Industries worldwide unlike ever before are experiencing systemic failure as a result of the digital disruption, coupled with an economy stuck in reverse. Therefore, when we look at successful CEOs and what distinguishes them from the rest, it is good to look beyond the skills that they supposedly have in common. This is where we really start to see the in born talent of outstanding CEOs.
Often when you look at the CEOs’ ‘must have list’ – their education, their technical competencies, even their experience and prior career path – they often look very much the same. And, for that matter, the basic responsibilities of their role template are also pretty much the same.
I’m sure all of us would agree that the CEO functions as an enterprise’s mission-maker, goal-setter and team-builder. To external audiences like investors or analysts, the CEO is the driver of the enterprise’s strategy, chief amplifier of its successes and the fall guy if it falls short.
To the board, the CEO is the firm’s main leverage point and pathway to and from its management. And, yes, to both internal and external groupings, the CEO represents the face of the enterprise, serving as a symbol, a model, a brand, tasked for shaping the course, staying on course and getting the organisation ready to change the course as the landscape changes.
People like Steve Jobs and Jack Ma, who have excelled and created something unique, have demonstrated beyond the skills that CEOs supposedly have in common.
Sri Lankan experience
The CEOs in Sri Lanka are selected based on their branch of learning and because they know how to meet customer demands, by building disciplined operational skills through understanding systems and by ensuring financial rigor through implementing financial controls.
Then some organisations that have the leadership bench strength have the capacity to respond to changing business conditions, execute strategy, increase investor confidence and anticipate and deliver those customer requirements, most often get their CEO from within.
Another possible criterion for selection, which can be harmful, is that the CEO candidate is assessed not on the basis of what the shareholders have identified as what the CEO should do to take the company to the next level but based on his past performance at the level he was and he would generally in such cases rise to the height of his incompetence.
The pathway for most CEOs has either been from marketing or finance. CEOs today face unheralded pressures, as their organisations are met with enormous changes in business conditions, more demanding stakeholder expectations and complexity of regulatory compliance demands.
In addition, technological innovation continues to get shorter and shorter. Social and cultural changes are compounded with widespread access to information and globalization. Investors, customers, regulators and outside communities all put enormous demands on company performance.
Therefore, a CEO today must be a person who is not only educated and skilled in finance and marketing but also understands the soft challenges facing a business and how to tackle these challenges, including how he would handle external pressures and competition as well as the internal conflicts, which are inevitable when pushing for change.
Talented employees have increased choices about where they work and how hard they work. CEOs who cannot adapt and create adaptive organisations will fail. Today, marketing, commercial and financial acumen may be the key skills for CEOs; however, the increased business pressures require CEOs to possess an additional set of skills: ones that will allow them to build robust and resilient organisations.
Creating the right organisation is less about structure, which focuses on roles, responsibilities and rules and more about capabilities, which focuses on talent, leadership and culture. The impact of social media exposes the inner workings of companies, so that an organisation no longer has total control over their employer brand.
Putting together an organisation that pin points who reports to whom is now becoming less and less important than creating a corporate identity that communicates the expectation of the firm’s brand to customers and the expectations of the firm’s culture to employees. There is also now a need for greater transparency and accountability.
Employees need more and more information of what is going on in the company as well as in the world outside, especially what would impact them. The social media within the organisation is now become a means for information sharing as well as for education and knowledge sharing.
Therefore, unlike before, a CEO requires a balance of technical, social and people skills. For all leadership roles there has been a gradual shift in requirements towards business acumen and ‘softer’ leadership skills. Technical skills in finance and marketing are merely a starting point and no longer sufficient to move a high potential to a top job.
Successful CEOs therefore tend to have leadership styles that motivate employees, develop future leaders and create appropriate cultures. Leaders are increasingly observed and evaluated on how they treat people, nurture future leaders and create the right work environment. Managing talent, leadership and culture enables sustainable customer, operation and financial results.
Therefore, while CEOs need to be technically competent, they need to have the ability to make employees feel better about themselves, which results in a greater commitment to doing the right work and also to create a work environment where the employees feel they have the opportunity to grow personally, professionally and demonstrate how they provide value to the company.
Skills and competence
Therefore, for CEOs to be effective in their roles in the future, I believe that in addition to having technical/functional skills (core plus 1 more) and loads of good judgement and self-confidence, they would need to have the competence in the following five key areas.
It is clear that employees now look for leadership in terms of seeing someone who sets an example for them in terms of commitment to strategy, commitment in implementing the strategy, ability to explain to them the rationale and how it would be mutually beneficial for the individual and the company.
Firstly, they would need to exhibit composure when it comes to high-pressure situations and are able to remain emotionally steady. As leaders they need to remain calm and not get easily frustrated and put off and have enough tenacity to face difficult situations. To do this, they need to habitually look for ways to develop and grow all those around them.
Secondly, they should be change champions who can readily initiate and institutionalize change, drive innovation, understand rising customer expectations and look for new business models and look to green energy.
Third, they have personal confidence to face and make bold decisions and mange the boundaries between work and life. They recognize the risks inherent in their role and are willing to make decisions even without complete data. In addition, being able to bring together teams and accept a diversity of views and styles to make decisions collaboratively.
As far as risk is concerned a leader needs to be able to anticipate correctly what the risks are and how he will counter them when they arise with several alternative scenarios of response.
Fourthly, they are able to read their team and are able to identify their people’s strengths and weaknesses and tweak those weaknesses to make it a strength. This allows them to place people in positions to get the job done in the best possible way. They need to be excellent talent scouts who recognize the future potential of their people and plan to get the best out of their people, by creating an environment where their people can do their best work.
They also need to have the passion to devote enough time for interaction with their staff. Most employees like to have an opportunity to brainstorm with their top management, provided they are willing to spend time with them.
Fifth, must have the ability to understand the power of technology to supply them with the information that allows for rapid change and to create real competitive advantage.
Needless to say, clearly all these skills and competencies will be the key for any CEO looking to stand up to the new reality of successfully running complex business organisations and to demonstrate authentic leadership and finally to create a transparent and conducive work environment to make that key difference in the market place.
(Dinesh Weerakkody is a thought leader)