called Return On Leadership. What is that? What’s return on leadership?

Janeen Gelbart: Our Return On Leadership product, is an AI-driven technology product that measures four aspects of leadership execution, that we believe are fundamental to successful leadership. Strategic clarity, connection to purpose, leadership alignment, and focused actions. So, it integrates purpose with strategy, creates strategic clarity using the Pareto principle of 80/20, consistently focusing individual leaders on the most important drivers, and then enables them to act on that with focus every day.

Alan Murray: Give an example of what the technology can do.
Janeen Gelbart: So imagine you’re the leader of a large enterprise and you’ve articulated a meaningful purpose, and you’ve also got a strategy, and you’ve got a lot going on. You’re you’re looking at diversity and inclusion. You’re looking at sustainability, you’re looking at productivity. All the things that organizations are focused on today. At the same time, you have people hybrid, working from home. And you also have a global organization with leaders and managers all over the world. So, how do you connect individuals to something as abstract as purpose and something as abstract as strategy? Because, strategy is abstract until it becomes concrete in the doing. And so, we’ve always found that large organizations really struggle to execute. What we’ve done is create simplicity out of complexity, by having a product that helps every individual to commit to not only know very clearly what the organization’s purpose is, then to overnight,  have 10,000 managers knowing how their role contributes to the purpose. But even more importantly, what’s most meaningful to them about their organization’s purpose, so that they feel that they have something they believe in, and that’s inspiring to them, that’s driving their everyday work.

Alan Murray: Fascinating. Phil, Avnet has been around for a hundred years now. Congratulations on hitting the century mark. You chose Indiggo. Why? What was the problem you were trying to solve when you chose Indiggo?

Phil Gallagher: It fascinates me, return on leadership. I think a lot of times we look at that as a soft measurement, if you will. A soft return, sometimes difficult to measure. The more you get that to a hard ROI, the better off the company’s going to be. So, we’re excited about looking at this and engaging with it. I think what Janeen said at the end there is really important. I think where companies and leaders, leadership, go wrong is over-complicating things. I like the simplicity. We’re at 145 countries, but if you just look in the Americas, we have branch offices, right? And you’d go into the Philly branch and it’s doing phenomenal. You go into Chicago or another branch, and they’re not doing well. Well, what’s the difference? Same computer system, same phone system, same inventory. It comes down to the leadership. So how do you come up with better objective measures to really hold ourselves accountable, frankly, and to help our teams and our leaders? This isn’t about punitive. This is making them better. How do we do that?

Alan Murray: And, Janeen, I mean, it’s a fairly simple thing as a leader to say, “Okay, we’re going to come up with a purpose, and we’re going to put it on a piece of paper, and we’re going to paste it on the wall.” It’s a quite a different thing to take that purpose and really integrate it into strategy and execution. How does Indiggo do that?

Janeen Gelbart: We do two things. The first thing is that we are maniacally focused on focus. So our whole solution is built around the 80/20 Pareto principle, where we help individuals to always identify what are the 20% of drivers that are going to create 80% of the value now, because we know that strategy isn’t static anymore. Strategy has to be agile. and how do you drive agile at scale? So, the first thing is, we help people to really understand very quickly, what’s important to the organization now. So we’re keeping purpose top of mind as they work.  And you can’t manage what you don’t measure. So we’re making these intangibles tangible, because we’re connecting it to daily work and we have the associated metrics. Then that really indicates, as Phil said, Philadelphia versus another office, you can immediately see where they’re struggling.

Alan Murray: Phil, what really strikes me listening to Janeen is, she’s talking about pretty sophisticated technology to capture these metrics on leadership. Avnet of course, has lived the history of technology over the last century. You’ve seen all these things develop. It must be pretty impressive to see what you can do with a technology platform like this today.
Phil Gallagher: Well, yeah, no question. I think their timing is impeccable, frankly. If you look what’s happened in the last year in particular, the world of digitization , pick a year – It’s accelerated five years, 10 years, what have you.  It’s the adaptability and the change management around it that people now have realized in the last year and a half, 15 months, whatever it’s been, we need to adapt. Okay, and you need to try new platforms. Look how fast we turned to Teams and Zooms and all that. I mean, it was within days, right?  I think the technology’s there and it’s the adaptability and the learning curve that takes more time.

