I was discussing at a Non-Executive Directors meeting recently ‘the role of C-suite’ and whether C-suite are integrated enough to the business, to really drive change, transformation, effect the direction of growth and shareholders, or whether C-suite was too far removed from the business to really matter.
Harvard says that ‘a role of management in business services is to make average people exceptional…but you must have the information to know what exceptional looks like in your customer eyes.
In 2014, I attended a conference by one of the UK’s top business schools and wrote a blog, ‘What is Excellence in Business‘. There is a constant discussion on leadership, its value and where leadership fail to deliver and execute strategy and business development and growth.
The C-suite is considered the most important and influential group of individuals at a company. Being a member of this group comes with high-stakes decision making, a more demanding workload and high compensation. As “chief” titles proliferate, however, job-title inflation may decrease the prestige associated with being a member of the C-suite, but do the C-suite actually cause effect in an organisation that creates value to shareholders, customers and employees.
The next-generation C-suite must transcend functional boundaries to secure enhanced alignment and coherence, without defaulting back to the command-and-control arrangements of a bygone era.
So what is the answer?
In an increasingly volatile and uncertain world, companies are likely to rely more, not less, on the judgment of managers in making critical decisions and choices. A fundamental and unique role for most C-suites is the application of collective knowledge and experience in exercising judgment on the most critical issues—and enabling others in the enterprise to do likewise.
From the worlds of social psychology, behavioral economics, and most recently, neuro-science, a great deal has been learned about the reality of how humans make decisions, individually and in teams. It is typically a far less rational process than assumed. The power of heuristics and biases, the dangers of certitude, the risk of reliance on experts—these and other factors are well understood. But with the convergence of disciplines, and an increasing focus on techniques for better team-based and individual decision making, this is a field starting to move from the world of theory into the world of practice.
Then, there are the opportunities afforded by exponentially increasing access to hard data. The hype around big data reflects real promise in the form of greater transparency and insight, delivered through executive dashboards and powerful and intuitive visualization technologies. Judgment will never be replaced by data—but it will be increasingly supported. Access to sound information in close to real time can enable the C-suite to agree on necessary course correction, focusing on facts from the field rather than the specific (and sometimes competing) interests of different functions and executives.
But data are sometimes tortured to “reveal” whatever the interrogator wishes to learn: They do not always overcome inevitable cognitive biases. Two other opportunities for enhancing judgment come from the “softer” domain of social science. Few executive teams today are as diverse in their composition as their talent base and the markets they serve. But that is changing, with global experience and background becoming more highly valued, and the evidence mounting of the benefits of designing leadership systems to accommodate greater diversity.
Difference also brings challenges—of conflict, misunderstanding, and misalignment. Here, a great deal has been learned, and codified, about the skills that underpin productive dialogue. These are learnable skills that can transform the effectiveness and outcomes of senior executive communication and interaction—and some leading firms are already investing heavily in building such leadership capabilities.
There needs to be an ongoing evolution of the C-suite and the critical integrative role it must perform are likely to have far-reaching implications across many firms. A recent Harvard Business Review article reports that some CEOs are already “double hatting” key executives, giving them significant responsibilities beyond their official jobs—for example, a functional chief leading an integrated operational initiative.16 Some specific “chief” roles are likely to evolve and grow. Relationships between leadership teams and boards will perhaps realign. Promotion paths to top leadership will likely take on some new contours. It is even possible that belonging to the “top team” will cease to be the permanent destination (which results in potential calcification of the team), but become a time-bound tour of duty for executives prior to returning to their own specialist areas.
It will be up to top leadership, too, to address the perennial challenge of balancing different time horizons. Top executives carry unique responsibility for both short-term performance and long-term stewardship of the firm. Intense pressure from capital markets for immediate results, coupled with a shortening average tenure for some senior executives (especially CEOs), have underscored the former in many Western corporations. Two factors are likely to enforce a more balanced perspective here. First, axiomatically, discontinuity demands anticipation—to avoid catastrophic and irreversible missteps. Second, in most industries, the competitive set now includes powerful new players who might secure advantage from a traditionally stronger orientation toward longer-term horizons, enabled by the more patient capital support of their state- and family-owned legacies.
Finally, one of the most profound changes in the years ahead might well come in the area of executive incentives and metrics designed explicitly to encourage more aligned and collaborative leadership, and to help ensure a balanced focus on short- and long-term imperatives.
So what is the conclusion:
If a company sticks with the C-suite model it probably has in place today, it might find it hard to remain competitive. The next wave of globalisation is bringing unfamiliar opportunities and challenges, along with increased diversity and complexity. These dynamics are intertwined with rapid technological change and fast-evolving business models, industry structures, and organizational forms. Plotting the course forward will test the limitations of the typical team of functionally oriented executives.
A key requirement for the next-generation C-suite will be the ability to secure alignment and coherence across multiple dimensions of essential change, without defaulting back to the command-and-control arrangements of a bygone era. Achieving deeper integration and coherence is unlikely to be achieved by C-suite 2.0 fragmentation—but neither will it be accomplished by a return to the smaller, tightly centralised C-suite 1.0 model. Boards and CEOs might make this a subject of discussion and debate, and come up with their own definition of their future C-suite 3.0.
As John Quincy Adams once said:
“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”