Leaders must be nimble tri-sector athletes, to borrow a phrase from Harvard political scientist Joseph Nye: able to engage and collaborate across the private, public, and social sectors. Dominic Barton, Worldwide Managing Director, McKinsey & Company
In the spring of 2010, David J. Hayes faced the worst crisis that had ever confronted somebody in his position—U.S. Deputy Secretary of the Interior. An explosion aboard BP plc’s Deepwater Horizon oil drilling rig in the Gulf of Mexico had killed 11 crewmen and ignited a seemingly inextinguishable fire. The oilrig sank and caused the largest offshore oil spill in U.S. history.
Hayes was a natural choice to help lead the federal government’s response to the unfolding crisis. As “Chief Operating Officer” of the Interior Department, he oversaw 70,000 employees in 23 agencies, including the National Park Service, the Fish & Wildlife Service and the Minerals Management Service, the agency responsible for regulating offshore drilling. But his task was much broader—he had to work with his counterparts in other agencies and orchestrate the work of countless organisations across the public, private and social sectors, including the US Coast Guard and Department of Energy; BP and its suppliers Transocean and Halliburton; Greenpeace and dozens of citizens’ and environmental groups representing those directly affected by the spill.
A long summer ensued for Hayes. “For 86 consecutive days, the Deepwater Horizon story led the television evening news,’’ he said to us. “It was the most complex situation that I had ever had to deal with—but I did have an advantage. I had worked in the business sector and the non-profit sector. I knew many of the people in those organisations, and those I didn’t know I could quickly understand. I could stand in their shoes, which gave me a head start as we grappled to solve the crisis.” Eventually the concerted efforts to cap the spill were successful, and work began to restore the Gulf to something like its previous state.
Hayes’ CV reflects the depth and breadth of his experience in government, business and the non-profit sectors. He had already served one term in the Clinton Administration as Deputy Secretary of the Interior (1999–2001); he had chaired the environment department of an international law firm, representing major corporations on issues of environment, land and resources; and he had held several part-time posts in the non-profit sector—as Chairman of the Environment Law Institute, Senior Fellow for the World Wildlife Fund, and a professor in Stanford University’s Woods Institute for the Environment.
Why we need “tri-sector athletes”
Hayes is what Professor Joseph Nye of the Harvard Kennedy School calls a “tri-sector athlete”—which he defines as leaders able to engage and collaborate across the business, government and social sectors. From his own experience, Hayes can appreciate the needs, aspirations and incentives of his counterparts in the other sectors, and he can speak a common language with them.
Deepwater Horizon demonstrated why these attributes are so valuable in a crisis. Another prolonged crisis—the financial and economic crisis triggered in 2008—illustrates the divide between sectors more starkly. It has elicited little collaboration between the sectors, and engendered a triangular blame game, with each “side” accusing the other of causing, and exacerbating the crisis.
This persistent sense of crisis and underlying trust deficit has stimulated fresh and challenging ideas about the very system of capitalism. Underlying this discussion is the realisation that we live in an increasingly inter-connected tri-sector world. We face trisector challenges, and we need tri-sector solutions in areas such as educational access and standards; energy security and resource productivity; climate change and environmental protection; national security and civil liberties; financial inclusion and social innovation; smart urbanisation and sustainable agriculture; and most fundamentally, sustainable economic growth and employment.
Sustainable outcomes to these issues require the sectors to collaborate in a more integrated way, but a collaborative approach to governance depends upon the people who lead our institutions, people whose perspectives and biases tend to reflect their past careers and future aspirations. If the mindset and professional experience of most leaders are confined to a single sector, it is much harder to generate tri-sector solutions to modern challenges.
Hence the governance of our market economy needs to focus considerably more attention on the individual people who lead our institutions—and specifically on the necessary experiences, mindsets and aspirations our leaders should have. More of our leaders should be tri-sector athletes such as Hayes, Paul Martin from Canada, and Rosanna Wong and Bernard Chan from Hong Kong.
What distinguishes tri-sector athletes?
Tri-sector athletes come in many forms— some started in business, others in government; some operate at the highest of organisations, others in their local communities; and some are building tri-sector careers at a much younger age than previous generations.
We have identified in these leaders of tomorrow a set of common characteristics with six unique and important attributes.
Professor Nye told us in an interview that a tri-sector athlete is not a leader who “needed to have worked in each of the three sectors— and certainly not to the same extent”. Instead, “they would need an appreciation of each sector, and of the interdependencies between them,” he said. “I also meant that they could contribute to public value whatever sector they were working in.”
Our research has confirmed most tri-sector athletes not only value public purpose in their careers, but also that it’s often what draws them into government and/or the non-profit sector. But most seek to reconcile that sense of mission with other important motivations— notably to meet their financial needs, as well as the desire to have influence and even power over important events. Tri-sector athletes also factor in important secondary motivations— such as lifestyle, interesting work and compatible colleagues.
These aspirations can often seem in conflict with each other, notably on financial compensation. The most typical path of tri-sector athletes has been to start and stay in business until they can ‘afford’ to move into government or the non-profit sector. There are rare cases of leaders who started out in the non-profit sector, even in Hong Kong where the ‘businessfirst’ model is particularly acute. Notably, this model is becoming more and more prevalent.