Alan Murray: I don’t know about you, but I have a strong sense … On the one hand, the folks at Fortune have been incredibly productive during this past year and have been able to work in a distributed environment very effectively, but the culture and the alignment has weakened. You need tools to keep people all pushing in the same direction, don’t you?
Phil Gallagher:  Productivity, transactionally might be up. So is burnout, and stress, and isolation and all those other things that go with it, because people are on these Zooms and Teams and maybe not taking a break. So transactionally, yeah. Productivity might be up, but is it value transaction, right? Is it just, are we checking boxes?

Janeen Gelbart: The problems that we’re facing with the distributed workforce, lack of alignment, lack of strategic clarity, lack of connection to purpose, lack of focused action. All of the things that ROL, Return On Leadership measures were all problems before, there was no easy way to align.

Phil Gallagher: First of all, the strategy is very difficult to do over Teams or Zoom. We did a strategic, long-range planning session. It was not nearly the same as being able to really have that interactive dialogue. But the thing about Indiggo, what you just talked about there to get everybody aligned. And, what’s the direction you’re giving it? Some did really well, and other groups didn’t do so well. Right? And so, if you can drive some consistency across that with your platform, that can really help the leadership team at all levels.
Alan Murray: So, what we’re really saying here is that technology tools can certainly help drive alignment, help drive transparency, help make sure everyone is on the same page and is bought into the purpose and the culture.

Before the pandemic hit, there was a lot of talk about the rise of stakeholder capitalism and how it’s not enough for businesses to just please their shareholders and their owners. But, they have to take a more conscious approach to making sure they’re looking after their employees, their customers, the communities they live in and the natural environment, all of those things.  How do these things we’re talking about, these leadership metrics we’re talking about fit with this whole notion of stakeholder capitalism?
Janeen Gelbart: So they actually, I think, are a key missing component of stakeholder capitalism today, I think it’s really important to have the accountability of leadership metrics related to purpose. If we say purpose matters and purpose, it does matter to stakeholder capitalism. Let’s measure it. Let’s see if the individual managers and leaders in your organization feel connected to that purpose. We have the word stakeholder and the word capitalism, which means that we’ve got the human side and we’ve got the business side.   Return On Leadership brings metrics for both. Are you delivering on what matters most? Because, this is all about simplifying strategy, executing on what matters most, but also do your people feel empowered and do they feel engaged? I hear a lot of CEOs saying, “We want to empower decision making down the ranks. We don’t want to be a top down organization.” But in order to do that, and in order to enable your people to make strategic choices while they’re working, you need a shared framework for what matters, and that connects to purpose. And so that’s how I think that these metrics can really bring a missing component to stakeholder capitalism.

Alan Murray: Phil, how do you think about stakeholder capitalism?
Phil Gallagher: Well, I’ll tell you, Alan, it is a topic that is gaining steam, and you’ve got stakeholders and then Janeen covered it well. You got your employees, your customers, your suppliers in our world. Then you get the shareholders, the environment, the community. These things are picking up steam and they should, and diversity and inclusion. We have a board meeting obviously every quarter, and this is a topic that we cover every quarter. It just cannot be a slide anymore, or marketing, as we spoke earlier. It’s got to be something that is defined, because your employees’ll call you out first, by the way. And then how are you measuring it?

Alan Murray:  Yeah. It’s a big change. So last question, let me ask the two of you. Janeen you’re in Washington, DC, Phil you’re in Phoenix, Arizona. How did you two connect? What brought Indiggo and Avnet together?
Phil Gallagher:  My chairman of the board, Rod Adkins, has been engaged and he’s our chairman, and a great chairman. And he introduced me to this opportunity.
Janeen Gelbart: Return On Leadership is for forward-looking leaders and forward-looking organizations, because it’s predictive metrics of the future. And we found Avnet to be incredibly open and hungry to really, to get tools that are going to help them be a company of today and tomorrow.
Alan Murray: Well, thank you both for taking on this complicated, but really important topic. It was a pleasure to be with you both.

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