Beyond Skill Sets To Capacities: A CEO’s Guide To Transformative Leadership In Complex Times
Beyond Skill Sets To Capacities: A CEO’s Guide To Transformative Leadership In Complex Times
Discover the map of how leaders transcend conventional business thinking and achieve success in the VUCA and BANI world.
After reading my first essay (How To Take Your Leadership Development To The Next Level?) on Vertical Development, I hope you have a good sense of how important vertical or adult development is to your success as a leader in today's complex business landscape.
As Alis Anagnostakis says:
“While the case for vertical development seems strong, do we have research proving that late-stage (more developed) leaders are better equipped to thrive in the disruptive, challenging environment of today? The answer is: Yes.”
She points to studies by David Rooke and William Torbet, Brandt & colleagues, Boiral & colleagues and Barret Brown.
The leaders such as Satya Nadella, Yvon Chouinard, Indra Nooyi and Hubert Joly are later stage leaders. They demonstrate the following traits:
Ability to see and work with whole systems
Comfort with paradox and complexity
Integration of multiple perspectives
Focus on long-term, sustainable impact
High self-awareness and continuous personal development
Capacity to challenge and transform fundamental assumptions
Balancing financial success with broader societal and environmental concerns
In this second essay, I will dive into the following:
The Key Principles When Using The Map. As with any map, it’s important to know how best to use the Vertical Development Leadership Map.
The Vertical Development Leadership Map. Discover the map of how adults develop or mature into transformative leaders.
The Characteristics Of The Seven Stages Of Vertical Development. Learn what each type of leader looks like at each stage to help you figure out which one most applies to you.
The Four Most Common Leadership Stages. A deeper dive into the four stages I most commonly encounter with the leaders I work with.
Connect The Right Stage To The Right Context. It’s not all about becoming a later-stage leader. What counts most is the fit between the challenges you face and what you are able to do. We’ll examine a real-life business challenge and demonstrate how an early-stage leader may approach it differently from a later-stage leader.
Why Do You (and I) Want To Know What Stage Of Development The CEO is at? I will explain why it's critical to know where they are on the vertical development map when assessing a CEO you are about to invest in or recruit.
Introducing Vertical Development Into Your Organisation. Ideas on how best to bring vertical development into your organisation.
The Key Principles When Using The Map
Before I draw the map (or the house, as you’ll see later), there are 10 key principles to consider when working with the map.
It’s a map not the territory. Like any map, it’s a representation and not the territory - meaning it’s a model and not the only way of understanding adult growth. You will have heard of the old saying, “All models are wrong, but some are useful” - this map is one of the useful ones.
All stages have their heroes. Each stage has its positives. Many different worldviews are needed for the many different roles in a business.
It’s not a race to the top. Later-stage leaders are not guaranteed to behave maturely or be better at their jobs! They are still humans who are susceptible to reactivity and poor behaviour.
The right stage for the right context. Rather than aim for the top, the best leaders continually adjust their worldview to best respond to the context they are in. Think of these worldviews as being like control dials you get on a sound system - you adjust them to improve the quality of the sound experience.
Company culture influences how you show up. Your later-stage thinking may go into hiding if the company’s culture is earlier stage than you are and you want to fit in.
You are not a stage. The stages represent a potential stage in someone’s development, not a fixed personality type or leadership style.
Hold the stages lightly. Don’t get obsessed with your stage or anyone else’s. The stages are indications of how you might develop.
A stage is like a centre of gravity. It’s the lens you tend to use to make sense. Doesn’t mean you use it all the time.
Falling back into earlier stages is common. Under stress or in certain contexts, we can unconsciously revert to early-stage behaviours.
Each stage includes and transcends the other worldviews. As you develop later-stage worldviews and grow your capacities, you retain the lower worldview sense-making and behaviours (i.e. you are capable of doing all the things that you previously did).
The Vertical Development Leadership Map
There are various models of adult-stage development:
Robert Kegan, a Harvard developmental psychologist, developed the Constructive-Developmental Theory. It has five stages of development, of which the latter four are attained in adulthood.
Jane Loevinger introduced the Ego Development Theory. It describes a series of stages individuals go through as they develop a sense of self and understanding of the world. Susanne Cook-Greuter and William Torbert later expanded this theory to include more advanced stages.
William Torbert identifies seven ‘Action Logics’. Each represents a distinct way of understanding and engaging with the world.
I am going to focus on William Torbert’s model for this essay. I am an authorised practitioner of MyWorldView - a measurement tool developed by Global Leadership Associates (GLA) that helps you locate your current worldview in a range of seven. As the BBC would say, there are other measurement tools available, but I have planted my flag on MyWorldView. I have received a lot of help from the GLA community but it’s also worth saying the whole community of Vertical or Adult Development radiates an abundant and generous vibe.
In 2005, David Rooke and William Torbert published their Seven Transformations of Leadership in the HBR, describing seven stages successful leaders progress through.
The stages represent different worldviews, as defined in my first essay on vertical development - how one makes sense of the world.
