The Systems Leader: Mastering the Cross-Pressures That Make or Break Today's Companies - Hardcover

Siegel, Robert E.

Hardcover

ISBN 10: 0593800044 ISBN 13: 9780593800041

Publisher: Crown Currency, 2025

Synopsis

NATIONAL BESTSELLER • A groundbreaking blueprint for mastering “cross-pressures” in a rapidly changing world, teaching leaders to execute and innovate, think locally and globally, and project ambition and statesmanship alike—from a Stanford Business School lecturer and consultant to some of the biggest and most innovative CEOs

Since the start of this century, businesses have confronted a series of extreme and constant disruptions, including technological upheavals, a pandemic, and a global financial crisis. As a result, today’s leaders, from startup founders to the managers of global giants, face unprecedented pressures from their bosses, investors, customers, peers, suppliers, and employees. For many, it’s a recipe for disaster.

Part of the problem is that these challenges, while acutely felt, are rarely articulated in a way that makes them graspable and actionable. Robert E. Siegel has witnessed the impact of these cross-pressures from different perspectives. As a lecturer in management at Stanford’s Graduate School of Business, an operator, a venture capitalist, and a consultant, he sees countless teams of managers, at all sorts of companies, struggling to lead their companies into the future.

Featuring exclusive lessons drawn from inside the business world, including from the CEOs of Accenture, Mubadala, Kering, Wells Fargo, and Box, this essential guidebook teaches readers “systems leadership,” Siegel’s holistic framework that helps leaders understand and master five key dimensions where they are likely to feel contradictory pressures:

• Priorities: The need to succeed at both execution and innovation
• People: The need to project both strength and empathy
• Sphere of influence: The need to focus both internally and externally
• Geography: The need to think both locally and globally
• Purpose: The need to pursue both ambition and statesmanship

“A compelling exploration of the challenges facing today's business leaders.”—François-Henri Pinault, chairman and CEO, Kering

“The Systems Leader is Robert Siegel at his best. . . . Wise, perceptive, and always practical.”—Julie Sweet, chair and CEO, Accenture

About this title

About the Author

Robert E. Siegel is a lecturer in management at the Stanford Graduate School of Business. He is also a venture partner at Piva Capital, a general partner at XSeed Capital, and sits on the board of directors of multiple companies. He is the author of The Brains and Brawn Company: How Leading Organizations Blend the Best of Digital and Physical.

Excerpt. © Reprinted by permission. All rights reserved.

Chapter 1

The Perfect Storm of Chaotic Forces

Pulled in Opposite Directions

In the mid-2000s I ran the video surveillance division of GE Security—one of the most rewarding leadership roles I’ve ever held. We made high-quality cameras and video recording equipment for companies that needed to protect their operations. It was a strong B2B model, with great people, steady growth, and reliable profitability. There was just one problem: our industry was about to transform from analog to digital video. You didn’t need to be a futurist to see that digital was on the path to becoming both cheaper and more convenient. If my unit didn’t get a jump on that transition, it wouldn’t matter how much our customers liked us or how much they trusted the GE brand. They’d switch to another vendor for video surveillance.

We needed to offer a high-end digital video management system, which is basically a complex software overlay that controls networked cameras, the recording process, and the storage of digital video. We could either build our own proprietary system or acquire one from an independent company. This was a classic “make or buy” problem that almost every company confronts at some point and learns to evaluate. By my math, it would take six quarters to build and launch a digital offering (perhaps twice as long as it would take to buy one), and we’d have to invest roughly $2.5 million of our $19 million quarterly profit for each of the six quarters. But that would still be cheaper than buying someone else’s system, and it would give us the freedom to control quality and features. The investment seemed like a no-brainer to maintain our lead in the market.

When I explained the situation to my boss, however, I learned that it wasn’t so simple. He said that if I wanted to spend an additional $2.5 million per quarter on R&D, I’d need to come up with an extra $5 million in revenue to make up for it, so our profit wouldn’t take a hit. I replied that if I had an easy way to sell another $5 million of product per quarter, wouldn’t we already be doing it? I stressed that if we stuck with our status quo offerings, this year’s numbers would still be strong, but we’d start bleeding customers within eighteen to twenty-four months.

We danced around this topic for more than an hour, as I tried to convince my boss that this was a necessary—even existential—step for our business. He kept challenging me to find some other way to pay for it. If the world was changing, it was my responsibility to sustain our current profits while also finding more money to pay for the investment.

Finally, my boss shook his head and firmly said, “Rob, you’re missing the point. In eighteen months, you and I will both be in different jobs. And the way for you to get a better new job is to hit your targets this year. The CFO is counting on your profits to subsidize other divisions that underperform. If you spend all that money on R&D, you and I will take the pain this year, but we’ll get none of the benefit in two years when revenue comes in. By then you and I will be in different roles.”

