The CEO Role of the Past Is Now Impossible to Do
In No Ordinary Disruption you outline the four global forces that will underpin the next 50 years of economic activity, with each one being greater in significance than the Industrial Revolution in the United Kingdom. It is fascinating, but how do you propose people interpret these predictions and adapt accordingly?
There is a set of capabilities that you need to start building in order to deal with this huge disruption. Firstly, you must be externally focused, so that you understand the changing world around you. Secondly, you need to build agility into your organization to adapt quickly to the changes that you observe. Finally, you have to have a positive outlook. These disruptions will create a lot of opportunity that an optimist will identify, whereas pessimists will only see the damage to their existing business model. To spot this opportunity, there needs to be more reliance on data and analysis, and less on intuition.
We read about how the pressure on CEOs in particular continues to rise. There have been a number of high profile instances of chief executives having to take time off due to stress or workload pressures. The trends that you have identified appear to be underway and the ground seems to be moving under the feet of a lot of sitting CEOs. What do they need to do to adjust today, let along during the next 50 years?
The CEO role of the past is now impossible to do. The challenge for the CEO is to think about building a team. They need to have a strong CFO who can pick up a lot more of the work that the CEO would have done historically, whether that’s resource allocation, where you put your talent, or where you put your M&A money.
And as we think about how the world will change, there will be a need for a different set of skills. The CEO will need a really good HR Director who understands Big Data and can identify and attract the best talent. The talent pool isn’t big enough for this if you’re only looking at HR Directors. You have to look at existing business leaders who have a track record for people leadership and move them over.
We often hear that international experience is beneficial for an executive. Two of the disruptive forces you identify are technology and great connectivity, which will continue to make the world a smaller place. Will executives and executive search consultants have to look at careers differently in the future?
Successful executives will need to do three things very well. Firstly, they are going to need a much better sense of technology and how disruptive it will be. Secondly, customers and investors are going to be from emerging markets. It will be very hard to operate without knowing what is happening in these markets. Thirdly, the nature of people’s jobs will change during their lifetime. For example, radio took 38 years to reach 50 million people, so seasoned print journalists didn’t have to adapt to it. Twitter took nine months to reach 50 million people. With the way that technology is disrupting things, employees will need to retrain in their lifetime. Building the DNA to learn new skills is going to be much more important.
You describe how in the decades ahead, half of the world’s economic growth will come from 440 cities – and many these, like Kumasi in Ghana or Santa Catarina in Brazil, would be difficult for today’s executives to identify on map. Professional services can often struggle to establish a footprint in emerging economics as the clients are not accustomed to paying for services, rather than products. What advice would you give to executive search firms in light of the moving economic center of gravity?
Executive search is not the only service sector that faces this problem. We have to educate our clients and prove ourselves in these markers, in the same way that investment banks and law firms have to. My advice is to find a few high profile companies, conduct a search on their terms, but make it very clear that you are doing it at a different price. If they come away from the experience and understand the value of your work, then you’ve made your point.