The makeup of the C-suite continues to change, redefining roles based on new organizational structures and company and market expectations, as well as demanding a wider breadth of skills to succeed in today’s business world.
In 2014, Deloitte wrote that the modern C-suite has undergone three distinct eras of structural change, beginning with a “command and control,” generalist approach to management in the 1920s and having shifted in the last couple of decades to a “divide and conquer,” functional specialist model, wherein members of the executive team manage a specific function of the organization for which they have some knowledge and considerable experience.
With the abundance of executive specialists, it can be difficult to operate together and with a broad enough vision when functional objectives, biases, and resources have different agendas and approaches.
Today, in what Deloitte calls “C-suite 3.0,” leadership must strike a balance between the needs of the two former management models, which calls for “alignment and coherence” in order to keep up with a globalized, shifting business landscape and to do so in a logical, unified manner companywide.
Most market commentators, as well as former and existing C-suite members, can agree on one thing: In the digital age, the speed that organizations and operating models need to transform increases drastically year over year—arguably, as quickly as every 18 months. How, then, have C-suites been adapting to this rapidly changing environment, and what is next in its perpetual evolution?
Whose Role Is It Anyway?
Being customer-centric is an important quality that applies not only to the chief marketing and sales officers but also to the entire C-suite, including the CEO. Gathering consumer data and smart customer analytics is imperative to winning with customers in a globalized and highly competitive business arena. Because all functions must be in tune with the customer, data has also become vital to improving all segments of an organization, from marketing to investment strategies to product support.
Although CIOs historically have been the gatekeepers of company information and data material, huge amounts of data are now also being collected within finance, marketing, human resources, and other business functions, making it difficult to organize and disseminate that information companywide. The exponential growth in available and trackable data to drive significant enterprise decisions and alter commercial strategies has led to the birth and rise of chief data and analytics officers (CDAOs).
New technological advancements—like artificial intelligence (AI), robotic process automation, virtual and augmented reality, and cloud computing—are making it easier for CDAOs and all corporate officers to collect, sort, and apply those data into tangible, actionable results.
Each C-leader, even the CEO, must therefore be more adept in emerging technologies, as well as their commercial benefits and associated risks, to implement them throughout the company and enhance performance. In its 2018 Digital IQ Survey, PwC says that only 54% of executives from the top financially performing companies that it surveyed believe that their leadership is digitally savvy.
Although customer-centric technology has necessitated having a world-class chief technology officer, the opportunities and challenges surrounding AI specifically have become so apparent that the introduction of chief AI officers (CAIOs) is also becoming more prevalent. One reason CAIO titles exist is so that companies can deeply engrain AI into their business’s operations and customer channels.
However, companies should think twice about whether AI, cloud, or robotic automation, among others, warrants an entirely new role on the leadership team and thus the resources and influence a C-suite executive can exert. Moreover, the question remains whether functional specialists, in the case of one type of methodology, silo leaders in the business and make them unable to operate effectively enterprise-wide.
Breaking the Gender Gap
Diversity within the C-suite remains deplorably low, even with recent improvements in board teams’ gender composition. A recent Harvard study found that high levels of female board participation do not correlate with high levels of female leadership, pointing specifically to a few European countries that have discovered high female board participation but low numbers of female leaders at executive or middle-management levels.
The same study also found that while the number of female CEOs in the Russell 3000 has seen a 70% increase since 2012, the overall number of female CEOs in 2018 comprises only 5% of that same market. Part of the reason women’s representation in executive and middle-management positions is lagging may have to do with the time it takes to institute cultural shifts, as well as the difficulty in changing already engrained norms and biases.
However, the latest California legislation that was passed in 2018 provides a reason for optimism. The governor signed a board gender diversity mandate into law, requiring that public corporations with executive offices in the state have at least 1 woman on their board by the end of 2019 and by the end of 2021, either 2 (if 5 or fewer directors) or 3 (if 6 or more directors).
Over 700 major corporations will have to comply with this rule, 400 of which currently do not have sitting female directors. California’s action is a significant step toward changing the composition of many company boards, and it may cause other states to follow suit with similar laws. We remain hopeful that this will expand below the board and into the C-suite and beyond.
Even though companies are forced to oblige legislation and modify their board recruitment strategies, the expectation of future legislation, as well as a shifting social environment and activist investors, may also persuade companies to take it upon themselves to amend their corporate bylaws around board and leadership team recruitment.
Some companies like Symantec and British Petroleum already have corporate targets for leadership roles, aiming to increase female representation by 20%–30% by 2020.
The Next Generation of Executives
As we enter the third era of the C-suite, Baby Boomers, who have held the top executive positions for the greater part of the last 30 years, are increasingly entering retirement.
With 26% of the American population categorized as Baby Boomers and over 10,000 turning 65 daily from 2011 to 2030, there could be a surge in vacant executive positions and, thus, a shrinking pool of experienced, qualified candidates for those top roles. The next C-suite generation may be younger than we’re used to but also more digital-savvy than the C-suites of the past.
Companies may have to become comfortable with hiring less experienced candidates into C-suite roles or, alternatively, choose to make other alterations to the C-suite, such as reducing the size of the leadership team altogether or “double-hatting” C-suite executives by incorporating multiple jobs in a single role.
Either way, executives must be more collaborative and work across functions to succeed. This can be seen when observing the hugely increased overlaps and cohesion needed to manage and leverage data across the CMO, CIO, CFO, and chief analytics officer functions.
The C-suite is due for continued evolution in the next decade and at an increasingly rapid rate—from the composition of the C-suite to the breadth of responsibilities of each appointment to the digital-savvy nature of the skills required to be successful in all executive roles. With change happening throughout the C-suite, only those capable of adapting quickly and permanently will win.
|Tim Robson’s considerable international experience and deep industry knowledge makes him a much sought after search executive amongst clients looking for global experience and connectivity. He works extensively with Private Equity firms on transformational management team build outs for their portfolio businesses, as well as global and publicly-listed digital, technology, technology services, and professional services companies that are seeking to grow in their markets and beyond. Tim’s clients include some of the Fortune 250, the ‘Big 4’, and leading private equity companies, globally.
Prior to cofounding H.I. Executive Consulting (HIEC), Tim led his own boutique Executive Search firm, where he and his team specialized in providing C-level search and consulting services to clients in strategy, management consulting, IT & Business Outsourcing and Technology Services industries. Tim has a bachelor’s in law. Connect with HIEC on LinkedIn, here.