One day after the interview for this profile, the CrowdStrike computer outage led to the grounding of hundreds of flights, cancellation of rail services and delays in payroll processing, among other disruptions around the world. It was caused by a single error in an antivirus software update to commercial Microsoft systems.
The incident simultaneously illustrated not only the vulnerability of IT systems, but also the global interconnectedness of technology, business operations and customer needs, and the sheer unpredictability of economic life.
Executive leadership, observes Doug Lowther, CEO of cybersecurity specialist Irdeto, is now more about risk management and resilience than conventional strategic planning. “The last five years have seen so many unexpected things that you can essentially completely throw out your strategic plan for 2019. The world has just evolved in a completely different direction. I would say 90% of businesses are facing some fundamentally different circumstance from what they had expected. And so management teams are probably less about the formal stuff, the business plans and strategies and so on, and more about creating a very strong cohesive team that’s able to react as things happen and make the right decisions.”
The EMBA at IMD nurtured his ability to create an innovative and responsive business team. The Discovery Expedition to Silicon Valley revealed the agility with which an innovative business cluster relocates talent towards an emerging need and invests in new technology. This informed his response when, in the mid-2010s as CEO of Irdeto, two of his software engineers identified a growing cybersecurity risk around connected vehicles, and proposed a modest investment to explore the emerging opportunity. He backed them, resulting in a thriving new division for the firm, whose background up until then had included video entertainment and securing critical infrastructure.
“It was not something that we had put in the strategic plan of the company. There was no top-down, analytical process that said, this is a good industry for us. It was a bottom-up entrepreneurial idea that became something quite innovative and powerful.”
“You should be listening at least as much as you’re talking”
The rounded education of the EMBA also covers macroeconomics and geopolitics. Doug completed his EMBA at around the time of China’s entry into the World Trade Organization. There followed several years of what could be called peak globalization, a period of relative optimism for closer trade and relationships across all peoples.
“Of course, things have shifted radically since then, and this just underlines the need for continuous learning because the world is very different from what generations of managers had come to expect. There’s a lot more conflict in the world now. There’s a lot less trust.”
As guest speaker at the graduation ceremony for the EMBA class of 2022, Doug gave a talk that addressed the issue of the “crisis of trust”. He described how trust had fallen between countries with a rise in geopolitical rivalry, while within societies “mutual respect and social cohesion are in decline”.
Social media has intensified the prejudices of many online tribes. Re-establishing trust is a duty not just of political leaders but all in the leadership cadre – in corporations, the media, public services and academia.
While the specialism of Irdeto is heavily technical, the issue of trust is central to its mission. Trust begins at home, and one of his priorities taking over as CEO in 2015 was talent development and retention. He inherited an employee reward and retention program, and reformed it to encourage continual learning. A focus on employee engagement, if based on an established business model, could breed complacency, and is more effective when linked to an innovative culture. To this end, he arranged that high performers would receive a bursary for continued personal development, as well as training and opportunities to network with top leaders. Previously they had received a cash prize.
The company’s “Top talent” program, offered to around 10 of the 1,000 employees each year, offers high-level training opportunities – such as the IMD Future Leaders program – and mentoring from a top executive, for employees who are already high-performing. “People who have participated in this top talent program are about 60% more likely to stay with the company in the long term.”
Another insight from his EMBA years was a transformation in his understanding of the nature of regulation. He recalls how Professor Ralf Boscheck managed to condense the essential content of a full course in macroeconomics into a single lecture. This is learning that remains fresh in his mind more than 20 years later. Particularly illustrative was discovering how regulation can help to promote growth and success within a free market. The example he cites was the establishment by European regulators of the non-proprietary 3G, later 4G and 5G mobile network which created a level playing field for mobile phones and other devices. Meanwhile, more proprietary network architectures developed with less regulatory oversight all ultimately failed in favor of the European standard.
“The last five years have seen so many unexpected things that you can essentially throw out your strategic plan for 2019”
The mental agility required to challenge one’s viewpoint – Doug had previously regarded regulation as an administrative burden that while often necessary, would tend to slow down businesses – highlights a central paradox of the leader’s role, which is that true authority requires a degree of humility. This includes “openness to realizing you might not always be right,” he says. “And you should be listening at least as much as you’re talking.” If we genuinely help the people around us to succeed, as he told the graduating class of 2022, we become more effective as leaders.
