Evolution of CEOs (Part 1)
The role and characteristics of the CEO have changed dramatically since the 1990s, where e-commerce was beginning to take off and more leaders ditched the traditional closed-door with a secretary for a more open-door approach. Now, CEOs are not only taking a more open-door approach, but they're also taking a more open-plan approach, being available 24/7 and discussing openly with employees how they can all make the company better. More of these changes are discussed in greater detail below.
THE MODERN CEO
- Much of the change that we're seeing today happened in the 90s when e-commerce began to take off. These CEOs developed different skills, mindsets, and professional certifications than their predecessors, which made their companies ultimately win out against more traditional retail companies. Customer experience is where many CEOs have shifted their attention to, and online retail companies such as Amazon were pioneers with this.
- CEOs are now becoming more diverse in terms of racial, religious, gender, national, and sexual demographics. As more governments and society demands more inclusion of minorities and other groups, the typical face of the older white male CEO is fading and becoming more diverse.
- The modern CEO gets people to think and not just to do their jobs. The modern CEO makes it safe for people to speak up and contribute. Modern CEOs also lead by example, in other words, being the change that they want to see in others.
- Some fundamental characteristics of a good CEO remain the same, such as the characteristics of being visionary, strategic, flexible, optimistic, and purposeful. The CEO has always been the one to want to drive radical change more than the employees. The difference is that these traits are more adapted to modern society by being less strident, more collaborative, more active, and less static.
CHANGE IN ACCOUNTABILITY
- Because of the rise of shareholder activism, modern CEOs have less autonomy to do anything that they want. Boards with increased power and other stakeholders such as shareholders, staff, clients, and the media are holding a microscope to modern CEOs, even though CEOs can choose which stakeholder to be beholden to.
- Social media has put more pressure on CEOs to be more cognizant of their actions.
CHANGE IN HOW THEY VIEW THEIR ROLE
- The modern CEO is skilled at reading social cues, which enables them to navigate their employees better and solve internal issues. Today's CEOs are also more team players instead of operating as a flamboyant one-man-show that 80s and 90s CEOs are known for. These CEOs were extremely optimistic and believed they could turn bad situations around on their own.
- The guarded personal offices with protective secretaries of the 1980s gave way to an open-door approach of leadership in the 90s. In the modern world, CEOs now have an 'open-plan' approach where they aren't just reachable from 9-to-5, but 24/7.
CULTURE AND SOCIAL RESPONSIBILITY
- According to the 2017 Edelman Trust Barometer, the credibility and trust of chief executives have dropped by 12 points to its lowest ever at 37%. Respondents often mention some executives not paying attention to the culture of trust that a modern business needs to have as a large reason for that.
- Companies over the last 20 years have adopted a shift towards corporate social responsibility, hence CEOs and other leaders have to ensure that they influence the culture of ethics, transparency, and honesty from the top down. CEOs now have to provide measurable results in how they are engaging and uplifting the communities that they are in.
INCREASED EMBRACE OF CHANGING LANDSCAPES
- CEOs 20 years ago largely overestimated the role that technology would play in society. When comparing CEO sentiment in 1998 about how technology will shape the competition in their industry and CEO sentiment in 2017 about how technology changed competition in the past 20 years, 59% of CEOs in 1998 say there will be a significant impact while only 33% of CEOs in 2017 say there was significant impact. This may seem that CEOs are less optimistic/pessimistic about the role of technology now than they were 20 years ago.
- CEOs are expected to now embrace and know disruptive technology such as the cloud, big data, automation, and artificial intelligence. In order for CEOs to hold on to their competitive edge for themselves and their companies, they have to adjust their business model to include more cloud and automation. This is why CEOs are now focusing a lot on innovation and how it can influence growth and cost reduction.
- The modern CEO has the capacity to understand and embrace new technology, especially the technology that their companies run internally. They are able to inspire their employees and have agile decision-making skills.
VIEWS OF THE WORLD / BUSINESS
- Due to globalization and the internet, CEOs are looking wider for talent than just in their locale.
- As CEOs start to trend younger, they are starting to ask for more of themselves and their employees and seek to define why they do the things they do. When they see the meaning behind their work, they do more selfless and sacrificial things, such as forgoing bonuses and salary to fund business ventures or certain parts of the business. They want more than just recognition for their work, and they seek more opportunities to learn and better themselves.
- Over the past 20 years, CEOs have witnessed a lot of change and upheavals because of globalization and technology. The dream of globalization was to unite the world, but CEOs have consistently believed that they will always work in a world where they will have to navigate a multitude of beliefs, value systems, laws and liberties, and banking systems.
- In the past, CEOs were more optimistic in the concept of globalization, and they saw many opportunities in countries such as India and China. Now, CEOs mostly say that globalization has not leveled the field as promised and that the changing and slow-moving politics in India and continued restrictions in China make them less favorable now than they were 20 years ago. Now CEOs look to already-developed countries such as the US and countries in Europe for new business ventures.
- Despite their outlook on the world, overall, CEOs are much more optimistic about the world and their businesses than they were 20 years so. In 1998, only 33% of CEOs were confident in their business' 3-year revenue prospects, while in 2017, 51% of CEOs were optimistic about how their companies will perform over 3 years.