Dr. Rosanna Wong serves as a great example of a non-profit leader who has crossed sectors. Her primary focus and entire working life has been with The Hong Kong Federation of Youth Groups. Due to her outstanding leadership, she was then appointed to the Legislative and Executive Councils of the Hong Kong Government and subsequently appointed to different corporate boards, including HSBC Asia Pacific and Mars Inc. as Global Advisor. As she reflects, “I am a very rare animal. In the 1990s, the government usually would not appoint people from NGOs to very senior positions. Even when I was appointed to the board of HSBC Asia Pacific, I was the only person not from the business sector. But now there are more people in other corporate boards with a background like me.”
Finding the right balance of motivations, and the most appropriate path to pursue them, is crucial for any tri-sector athlete to build a successful and fulfilling career and make the most public impact.
Professors Anthony Mayo and Nitin Nohria of Harvard Business School defined the term “contextual intelligence” in their 2005 book, The Greatest Business Leaders of the 20th Century, as “the ability to understand an evolving environment and to capitalise on trends”. This attribute is not only a touchstone for successful business leaders but also a vital skill of tri-sector athletes.
Diana Farrell, former Director of the McKinsey Global Institute, drew upon her ability to adapt to a different context when she joined the Obama Administration as Deputy Director of the National Economic Council. She found it especially important to “understand the structural and temporal elements of context, and to assess how they differ within and between sectors” as “this gives rise to some skills and capabilities being more appropriate than others”.
It is clear that successful tri-sector athletes place special emphasis on accurately assessing the differences—whether fundamental or nuanced—within and between sectors, and on navigating these differences as fluently as possible.
While the first two attributes of successful tri-sector athletes might be described as “soft skills”, the third is more akin to the “hard skills” that form the basis of most professional education programmes. Each of the three sectors has fostered a distinctive skill set that represents the standard focus for that sector.
Public sector leaders create legal and public policy frameworks to govern and direct society. Private sector executives allocate scarce resources to the most attractive and strategic opportunities, and apply appropriate techniques to drive financial and operational efficiency. Non-profit leaders typically focus on generating innovative service models for social good—with typically more limited resources than the public or private sectors, but more freedom to operate than either.
Former Prime Minster of Canada, Paul Martin, agrees that skills he learned in one sector were transferrable to the others. “Having been in business, did that give me a different insight when in government? And having been in government, did that give me additional insight while being a social activist? The answer is absolutely.”
As Finance Minister in the mid-1990s, Martin’s transferrable skills came to bear as he had to tame Canada’s deficit—the highest of the G7 countries at the time. Moody’s had just lowered its rating on Canada’s foreign currency debt and the Wall Street Journal called Canada “an honorary member of the Third World”.
In response, Martin unveiled an ambitious multi-year plan to cut deficits that engaged stakeholders across business, government, and social programmes. The success of his plan required stakeholders to understand its longterm benefit, and to buy into necessary but difficult sacrifices. By 1998, Martin introduced a balanced budget, an event that only occurred twice in the previous 36 years, and by 2002, Moody’s restored Canada’s domestic and foreign currency debt ratings.
Martin largely attributes his success to creating an inclusive national consultation process and in particular, credits his private sector experience with deepening his engagement and credibility with the business community— a key constituent in the process.
Likewise, Joshua Gotbaum has built a set of skills that has served him well in all three sectors. He has served in each of the last three Democratic Presidential administrations (Carter, Clinton and Obama) and is currently serving as Director of the Pension Benefits Guaranty Corporation. In between (i.e. during the Reagan, Bush 41 and Bush 43 years), he built a private sector career as an investment banker with Lazard, a non-profit leader with the September 11 Fund, as a manager & consultant in business turnarounds; and as a private equity investor.
He points out that each of his government roles has required him to work extensively with counterparts in the private sector, especially his current role overseeing the pensions of actual or potential bankrupt companies. “First, having an understanding and comfort with the language of business, the language of strategic planning, the language of finance and accounting, are essential when you are working at the interface between government and business—including procurement, regulation, a whole variety of things.”
“Second, familiarity with the practices of business is often useful when you’re thinking about reforms to the internal management practices of government. That gives you a set of analogous practices that can generally be adapted, rather than just adopted, in government.”
Building a tri-sector career often starts with a nudge or a suggestion by people close to you who work in different sectors—so personal and professional networks are crucial to career progression. But we also find that tri-sector athletes leverage their networks to build their top teams; and that they convene from within their networks to address complex tri-sector issues. Nonetheless, while cross-sector relationships help tri-sector athletes expand and renew their knowledge, diversify their perspectives, and take creative approaches to problem solving, leaders should be careful to have objective and transparent hiring processes to avoid nepotism and patronage.
Michael Bloomberg, a notably successful tri-sector athlete, has made use of his integrated network during his time as Mayor of New York. Many within his business network have taken positions in City Hall—playing full or part-time roles in reforming education, economic development and infrastructure— such as former Justice Department official and corporate lawyer Joel I. Klein. Bloomberg has drawn others into more or less formal taskforces and working groups as well.