The Characteristics Of The Seven Stages Of Vertical Development
As you read through the descriptions, think about what resonates with you.
You should find that you can see yourself in all of the stages depending on the context you are thinking of, the people you are with and whether you are reflecting on the present or past.
Also, you should see more of yourself on one or two of the stages - this is probably where your centre of gravity is i.e. which stage you tend to see the world from.
As you read the stage descriptions, consider:
Which stage reflects your current perspective?
How has your dominant stage shifted over time?
Which stage do you aspire to develop towards, and why?
The 4 Most Common Stages Leaders Show
The table below based on shows the percentage distribution of leaders compared to the normal adult population across the 7 stages, based on GLA's vertical development assessment tool:
It shows the top 4 stages for both leaders:
Redefining
The Achiever
Transforming
The Expert
Compared to the general population:
The Expert
The Achiever
Redefining
The Diplomat
Leaders are much more likely to be in The Achiever (33.7% vs 30%) or Redefining (52.1% vs 11%) stages than the total adult population. This is to be expected as leaders have to deal with more complexity. Leadership challenges push leaders to develop more sophisticated worldviews, and companies tend to select individuals with later stages of development for leadership positions.
Connect The Right Stage To The Right Context
Every stage has its positives and negatives. You should aim to find the right stage for the right context. But that in itself doesn’t guarantee mature and wise behaviour.
Different challenges, contexts and cultures require different and/or multiple worldviews.
Let’s look at a real world business scenario and how to use the map effectively.
Business Scenario - Digital Transformation
Background
Implementing a cloud-based property management system (“PMS”) that integrates tenant communication, maintenance requests, rent collection, and data analytics.
How The Expert or The Achiever Leader Approaches The Digital Transformation
The leader announces the new PMS at a company meeting, highlighting its features and the expected 30% increase in efficiency. They set a 6-month deadline for full implementation across all properties.
Training sessions are mandatory for all staff. When some employees express concerns about the learning curve, the leader dismisses these worries, stating that the system is user-friendly and that everyone will adapt quickly.
As implementation progresses and some tenants complain about the new online portal, the leader pushes forward, convinced that people will see the benefits once fully operational.
In summary, an Expert or Achiever leader might approach this transformation as follows:
Focus heavily on the technical aspects and features of the new system
Set ambitious deadlines for implementation across all properties
Communicate changes in a top-down manner, emphasising efficiency gains
Measure success primarily through quantitative metrics (e.g., time saved, cost reduction)
View resistance as a problem to be overcome through training or enforcement
Make decisions unilaterally or with a small group of trusted advisors
Struggle to adapt the plan if unexpected challenges arise
How The Redefining or Transforming Leader Approaches Digital Transformation
The leader initiates the digital transformation by holding focus groups with employees, tenants, and contractors to understand their needs and concerns. They form a cross-functional team to evaluate PMS options and create an implementation plan.
The rollout begins with a pilot program at a few properties, incorporating feedback to refine the system and processes. Regular town halls are held to share progress and challenges and gather suggestions.
When some staff struggle with the new system, the leader encourages peer-to-peer mentoring and adjusts the timeline.
They also work with the PMS provider to customise features based on user feedback.
Throughout the process, the leader emphasises that the goal is not just efficiency but improved service and work experience for all stakeholders.
In summary, a Redefining or Transforming leader might approach the same transformation like this:
View the PMS implementation as part of a larger organisational and cultural shift
Engage stakeholders (employees, tenants, contractors) early in the process to gather input
Create a flexible, phased implementation plan with room for adaptation
Focus on both technical and human aspects of the change
Encourage experimentation and learning throughout the process
Communicate transparently about challenges and adjustments
Measure success through multiple lenses, including employee and tenant satisfaction
See resistance as valuable feedback to be incorporated into the process
This example illustrates how leaders at different developmental stages might approach the same digital transformation, highlighting the contrasts in their decision-making, communication styles, and overall strategies.
Why Do You (And I) Want To Know The Development Stage The CEO Is At?
If I were investing in a business or recruiting a new CEO to lead digital transformation, I would want to know where the leader is on the map. And you should, too!
Knowing where someone is on the developmental map will help me tailor my approach to maximise the chances of a successful investment or recruitment. Here are some key decisions that understanding a leader's developmental stage could help you make:
Assess whether the CEO’s developmental stage aligns with the complexity of challenges the company is facing
Set expectations of how the CEO will behave
Guide how to structure the support and governance around them
Direct the focus of the learning and development for the CEO
Although most of you will conclude that you would prefer to see the approach taken by the Redefining or Transforming leader, in reality, you would want to go deeper into the context. For example, if the company is in financial trouble and in a turnaround situation, the Expert and Achiever approach may be better suited. In a turnaround you need a leader to be decisive and to make things happen quickly.
How To Introduce Vertical Development Into Your Organisation
One way is to ask the leader or a number of team members to complete a Vertical Development Assessment such as MyWorldView. This is a great way to kick start the conversation about the whole topic, but not everyone is ready for it, and you need to manage it properly so that, for example, there isn’t too much focus on striving up the ladder of stages (which in itself is good evidence of where the leader’s centre of gravity is!).
