Research Paper Exclusive Content
The Three Pivots
There are hundreds of articles about CEOs and what it takes to successfully lead. We already know that the role is challenging, complex, and dynamic. But with all the geopolitical, social, and public health headwinds of the past couple of years, the world of work is morphing before our very eyes. Some have moved away from the term “The Great Resignation” to call it “The Great Rethink.”
That’s why we undertook a new research study on the role of the CEO, looking at how CEOs have navigated the last couple of years and what success looks like now and going forward. After all, for all the dramatic change in the corporate world, it’s only fitting to see how it’s impacted the singular role of the CEO.
So what did we learn? That expectations on the CEO have both increased and broadened. And yet one thing hasn’t changed. The maximum number of hours in a week that any CEO has to offer: it’s still just 168.
Given that most CEOs can’t take on more, the leaders we interviewed described several key shifts they’re making to adapt to today’s needs, meaning doing less of certain things to do more of what’s important now. In this report, we’ll describe a few themes from our interviews, and then outline the three “pivots” we heard CEOs describe as critical to being effective now and in the future.
Executive Summary
The people aspect of the CEO role has taken on primary importance.
CEOs now need to focus heavily on the talent of the organization: recruiting, developing, retaining, and succession planning for top talent. While this has always been on the CEO’s radar screen, many CEOs said this is now their personal top priority.
“The job is so much more about leading people now versus a focus on the business strategy.”
Building a cohesive executive team is a universal challenge.
There was one theme that came up in every single interview: the need for today’s CEO to drive cross-functional collaboration among their executive team and their functions. Without it, CEOs describe organizations that cannot move with agility or speed, weighted down by mistrust, personal agendas, and silo mentalities. In addition, CEOs have felt the unique burden of being the only leaders with true enterprise perspective and accountability.
“I have to ensure others are playing with each other. I need to manage the interfaces, because it feels like no one else has the whole business perspective.”
It’s all about communication—in every direction.
With remote and hybrid work, it’s easy for information flow to become limited. CEOs have had to supercharge their communication out, but have also had to amplify their listening in order to effectively sense what’s happening with their organizations and markets. A number of CEOs noted how virtual work typically drives more formal communications, so intention is needed to create the informal channels that happen more naturally in an in-person work setting.
“In a remote work setting, there is no osmosis.”
The boundaries of the CEO role have expanded.
As expectations for the role of the corporation grow, so too does the role of the CEO. Both employees and investors now expect CEOs to take broader stands—not only in corporate decisions, but also societal issues where they can have an influence. Within the organization, CEOs now feel a direct responsibility for creating more diverse and inclusive workforces, and yet in many cases worry they don’t have the knowledge of how to make substantial progress. In addition, CEOs are increasingly focused on the ecosystem they’re in: not just with customers, but potential partners, alliances, and communities.
“ESG and social responsibility are accelerated. Shareholder and employee communities and boards are demanding it.”
The last two years have tested CEOs in uncharted ways.
Between looking for creative ways to interact with their teams, navigating exceptionally volatile conditions, and making decisions on a dime, CEOs have felt the burden of keeping organizations steady in stormy conditions. At a time when leadership has been most important, the tools with which to lead have become constrained or converted.
“I’ve managed my business largely through a camera.”
Key THEMES
We found striking similarities between the interviews conducted. The most clear themes were:
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Pivot #1: From building functional excellence to creating executive team alchemy
The Three Pivots
Given these dynamics, we’ve seen three key adjustments—or “pivots”—needed for many of today’s CEOs in order to thrive in this new world of work. They are:
Whereas yesterday’s CEOs focused heavily on creating strong functional teams, today’s CEOs drive a more holistic approach. Much of this is due to the reality that most CEOs simply can’t succeed in their roles unless they have a strong and united executive team to take direct responsibility for aspects of the business that the CEO doesn’t have time to drive.
The CEOs we interviewed talked often about how their mission was to create something greater than the sum of its parts—to drive collaboration across their teams in a radically expanded way. As a result, many of these CEOs have recently spent extensive time and effort developing their executive teams as high-performing units by creating an interdependent set of enterprise priorities for everyone, defining decision-making rights in frequently matrixed organizations, and introducing new team “mechanics” to facilitate communication and collaboration.
