When we speak to those responsible for securing senior hires, it is striking how often they say, “we don’t want somebody who just sits in their office all day looking at spreadsheets.” More and more, the role of the CEO is being seen out of the office, on the frontline engaging with employees and customers. In recent years, I have seen a real shift in the requirement for CEOs to get out of the boardroom and spend time with customers – sharing plans and being collaborative and inclusive.
Equally as important is being seen and approachability. The perception of the CEO as some sort of heroic or demonic figure with the power of life and death has gone. The modern CEO has to be a ‘people-person’ willing to break out of their own ‘bubbles’ and engage with all of their company’s stakeholders. Crucially, the ability to communicate will become their number one asset. My own view is that technical competence, such as financial literacy or engineering qualifications, will increasingly become a secondary rather than primary asset.
“Being internally focused is a big part of my job, more than ever before. No matter how big your business is, everyone must feel included. I try to do three things – hold large group meetings for big messages, have smaller groups where you can have more intimate conversations and then just bumping into people.“
Forbes magazine recently identified caring, or the ability to persuade everyone to believe in you and that you care about the business, as one of the key attributes of a modern CEO. Our experience is that authenticity, empathy and caring are key CEO attributes. Those who appear to be transparently ‘out for themselves’ and fail to take people with them are unlikely to succeed in any walk of life. When that individual is the head of an organization, the impact of a lack of empathy is magnified.
Does this all sound a bit wishy-washy? Maybe, but a lot of millennials are purpose and morally-driven, demanding to work for employers who do the right thing and they are willing to move on if it doesn’t.
It is a cliché but, if you look after your employees, it is more likely that those employees will look after your customers. Caring, empathy, authenticity, call it what you will, are values that more and more Chairmen, Non-Executive Directors and those responsible for senior-level hires are looking for.
“If you don’t care for the people that you manage, whose livelihoods depend on you, then why are you there in the first place and who put you there?“
Forbes identified three Cs (credibility, competence and caring) but I would identify a fourth, namely curiosity. Whether you are in a rapidly-changing business or a very mature one, curiosity, to try and look into the future and see what you should be doing next, is critical. The CEO has to be curious about the parts of a customer’s business that their company does not already touch, or those areas where a customer is having difficulty.
The key aid to curiosity is the ability to really listen to others. It may sound strange, but for me a good CEO is like a sponge, absorbing knowledge, data ,and opinions: in other words, actively listening, before making decisions. It was the late Mark McCormack who said: “Talk less – you will automatically learn more, hear more, see more – and make fewer blunders.” His words have never been truer.
“You’ve got to be interested and beyond interested, curious. That’s a big thing for us at the moment in terms of trying to map out how we can help customers have a better experience.”
I’ve lost count of the number of times a CEO has said to me, “I’ve got a great FD who frees up so much time for me.” That is a sign of a teambuilder. CEOs face enormous challenges when they take on a new role and the ability to build and nurture a management team is one of them. That doesn’t mean just importing new people. The best CEOs try and work with the tools they are given, encouraging and nurturing senior managers to work with them by instilling a clear vision of where the organization is going.
The modern CEO will also be an alliance-builder, generating close working and productive relationships with key areas of the business, not just those at Board or exec-level. In recent times, with increased digitization, the relationship between the CEO and the CMO (Chief Marketing Officer) or CIO (Chief Information Officer) has become increasingly important. Similarly, the ‘talent war’, that most organizations are engaged in, demands a close and collaborative working relationship with HR.
The key point is, the modern CEO cannot just restrict his or her interactions to the traditional ‘exec’ team if they are to succeed. They need to work hard to build teams with talent from within and without.
“I still think there is a lot of cronyism in UK management. I hear them say “I will bring my team, because they will do what I want” People bring two or three others with them. I never support that“
We’ve talked a lot about the softer skills, such as communication and empathy, but the modern CEO still needs to be able to develop a strategy and then deliver it. The transition to CEO is very much one of developing bespoke strategies based upon the different issues that an organization is facing. In other words, not trying the same thing just because it worked before, but assessing the current issues and then developing a strategy to solve them. According to McKinsey research, exceptional CEOs are more likely to order a ‘strategic review’ in the first six months of their reign than less successful leaders. The modern CEO must embrace, and cannot be afraid of, challenging convention and developing new strategies that can open up new markets, protect existing positions and, crucially, energize the company.
