Excerpt from Harvard Business Review
Today’s CEOs are operating in a new landscape, with society and business becoming more intertwined and a broader group of stakeholders registering their expectations and demands. In order to succeed, they must become a different kind of leader, looking beyond the company they steward to shape the ecosystem in which they operate. After talking to 105 board directors (many of whom are also CEOs) from 311 North American companies in 11 industries, the authors identified five steps today’s leaders must take: 1) Know the players in your ecosystem in order to unite around a shared objective; 2) Empower your senior leaders to be thought partners, surrogates, and successors who an hold their own with investors, board members, and employees; 3) Cultivate an enterprise mindset and an ecosystem skillset that will enable you to act beyond your typical sphere of influence; 4) Build the infrastructure of industry coalitions, public-private partnerships, and other organizations who can connect the ecosystem; and 5) Anticipate the risk that comes from navigating a messy set of social and political interests. While the risks are real, so is the potential for upside.
It wasn’t so long ago that a CEO was considered effective if they could keep the board of directors happy, appease shareholders, and steer clear of major reputational issues.
Not so anymore.
The job description for the CEO of today is being crowdsourced, with nearly every segment of society - employees, customers, suppliers, governments, and activists - registering their expectations and demands.
Today’s challenges, from the pandemic to ESG to ongoing efforts to address racial inequity, have only woven business and society more tightly together. Indeed, 86% of CEOs and board members see business and society becoming more interconnected, and two thirds of the American public want CEOs to take a stand on social issues.
To better understand the implications of this shift, our firm, Korn Ferry, spoke with 105 board directors, many of whom are also CEOs, from 311 North American companies across 11 industries.
Our research shows that as the job description for CEOs changes, so too does the playbook for successful leadership. The stakeholder landscape is much more vast and rugged, meaning there’s more room for missteps and error. What was once out of scope is now in scope, forcing difficult decisions about who and what to prioritize. And the skills required to be successful extend beyond traditional command-and-control tactics to things like influencing without formal authority.
If CEOs are to deliver against their new job description, they must become a different type of CEO: an enterprise leader who also stewards the ecosystem in which their business operates, including customers, suppliers, partners, competitors, governments, and their local community. While few CEOs have assumed this role in full — it’s early enough that very few of us have it figured out — our research shows that these five steps are key to getting started:
CEOs of the future will need to demonstrate an insatiable appetite for learning like no generation before them.
Much like an ecologist in the Great Barrier Reef would study the interrelationships of birds, corals, fish, and mollusks to one another and to their environment, a CEO must map her ecosystem. While these organisms compete with one another, they are also interdependent. The same is true for the CEO and the broader ecosystem in which she operates, which is why she must seek to understand:
- The strengths, vulnerabilities, and relative contributions of each ecosystem member
- The linkages that make entities dependent on one another
- How outside influences could compromise the ecosystem’s ability to function
- The extent to which ecosystem members are able to adapt to a changing environment
- And perhaps most importantly, where there are opportunities for mutual benefit, competition notwithstanding
CEOs who step into an expanded role leading and shepherding the ecosystem must unite their various stakeholders around an objective that is advantageous for each player individually, as well as for the broader ecosystem. It could be a shared interest or a shared pain point, but more and more, it’s a shared purpose, with companies desiring to enter into mission-driven partnerships that advance business objectives while serving the greater good.
Consider, for example, the Valuable 500, a coalition of 500 CEOs who are innovating for disability inclusion in the workplace, or OneTen, which brings CEOs together with a common goal of advancing one million Black individuals who do not have four-year degrees into family-sustaining careers over the next 10 years.
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