Arthur Carmazzi – Review on global CEO leadership
By 2020 there will be nearly 7 times more networked devices than there are people in the world.
The digital revolution has given birth to a new generation of consumers who want ever more accessible, portable, flexible and customized products, services and experiences. They expect to move seamlessly – in real time – between the physical and virtual worlds. And they’re prepared to disclose quite a lot about themselves to achieve their desires… but more importantly, these consumers are also our employees and future leaders.
The single most important factor a CEO must look at is the effect of technology on a global scale… this is not limited to markets, products and customer expectations, it affects the very perceptions, beliefs and motivations of a modern employee. If a CEO is to excel in this modern world, we must embrace change and the fact that change is not a one off event. CEOs must nurture an organizational culture of innovation and agility that is connected to the world and their customers constantly shifting options. A culture where trust is fundamental and employees as well as customers can invent, create and feedback in a safe environment where mistakes are part of the greater future development.
To be equipped in the modern world, there are 4 factors a CEO needs to adapt to in order to move organizations to a greater competitive advantage.
Know your audience, know your staff…
According to socialmediatoday.com, only 47.4 % of CEOs participate on social media sites. Are you one of them? If not, consider that most of your employees are, and so are your customers. If you are to understand the emotions that drive decisions, the factors that employees and customers “Like” and the mentality and action patters of related social groups, looking at a graph will not be enough, you need to participate, you need to feel and interact.
socialmediatoday.com also reports 81% of employees believe that CEOs who engage on social media are better equipped to lead companies, and CEOs who participate on social media can build better connections…
82% of consumers are more likely to trust a company whose CEO and leadership team engage on social media.
77% of consumers are more likely to buy from a company whose CEO and leadership team engage on social media
78% of professionals would prefer to work for a company whose leadership in active on social media.
Conclusion #1: CEOs should actively participate in social media to improve strategic decision making
How Young should a modern CEO be?
According to Business Insider there is a strong link between the age of the CEO and the probability of breakthrough innovation. The younger the CEO, the more groundbreaking innovations.
A study at Spencer Stuart identified the average age of the outgoing CEO was 63, a significant increase over the past three years. The average incoming CEO was aged 53, a comfortable middle ground between the average of 54 in 2012 and 52 in 2011. And a PWC study indicates that Retirement was far and away the most frequently cited rationale for a CEO leaving the role, at 70% of all transitions. The remaining successions were divided among a number of explanations, with the CEO voluntarily stepping down being the next most common reason.
So does this mean if you are a seasoned and experienced CEO, you will not have the potential for super innovation and growth? I don’t think so… it all goes back to how young you are in mind and heart… here is a test question:
Do you use more than 40% of the functionality of your mobile phone? Or do you know as much as your kids when using apps and features?
If the answer is yes then you are highly adaptable and see change and continuous learning as a positive influence on your future. If not, you may be letting your experience get in the way of your greater destiny. The ability to let go, start over with totally new direction, to see what is happening now and immediately adapt to anticipate the future… even if you have already made an substantial investment in a different direction. The ability to look at your and your company as a startup with endless possibilities and make fast decisions to move on new opportunities will inevitably lead to groundbreaking discoveries, product developments… this youth factor also contains the ability and allowance of others to take risk, to listen to what is and not be blinded by what USED TO WORK.
Often, older CEOs are too close to their company, they are emotionally connected to its history and tradition and while they may “modernize” the culture and values seldom change. Visionary younger CEOs have the ability to go into a company without that history and look at the resources, the potential and see what the company can become (seeing it as a startup), while some established CEOs may only see what is and how to maintain and grow it… these are two Very different perspectives. Which do you have?
According to the PwC 17th Annual Global CEO Survey, “47% of CEOs are concerned about the speed of technological change as a potential threat to their organization’s growth prospects. Holding CEOs back is the uncertainty about how to convert those ‘a-ha’ moments into systematic innovation. The #2 concern that a newer technology could negate their efforts. Nearly half of CEOs are worried about the speed at which technology is advancing – and getting on the ‘wrong side’ has major consequences: witness the diverging fortunes of the Blu-ray and HD DVD formats. Many companies are also unsure about how to use the data they collect.”