I was simultaneously stunned, perplexed, and angry. How had my boss become so short-sighted? Weren’t leaders like us expected to pursue long-term domination of our markets? Why were my personal incentives misaligned with GE’s best interests? Why couldn’t we find a way to execute now while still innovating for the future?

Long story short, my unit didn’t invest in the digital transition, and I left GE a few months later. One reason I departed was my frustration that the balance between short-term and long-term priorities in my division had gotten out of whack. I hated feeling pulled in opposite directions.

About eighteen months after I resigned, I got a surprise call from the senior executive at GE who had replaced my former boss shortly before my departure. We hadn’t worked together long and weren’t close, but Jerry was a thoughtful and considerate leader. He told me that the scenario I’d predicted was coming true; the video surveillance unit had already lost half its revenue to competitors with digital offerings. “We should have listened to what you said before you left.”

I replied, “Jerry, I really appreciate the update. But I didn’t want to be right—I wanted us to win. I wanted us to do the right thing. It still breaks my heart that the company couldn’t get it done, and I feel like I failed because I couldn’t convince people to go with the plan.”

I didn’t have a name for my experience at the time, but the dynamic I encountered at GE was a classic cross-pressure. The top leaders talked about investing for the future, but other parts of the company signaled that short-term financial targets were the true priority. The unspoken culture was that leaders who missed their numbers lost their jobs, but if you found a way to ignore the problem you could pass the buck to someone else.

Another thing I didn’t realize at the time was that such cross-pressures were becoming both more common and more intense, for all sorts of leaders around the world.

Future Shock on Steroids

A book that has stuck in my head for many years is Alvin Toffler’s Future Shock, the 1970 bestseller about the forces transforming the world. He argued that the rate of change of different aspects of modern life—technological, economic, and social—had accelerated beyond the human capacity to adapt to those changes. As a result, Toffler predicted drastic upheavals in how we all lived and worked. He was decades ahead of his time in foreseeing the boom in personal computers, migration into cities, and fast fashion. He even popularized the phrase information overload to stress that humans weren’t built to handle the modern flood of continuous inputs.

It’s ironic that from the perspective of the 2020s, Toffler’s era looks calm and peaceful, a paradise of easily manageable information flows. Those of us who began our careers before ubiquitous cell phones, email, and texting can get nostalgic for leaving work fully behind at the end of each day. The limits of technology enforced a de facto work-life boundary; almost no boss would call us at home except in a true emergency. So I wasn’t surprised when a 2023 poll found that “most Americans would prefer to live in a simpler era before everyone was obsessed with screens and social media, and this sentiment is especially strong among older millennials and Gen Xers. Asked whether they would like to return to a time before . . . people had wide access to the internet and smartphones, 77% of Americans aged 35–54 said they would.”

Despite his foresight, even Toffler couldn’t have predicted the stunning acceleration of technological change since roughly the year 2000. Every piece of data that could be digitized has been digitized. Every product that could be upgraded by adding microchips, Radio Frequency Identification (RFID), and/or GPS has been upgraded. Robotics and artificial intelligence are improving every month. Cybersecurity is becoming a bigger and more complex challenge. Even accidental glitches, like the global computer outage caused by a faulty CrowdStrike software update in July 2024, now have bigger consequences than ever before. Staying on top of these and other technological changes, as well as knowing how to deploy resources to address them, can be overwhelming for most businesspeople.

You’ve probably seen a graph similar to the one on the next page, showing the steadily increasing pace of mass adoption of transformative technologies. Whereas it took almost fifty years for a quarter of Americans to have used electricity, more than thirty-five years for the telephone, and twenty-five years for television, it took less than three years for more than 25 percent of the U.S. population to use Generative AI. How much shorter will future lines be for other innovations that are still ramping up? We’re living through Future Shock on steroids.

Moreover, tech innovation is only one of multiple forces that can contribute to a widespread sense of dislocation and unease. And those other forces have also accelerated in this century—arguably just as rapidly and distressingly as technology has accelerated. A piece in The Guardian in December 2019 offered a pithy and dismal summary of the 2010s: “There have been crises of democracy and the economy; of the climate and poverty; of international relations and national identity; of privacy and technology. There were crises at the start of the decade, and there are crises now. Some of them are the same crises, unsolved. Others are like nothing we have experienced before. . . . It has often felt as if everything is up for grabs—from the future of capitalism to the future of the planet—and yet nothing has been decided.”

Edition details

• Publisher: Crown Currency
• Publication date: 2025
• Language: English
• ISBN 10: 0593800044
• ISBN 13: 9780593800041
• Binding: Hardcover
• Number of pages: 272