The skills that selection committees once looked for may no longer be enough to run tomorrow’s organisations successfully, as research by Mullwood Partnership¹ has made clear.
As the external business environment changes, so too must the role and priorities of the CEO. In order to succeed, organisations need to re-think their idea of the ‘typical’ CEO, and look beyond the usual suspects for future leaders.
Globalisation has brought increasingly diverse teams, a dispersed workforce, 24/7 working, and more widespread competition along with it.
Technological developments have introduced a range of new workplace-related words to us – digital natives, crowdsourcing, consumerisation and virtual offices being just a few examples.
The upsides have been plentiful – new business models have emerged and barriers to entry are lower than ever before – but a downside is added complexity.
Meanwhile, economic volatility has been the backdrop against which most organisations have had to work over the past five years.
All of these have combined to change the way we work – and the way we run organisations.
The role of chief executive has evolved far beyond its clubby roots. Arguably, it has changed more in the past five years than in the previous decade.
Expectations of today’s leaders are higher – and their exposure to public scrutiny wider – than at any other time in history.
They are judged not simply on performance measures, but also on personal propriety, and their ability to inspire people. Tenure is short, and competition fierce.
It is against this background that Mullwood Partnership began researching the career path and the role of the CEO.
How have they changed, and what are today’s leadership challenges?
Does the traditional route to the role still offer enough breadth and depth to meet these challenges, or does the selection criteria need to be broadened?
The research also sought to address a specific question – why do so few HR professionals progress to CEO roles?
The findings paint a picture of a role in transition.
A background in finance, operations or marketing is still the most prevalent route to the role (50% of respondents), with only 5% coming from HR.
Functional background is becoming less important to selection than specific experience, however.
The pre-requisites for today’s CEOs appear to be proven capability as an MD, followed by sector-specific experience and a multi-functional background.
‘Intellectual horsepower' is essential, with a master’s or MBA degree increasingly expected for CEOs wanting to compete for roles globally.
Changes in the external environment have significantly altered the way a CEO allocates his or her time. External issues make greater demands on the CEO’s time, and changes to the business environment are re-shaping what – and how – senior leaders operate.
The result is a shift in priorities. With external focus the greatest challenge. People leadership, and the ability to build a strong internal team, has become a priority.
In fact, people leadership was cited as the most important capability by the group – which contained chairs, CEOs and nomination committee members – with some now seeing their role as ‘chief talent officer'.
This, say respondents, is the differentiating factor for successful senior leaders. It encompasses team building, delegation, insight and the ability to inspire and communicate long-term vision – while also having the drive and strategic abilities considered standard within the role.
The findings of this report demonstrate clearly a shift in the CEO’s role and challenges.
Anyone with aspirations to become CEO should include them in their career planning and leadership development work. Selection committees should also include these in their specifications.
The full research report can be downloaded here.
1. The research was conducted by Jo-Sellwood Taylor and Sharon Mullen, Co-Founding Directors of Mullwood Partnership in collaboration with Dr Sukanya Sen Gupta, Associate Professor at Warwick Business School, Andrea Adams Managing Director, Triumpha and supported by Criticaleye (Network of Leaders).