My preference is to use an assessment, i.e., introduce it through the front door! I know not everyone thinks Vertical Development is a force for good, but in my experience, it is. Getting leaders to focus on how they think (Vertical Development) and learn new skills (Horizontal Development) is more likely to be transformative. Vertical Development is one way to help leaders develop, particularly in this BANI world, the updated VUCA.
However, you don’t have to mention Vertical or Adult Development to bring it into your organisation.
Here are two of the ways I have introduced Vertical Development (ethically!) through the back door:
Exercise #1 - The Empty Chair Exercise
Purpose: Develop the widest set of perspectives to create space for stronger solutions
Set up: Place an empty chair in the room during a meeting or problem-solving session.
Identify stakeholders: The group lists key stakeholders or perspectives relevant to the issue at hand.
Inhabit perspectives: Team members take turns sitting in the empty chair, each "becoming" a different stakeholder.
Speak from new viewpoints: The person in the chair speaks from that stakeholder's perspective, expressing their concerns, needs, and ideas.
Active listening: Other participants listen attentively, asking questions to deepen understanding.
Rotate and repeat: Continue until all important perspectives have been explored.
Integrate insights: After the exercise, the group discusses new insights gained and how they might inform decisions or solutions.
Apply learning: Encourage participants to habitually consider multiple viewpoints in their daily work.
Watch out: The adaptive way to take multiple perspectives is to try to understand them to learn from them—not to change them.
This exercise helps leaders develop the habit of absorbing a wider range of perspectives and stretching beyond normal thinking patterns. Most of us want to listen to people who espouse viewpoints similar to ours—this exercise, if practised continually, will help you really listen to conflicting perspectives without immediately wanting to change them.
Exercise #2 - The Cynefin Framework Exercise
Setup: Create a large diagram of the Cynefin framework with its five domains: Clear, Complicated, Complex, Chaotic, and Disorder (in the centre).
Introduce domains: Briefly explain each domain's characteristics without using jargon.
Collect scenarios: Have participants write down current organisational challenges or decisions on sticky notes.
Place scenarios: Ask team members to place their sticky notes in the domain they think best fits each scenario.
Discuss placements: Encourage group discussion about why scenarios were placed in particular domains.
Explore responses: For each domain, discuss appropriate response strategies:
Clear: Apply best practices
Complicated: Analyse and consult experts
Complex: Probe, sense, respond
Chaotic: Act quickly to stabilise
Disorder: Gather more information
Move scenarios: As understanding deepens, allow scenarios to be moved between domains.
Reflect on insights: Discuss how different domains require different leadership approaches and decision-making processes.
Apply learning: Encourage participants to use this framework in their daily work to assess situations and choose appropriate responses.
Watch out: Neglecting "Confused": The central Confused domain is often overlooked, but it's crucial for recognising when we don't yet understand the nature of a situation.
Elevate Your Leadership Through Vertical Development
As we've journeyed through the stages and the map of Vertical Development, from the tactical Opportunist to the visionary Alchemist, we've seen how leaders like Satya Nadella, Yvon Chouinard, Indra Nooyi, and Hubert Joly embody the traits of later-stage leadership. Their ability to navigate complexity, embrace paradox, appreciate contrasting viewpoints and drive systemic change exemplifies the power of vertical development.
The map we've explored is a guide for your own leadership evolution. By understanding where you are and where you can grow, you open doors to new perspectives and capabilities that can transform not just your leadership but your entire organisation and beyond - fostering innovation, engagement, and sustainable success.
Remember, this journey isn't about racing to the top. It's about developing the agility to apply the right mindset to the right context, expanding your capacity to lead in an increasingly complex world. Every stage has its strengths, and true mastery lies in integrating all of them.
As we've explored, from the Empty Chair Exercise to the Cynefin Framework, there are numerous ways to subtly introduce vertical development into organisational culture. These practices serve as catalysts, sparking the kind of transformative thinking that turns good leaders into great ones.
Your journey through these stages is deeply personal. Perhaps you recognised aspects of yourself in multiple stages or felt drawn to the possibilities of later stages. This self-awareness is the first step in your vertical development journey.
As you move forward, consider:
Which stage most closely aligns with your current leadership approach?
What would change in your organisation if you could access later-stage perspectives more consistently?
What one small step could you take today to begin stretching towards your next stage of development?
In a world where many leaders find themselves "in over their heads," Vertical Development offers a lifeline—not just to stay afloat but to surf the waves of change with grace and purpose. It's an invitation to evolve, to see with new eyes, and to lead with wisdom that transcends traditional boundaries.
The challenges of our time - from climate change to technological disruption - demand leaders who can think and act at higher levels of complexity. By embarking on your vertical development journey, you're not just growing as a leader; you're expanding your capacity to create meaningful, lasting change in your organisation and the world.
The vertical frontier of leadership awaits. Where will your journey take you?