Resilience is increasingly about the ability to constantly evolve and adapt to fast-paced change. This requires CEOs who react with agility to changing customer needs and also focus effort where it will have the most impact.
This need is given added urgency because many CEOs feel they have less time to make an impact, than previous generations of executives. We asked CEOs whether they agreed or not that tenure today for chief executives averages out at around 5 years. Worldwide, close to three-quarters (74 percent) felt that it did, and that this was shorter than when they first began their careers. In the Republic of Ireland the figure was similar at 74 percent and somewhat higher in Northern Ireland at 84 percent. This view is aligned with recent research, which shows for example that the median tenure for CEOs at large-cap, S&P 500 companies was 5 years at the end of 2017 and had declined since 2013. (Equilar research, featured in “CEO Tenure Rates,” Harvard Law School 2018)
Over two-thirds of global CEOs (67 percent) said that this 5-year average tenure means there is more urgency to act with agility - a figure which rises in both the Republic of Ireland (78 percent) and Northern Ireland (76 percent).
To drive innovation and change, CEOs need to be prepared to take their organisations in entirely new directions. This will require a leadership mindset where CEOs are prepared to question long-held assumptions and beliefs - challenging the status quo if this is holding back progress.
This research suggests three qualities that will be critical for generating new ideas and driving radical change: maintaining close customer connections, balancing data-driven insight with intuition and experience to anticipate customers’ needs, and building emotional resilience.
Firstly, leaders need to be closely connected to their customers, maintaining a dialogue and understanding their changing values and needs. For example, CEOs recognise that customers want to know where leaders stand on societal issues. Two thirds (66 percent) of those in the Republic said that they feel it is their personal responsibility to ensure that the organisation’s environmental, social and governance (ESG) policies reflect the values of their customers, a figure which rises to 72 percent in Northern Ireland (71 percent worldwide). Meanwhile, over half (55 percent) of global CEOs said their organisations must look beyond purely financial growth if they are to achieve long-term, sustainable success, a figure which drops to just over a third (36 percent) in both the Republic and Northern Ireland.
Secondly, they need to balance data-driven insight into customer needs and requirements with their own expertise and intuition. We found for example that CEOs in both the Republic of Ireland (66 percent) and Northern Ireland (72 percent) and in common with their global counterparts at 71 percent say they have disregarded data-driven insights because they were contrary to their own experience or intuition.
To get value out of increasingly sophisticated analytics, CEOs need to ensure they can trust the findings in front of them, particularly if that insight has not been produced by a human, but by an algorithm. Building a framework of checks and balances is crucial. That involves making sure algorithms are not relying on biased information and that diligent quality control measures are in place. In this way CEOs can be comfortable basing actions and decisions on data insights even if they do not understand how an algorithm works, because they trust the quality of those models.
Finally, they need to create an environment where the willingness to change is recognised as a strength, not a weakness. Many CEOs have built the emotional resilience to recover from a failure. Two thirds of CEOs in the Republic (66 percent) said that they had a significant misstep early in their career, such as launching a venture that ultimately proved unsuccessful, but that they were able to learn from their experiences - a perspective shared by over half (56 percent) of their Northern Ireland peers. Such resilience was reported by an even higher figure internationally at 74 percent.
CEOs face an increasingly uncertain and volatile business environment. To manage highly complex, big-picture risks, they need to build a complete and nuanced picture of how risks, from climate change to geopolitics, are inter-connected and ensure their leadership teams are engaged in designing a response. With a rising concern in many markets about a potential slowdown in the global economy, chief executives need to ensure their early warning systems are in place and have worked through different scenarios so that they are on the front-foot should a slowdown occur. And with business models that have lasted for decades under increasing threat from digital disruption, CEOs need to disrupt their own business models, challenging the long-held beliefs and orthodoxies that have governed their companies and sectors for many years.
CEOs need to build resilience within their organisations by driving change; this will involve the careful management of tensions within the business. While encouraging innovation through acceptance of productive failure, they must also foster a disciplined approach that sacrifices nothing in terms of quality. This will also entail examining the capabilities of their leadership teams and addressing weaknesses.
They must lead a fundamental transformation of their operating models, building an agile, customer-focused and connected enterprise by combining advanced technologies with operating redesign.
CEOs must also drive an organisation-wide digital reinvention, building cyber resilience and masterminding a fundamental reboot of technology and an upskilling of the workforce. CEOs need to nurture a deep and nuanced understanding of the cyber security risks facing the organisation, and put in place the communications and education programs necessary to ensure that security best practice is part of the DNA of their businesses.
To drive this ambitious remodeling of both systems and personnel, CEOs must give their learning and development teams the strategic backing and resources they need and put in place effective governance so that resources and investment are focused on areas where they will have greatest impact. Finally, they need to lead their organisation’s AI strategies in terms of how, where and when these new technologies can be deployed to optimal effect.
The modern CEO needs to accept and embrace the fact that they have more to do and less time to do it in. They need to become internal disruptors of their own businesses, challenging management dogma and entrenched practices. They will need to forge stronger links with their customers, accepting the need to anticipate their requirements through insights gleaned from data-driven analysis. They must also create an environment where new ideas can be tested without prejudice and in which willingness to change is recognised as a strength, not a weakness.