Prepared for the road less travelled
Where tri-sector athletes excel is to transcend the inertia that comes from being successfully entrenched in one sector. The majority of people are risk-adverse when it comes to careers. Tri-sector athletes are willing to take major and sometimes counter-intuitive deviations in the standard career path.
John Berry, who currently runs the U.S. Government Office of Personnel Management, did not set out to be a tri-sector athlete but illustrated the typical response of one when he said, “It was definitely not conscious, not deliberate but I think I was always open to it.”
Bob Hormats, a long-time Goldman Sachs executive and current U.S. Under-Secretary of State, added a crucial observation—“I’m a believer in Louis Pasteur’s famous saying— ‘In the fields of observation, chance favours a prepared mind’.”
Bernard Chan, Hong Kong-based President of Asia Financial Holdings, member of the Executive Council of the Hong Kong government and Vice Chairman of the Hong Kong Council for Social Services, reflects that his involvement in the public and social sectors was driven by need, not a pre-determined plan. “It wasn’t until 1998 after Hong Kong returned to China and the size of parliament grew, that a new seat in the Legislative Council opened up for the insurance sector. I didn’t know anything about politics, but my local peers asked me to run for the seat—and while I hesitated at first, I decided to try and ended up winning the election.”
Such openness to take the “road less traveled” enables an attitude that embraces, rather than resists, the opportunities and accompanying risks that extend experiences and skills across sectors.
David G. Bradley, chairman and owner of Washington, DC-based Atlantic Media Company, helped us identify the pinnacle characteristic unique to the best tri-sector athletes. Based upon decades of observing successful people in government, business and non-profits, he noted, “There is nothing more exciting in life than to see somebody who is a real subject-matter expert, building a movement for change.” A significant proportion of our tri-sector athletes are indeed subjectmatter experts, having focused on a particular issue across all three sectors—what we call an “intellectual thread”.
Hormats reflected, “I have worked on the international economics and financial system across all three sectors for the last 40 years.”
Lael Brainard, the U.S. Under Secretary of the Treasury for International Affairs, worked in both the private and public sectors, and ties those experiences together in her current role. She told us, “In my work developing policy proposals and undertaking financial diplomacy, I find it to be particularly helpful to be grounded in a model of how fiscal and monetary policy interacts with financial markets and the real economy.”
Another tri-sector athlete with an intellectual thread is Carol M. Browner, a pioneer of the environmental movement for nearly 30 years. “I went to law school in the late 1970s, straight out of college, because I thought I would do something in civil rights to represent people.”
Her work with a mid-80s citizen action group focused her attention on environmental legislation—and she found something about herself: “I liked working with people to affect change in Congress. It was a very exciting time. Environmental and citizen groups had great leverage to affect debate at that time.”
She translated that passion into a career in Congress where she became then-Senator Al Gore’s Legislative Director (1988–1991), and then as President Clinton’s Environmental Protection Agency Administrator (1993– 2001). Before working as President Obama’s Assistant for Energy and Climate Change, she partnered with her former colleagues to build a private business now known as the Albright Stonebridge Group.
“I have this interesting experience of having affected legislation, having developed legislation as congressional staff, and then I moved over to the executive branch to help implement the laws that I had worked on. I have been fortunate to have been able to see things from the activist side, the legislative side, the administrative side, and the business side.”
An uncertain future
Our initial inquiry into the condition of trisector leadership has been both inspiring and worrying. While there exists remarkable people who have built, or are building, brilliant careers that centre on resolving some of society’s most pressing concerns, these role models are the exceptions that prove the rule.
The tri-sector athlete concept is clearly not the prevailing leadership model in our society. This is worrying because the challenges we face are most definitely tri-sector issues. The risk remains that if we continue our unstructured, silo-ed and disconnected approach to leadership development, we will fail to address our most fundamental challenges in modern society.
For practical purposes, we cannot expect that most leaders in our society would have played full-time roles in each sector, as Professor Nye noted. It is key, however, that more leaders have a substantive appreciation for, and an ability to tap into, each of the sectors. There are practical ways to nurture such an appreciation—for instance through crosssector leadership education and training and “bite-sized” cross-sector work opportunities.
Finally, to see a rapid and sustained increase in the number of tri-sector athletes in decision-making positions, we need a movement in society—one where every citizen demands and expects more from their public sector representatives, private sector executives, and non-profit sector leaders.
There are reasons to hope as leaders of organisations are increasingly under pressure to make longer-term decisions, engage all their stakeholders and act more responsibly. This will require a new leadership model for the 21st century—one where tri-sector athletes thrive.
Nick Lovegrove is the Executive Chairman of Tri-Sector Forum and a Senior Director of Albright Stonebridge Group. Email: decb64_bmxvdmVncm92ZUBhbGJyaWdodHN0b25lYnJpZGdlLmNvbQ==_decb64
Matthew Thomas is the Executive Director of Tri-Sector Forum and member of the World Economic Forum Global Shapers community. Email: decb64_bWF0dGhldy50aG9tYXNAdHJpLXNlY3Rvci5jb20=_decb64