“There are some very basic rules, in my view, to making a transition into a CEO or senior leadership role. Matching strategy to situation is one of the first I look for.”
Technology and a new generation of workers are influencing businesses massively, specifically how they communicate both internally and externally. Modern CEOs have to understand, adapt and evolve with technology, comprehending the new technological landscape and how it is affecting their businesses and their teams. In a recent survey by Forbes magazine, over 90 percent of CEOs agreed that IT-led innovation is essential for business growth and that they were willing to devote substantial new capital investment to deliver their goals. Leveraging new technological advancements is no longer optional. The speed of disruption will only increase: who would have thought as little as five years ago that the world’s largest taxi company, Uber, would own no vehicles. The modern CEO must embrace technology and technological change.
“Digital skills are absolutely key. I don’t think you can, as a leader, use the excuse of “I’m not up to date with these things” or “I don’t do social media”. These excuses are for CEOs of the past.”
One of the big themes of the last two decades has been the drive to get more women into senior positions. In the future, enabling organizational diversity, in its fullest sense, will be the task of the CEO. Only three percent of women holds CEO positions and only 17 percent of FTSE 100 boards are women. Positive change that brings greater diversity will only come from the highest levels of an organization and modern CEOs need to be leading from the front. If you look at the likely demographic of the UK in ten years’ time, the proportion of white males in the electorate will change significantly, with people of different ethnic backgrounds becoming more prominent. These changes to the workforce and their different expectations will challenge the existing norms of all businesses, and it will be the job of the CEO to deal with it and map a route forward for their organization. Diverse teams that more closely reflect the customer base or local population of the organization is patently good for business, so this is not about tokenism, it means putting strategies in place to recruit talented people from different backgrounds at all levels of the organization.
“I was lucky around my exec team because I 7 had two roles [to fill], the HR Director and the Marketing Director. I was determined that one of those two, at a minimum, would bring diversity to the team.”
“We recruit from within” is an old maxim that we hear a lot, but our experience is that sometimes it takes an outsider to affect real change. This is particularly true in turnaround situations, that require a specific skillset from potential CEOs. In my experience, a fresh approach provides perspective. Those who have been in place too long often do not have the breadth of experiences that provide perspective. In other words, they ‘can’t see the wood for the trees’ or are restricted by ‘group-think’ or personal relationships built up over many years and maybe set in their ways. Can long-servers take on the role of the outsider? Yes, but it’s always more difficult and requires, from the new CEO, a fresh look at the cultural norms and a balance between experience and a new perspective.
“It is important to have perspective, be able to apply it and put it into the context of what you are dealing with. If you haven’t got perspective, and you haven’t got experiences, it is difficult to apply them.“
In modern organizations, decisions will not be driven from the top-down, but rather more organically, pulled from the edges of an organization, particularly where team members are closest to customers and, increasingly, working directly in partnership with them. The most effective leaders will be those who embrace and are not threatened by this empowerment, which will be less hierarchical and will require open and humble approach to leadership. The traditional ‘topdown’ command and control structure is redundant for many reasons, but perhaps, most importantly, because it rarely energizes an organization and certainly does not listen to the voice of customers.
The modern CEO must embrace new structures that empower middle, lower management and customer service staff to make decisions and take responsibility – after all, the most important three feet in any organization is the space between front-line staff and your customers. People respond to this liberation and are energized by it. Many years ago, I worked closely with a very experienced senior manager at Barclays, who was in his role when Matt Barrett took over as CEO in the late 1990s. His words have always stayed with me: “I’ve never seen anybody energize an organization like this.”
“It is not just about the CEO’s role in the future. In B2C businesses, consumers will have more choice and will be more savvy. In B2B there will be more switching and less loyalty. Therefore, other roles in the organisation will become more important in the future.”
The ability to make decisions is a time-honored attribute of the CEO, but that ability, to take in information, think quickly and act, or not act, decisively, is becoming more and more important. The pace of the modern business world, the opportunities that become available, the threats that are unseen but can suddenly become existential all demand clear decisive information gathering, thinking and action.
There is often no time for obfuscation or over-deliberation – seeking the perfect answer is the enemy of getting to a timely, reasonable outcome. I’ll close with a quote that perfectly sums up the ability to be decisive. “Decisiveness is a characteristic of high-performing men and women. Almost any decision is better than no decision at all.”
“We are entering into a world, particularly with digitalisation and the increased pace of things, where even if you get things wrong, making the wrong decision fast is better than making the right decision extremely slowly.“