In my opinion, the Risk is in NOT making a decision and not taking action, uncertainty is now a fact of the state of our fast changing society, no action due to being worried about making a mistake, will inevitably lead to larger losses. And if you make a mistake, you will at least have result you can correct. Without action, things remain uncertain, and when the do finally become clear, they are almost obsolete.
Conclusion #2: No matter how old you are… Be young, remember the passion that got you where you are, not the processes. Don’t wait till you have absolute clarity before making decisions, involve everyone, be ready to delete what is not optimal and reinvent your organization and brands, be a little crazy and fun and let the future be bright and full of untapped possibilities.
Global markets are changing:
Close to 60 percent of the Arab world is under the age of 25, the highest percentage globally, according to the World Bank. Asia Pacific is the fastest expanding consumer market, and Africa is growing. Current primary markets are not expected to have much growth. So what does this mean to a CEOs organizational growth strategy?
Where is your talent coming from, and what about labor cost
Source: Forbes, Emerging Culture, Worldwide Success
According to the PwC 17th Annual Global CEO Survey
58% of CEOs are worried about rising labor costs in emerging economies.
64% of CEOs say creating a skilled workforce is a priority for their organization over the next three years.
50% of CEOs plan to increase headcount over the next 12 months but are concerned about finding the right skills.
Talent and the ability to maximize it are now more important factors than ever before. Combine this with the emotional gratifications and expectation of new work forces and we have insights to better talent and leadership decisions for our future.
Expectations of leaders are drastically different from what they used to be. In the past, 10 years ago, work was our social network, we would get much of our emotional gratifications from being with our workmates, nominal praises from the boss, achieving a goal… but now in the age of Facebook, Employees are in control of their emotional gratifications. People now have Power and a Voice through social media, they get instant gratification through communication and can take action immediately through various apps on their mobile phones, we live in an instant society and we expect leaders to excite, inspire and support our success so that we see and feel it quickly.
The success of change depends of the standard of leadership and the standard is directly related to the fulfilment of emotional gratifications of employees in the process of fulfilling organizational objectives. This requires building the right organizational culture. One that
According to the PwC 17th Annual Global CEO Survey
13% Recognize need to change
24% Developing strategy to change
20% Concrete plans to implement change
21% Have a Change program underway or completed
9% CEOs are overhauling their strategies for partnering or strategic alliances
Successful CEOs are nurturing organizational cultures that support innovation and the expectations of NEW workforces. They are maximizing the talent they have to get more productivity and intellectual value.
CNBC reports 44% of CEOs say their organization is focusing on developing an innovation culture which supports growth, as a priority over the next three years.
Conclusion #3: stablish your culture to be “The Best Place to Work”, not because of salary, but because of environment, providing a work/life fit where employees can show their value and be trusted enough to act on creative ideas yielding in greater innovation
Change also yields opportunities
While the increase in labor cost will affect hires, it also means the larger middle classes have more money to spend.
Today, technology is not just hardware or software, it is eco systems. The service hardware, software package that integrate the real world and the virtual world to support a modern lifestyle. It doesn’t matter what type of product or service you have, if you can build a secure and reliable virtual experience around it, you are on the right track. For example, opening your home front door with a virtual key on your mobile phone, friendly interactive robots that teach your children and access the comprehensive knowledge of the internet, a medical checkup and scan through your mobile phone then cross referenced with your online medical data to give you an instant diagnosis, proactive virtual trainers that follow you in your pocket to support imbedded learning of soft skills… these technologies exist and are being developed into larger ecosystems.
According to research by PWC, most successful CEOs are doing three things to ‘industrialize’ innovation, i.e. to make it repeatable, dependable and scalable:
- They’re focusing on breakthrough innovation in all its forms
- Putting disciplined innovation techniques in place
- Collaborating much more actively
Using technology not just to develop new products and services, but also to create new business models, including forging complete solutions by combining related products and services. CEOs are no longer thinking in terms of products and services so much as outcomes, because they recognize that products and services are simply a means to an end. New blends of the physical and virtual offer many other opportunities for the sometimes elusive competitive advantage.
Conclusion #4: Get really creative, watch sci-fi movies to get inspired, bring in the young guys to get wild and do not discount any idea, merge the possible with the impossible and figure out where the existing components to build it already are. Be a pioneer.