Comparisons have been made between the challenges faced by both Nike and Boeing in recent years, leading to resignations of their CEOs. Though they were both highly criticised for being finance-focused rather than product-focused, a more honest appraisal will show just how arbitrary their strategies and subsequent failures were.

Let’s start with Boeing. Much has been said about the shift from product to financial goals after the merger with McDonald Douglas in 1997. This is often regarded as the origin of the drift away from supreme aerospace engineering, towards a more ruthless maximising of profits. What has not been mentioned is that subsequent leadership after the merger - Harry Stonecipher and later James McNerney - saw the employment of stricter ethical standards, more rigorous compliance rules, and most importantly, the development and delivery of the 787 Dreamliner which has been an overriding success, in both engineering and commercial terms.

Their combined tenure (12 years) spanned half the post-merger period before the more recent 737max crashes. Though the crashes were caused by poor compliance and engineering, we cannot simply attribute the culture change to the merger in 1997. The CEOs that followed the duo were working on the backdrop of a company at the top of its game in ethics, compliance, and engineering. How easily it would have been for subsequent CEOs to infer that other parts of the company needed more attention. In fact, this is what we expect new CEOs of companies with successful products to do.

And so we come to Nike and John Donahoe. His focus was to accelerate digital transformation of the company during a covid pandemic, and to take product directly to the consumer, cutting out middle-men wholesalers. Again, what about this approach does not appear to be anything but sound, even necessary. Digital transformation was, after all, essential for successes in retail (think Asos and Amazon), for hospitality (think Air BnB), transport (think Uber), and others? Competitors in their industries have consequently had to adjust and digitise rapidly.

I have personally conducted executive search assignments in financial services, utilities, and telecommunications. Across the board, technological and digital transformation was the c-suite’s top priority. In one case, I hired a CTO for one of the world’s largest personal wealth managers who was mandated to create an app for their consumers that would make their analysist and wealth managers redundant. Now, this is the direction personal wealth management is going. I saw highly experienced chiefs discarded and replaced with left-field innovators who would deliver the next generation of digital and AI-driven apps for their consumers. That is not to mention what I saw in universities during my time in academia.

What do the stories of Boeing and Nike tell us about leadership? First, CEOs are condemned to choose a certain path – a vision – for their organisations, and they must take full-account for their failures. John Donahoe, for instance, despite the challenges at Nike, can nevertheless be praised for having a clear, innovative, plausible vision. The world of executives, comprising many who climb the ladder, who play safe, who only set out to implement what they know, and do all they can to avoid accountability, should, in my opinion, still look at John Donahoe with respect for what he tried to do.

Secondly, vision always comes at a cost, and sometimes that cost is too high. We have all met those driven leaders. Over 90% of non-CEO executives that I have worked with are only too ready to tell me about the flaws of their CEOs – that they are poor listeners, that they cannot think outside their own boxes, that they see straight but cannot look to the sides, that they are biased and only wish to hire people who think like them. Who would be a CEO? Putting aside how justified these complaints may be, the job of a CEO only too easily brings out these attributes, which are themselves counterparts of a type of psychology that is necessary for success. 

It is my personal view that there is a systematic failure of CEO training when it comes to forming company vision and strategy (following on from Peter’s Principle, Dilbert’s Principle, and the Dunning-Kruger effect). This is what I mean by success and failure being more arbitrary than we think. If John Donahoe had not pressed for digitisation, for instance, and Nike failed, the backlash would have been even worse. The only raw materials a CEO takes into their vision are i) their experience in their industry, ii) their experience in leadership, iii) knowledge of the market. I could get 5 shortlisted candidates for any CEO position of a Fortune 500 company, get them to articulate their vision using these three resources, and they would give me 3 to 5 different strategies, all equally plausible. Since we have not seen the future, we have little to discern which is more plausible than the other, at least rationally.

My view is that it takes something much more to make an executive’s strategy successful. CEOs and all executives must be trained in counterfactuals – the ability to assess possibilities and the laws governing the proximity of each possibility with reality; causal thinking – the ability to sift through all the statistics and correlations and discern actually causal links; paradigm thinking – the ability to step out of one’s own way of thinking in order to understand an opposing point of view (and no, it does not just happen by listening intentionally as standard behavioural leadership training proposes; your mind has to “see” what others as saying on their own terms, with their values and assumptions).

Executive search taught me one thing which has now led me to our work in Ipsus – in an organisation, it is leaders that need the most help of all. The pressures on them as executives and as human beings are overwhelming. This help comes from having an optimal and highly collaborative executive team, which is what we do at Ipsus. Then, their L&D must deliver the latest training in decision-making, then in stakeholder management which is the main route for insights which they themselves cannot provide. It is my view that the CEO market is full of the John Donahoes and Dave Calhouns. The line between success and failure may not even come down to soundness of strategy, as necessary as it is. There is not much these two former CEOs did that the majority of other CEOs did not do and succeed.