One recently-hired energy company CEO held an initial executive team offsite with the sole purpose of team members getting to know each other better. An executive on her team later admitted, “Coming into this meeting, I thought this was a huge waste of time. But I now see a year later that we’re far better at decision making because of that meeting. We wouldn’t be where we are today if we hadn’t built a foundation in that first meeting.”
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Pivot #2: From defining strategy to inspiring people
While CEOs still need to ensure the organization has an effective strategy, more urgently required are the things they can do to engage the right people in the business, starting with the executive team to enable Pivot #1. Communicating the company purpose, hiring and keeping great leaders, celebrating wins in difficult times, and building confidence in the enterprise are all critically important priorities for today’s CEO.
CEOs are more centrally involved than ever in ensuring their organizations attract, develop, retain, and inspire their employees and their key “stakeholders.” CEOs have also dramatically increased the frequency and breadth of how they communicate and interact with their people. One CEO explained, “I’ve needed to make adjustments in style: I need to be more open, more available, and I need to engage in a more personal way.” Another tech CEO we interviewed now creates an informal and unscripted video each Friday to communicate to his leaders what’s happening in the business. In order to create more effective two-way communication, another CEO has created an ad hoc strategy team made up of 25 leaders from different functions and levels of the organization to make better decisions on priority issues.
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Pivot #3: From driving financial results to creating societal impact
Of course, driving results is still imperative, but good executive teams can take care of most of that. Today’s CEO is expected to focus on impact and how the corporation can provide benefit to investors and employees, as well as to society overall. One CEO we interviewed said, “The CEO is increasingly becoming the leader of a social enterprise.” Another said, “Employees have so many choices now—they want more than a job and a paycheck. They want to work where their organization is making a difference in the world.”
Having a point of view and taking action on major societal issues appears to be less and less optional for corporate CEOs: it’s now an expectation for success. For example, look no further than the recent geopolitical conflicts and how employees and customers are watching every move companies make in their responses.
Effective CEOs find creative ways to highlight the impact their companies have beyond a monetary level. One CEO of a fast-growing biotech company recently hosted a company-wide meeting in which patients were featured telling stories about how the company’s drugs had improved their lives.
Conclusion
The past two years have created both strain and opportunity for CEOs, and those who’ve retooled how they lead have adapted well to a new landscape. This shift has implications for other C-suite executives at large organizations, as they have many of the same challenges, opportunities, and adjustments experienced by the CEO.
The “Great Rethink” requires key pivots for those in the CEO role to navigate these rapidly changing conditions. The best CEOs of today and tomorrow are growing strong executive teams, focusing on talent as a top priority, and finding ways to broaden the organization’s impact—leaving some more traditional responsibilities behind (or to others) in order to thrive.
By Molly Rosen and Jeff Rosenthal, Co-CEOs of ProjectNext Leadership
Molly Rosen has worked with leaders in tech, entertainment and biotech for over 20 years as an executive coach, facilitator and consultant. Her clients have included Pixar, Airbnb, Samsung, Google Ventures and Seattle Genetics. She contributed to the significant growth of firms BlessingWhite and NinthHouse before starting her own consulting business. Molly is a specialist in women’s leadership and was Managing Editor of Knowing Pains: Women on Love, Sex and Work in Our 40s, a popular anthology featured on the TODAY Show.
Jeff Rosenthal brings a wealth of experience in helping organizations prepare senior leaders for high impact roles. He most recently built and led the Executive Readiness practice at Deloitte Consulting, focused on both creating robust succession processes and developing senior leaders. He was formerly CEO of the UC Berkeley Center for Executive Education, and before that led the Tech sector globally for Korn Ferry’s Leadership & Talent Consulting business. He also consulted for firms BlessingWhite and Forum Corporation. Jeff also brings executive search experience to his role, having served at Russell Reynolds as the Western US lead for the Human Resources practice.