The corporate parking lot used to be the physical place separating the company from the outside world. Once on the premises, you were at work - when you left, you were off the clock. But that is no longer the case. Especially not for the CEO.
The numbers don’t add up
Consider the difference in how CEOs measure success. 20 years ago, CEOs needed technical expertise, strong administrative skills, and a proven track record of financial management. The annual report was the main metric of success. It defined the CEO.
Today, the annual financial report still stands. But it does not stand alone. Success has become a multifaceted prism, which provides a number of new perspectives such as ethics and communication as well as environmental, social and governmental impact. This is no less true for many companies in the Nordics, who are embedding ESG in their strategy, and at the same time engaging actively with stakeholders on agendas such as Pride Week and Russian Sanctions. Just to name a few.
So what does this mean for today’s leadership?
For one, a CEO must be able to navigate a multitude of challenges. The imperative lies in understanding the interconnected world and ensuring that the executive leadership can act efficiently and cohesively with the realisation that uncertainty and vulnerability have become integral parts of doing business today.
The data tells a clear story. In a study published in Harvard Business Review from 2022, researchers found a 30% increase in the number of job descriptions for CEO positions mentioning social skills, and a nearly 40% decrease in mentions of operational skills since 2000. CEOs must be sensitive to interpersonal dynamics and aware of how their leadership style affects the people surrounding them. Traditional skills such as financial and operational management remain necessary - but they are no longer sufficient in order to truly succeed.
Cultivating a shared vision
The evolving role of the CEO necessitates a shift from an emphasis on individual accolades towards a collective mindset. Recognizing and leveraging the diverse skills of each executive team member has become an essential task for maximising overall team performance and ultimately the entire company’s performance.
I have seen this more and more in recent years. The majority of CEOs who excel are those who strategically allocate substantial resources towards creating a true executive leadership team and cultivating a shared vision. This shared vision acts as an invisible force that enables better strategy development as well as efficient execution - both of which are pivotal in an interconnected and unpredictable world.
I believe that companies with a shared vision at the top are better able to turn uncertainty into opportunities. It does not matter whether the cause of uncertainty is technological innovation, geopolitical tension, hikes in interest rates or new cultural norms.
But take note. The new breed of actively communicating and vision-sharing CEOs is not steeped in feelings and consensus. On the contrary, top leaders must strike a delicate balance between authenticity and assertiveness. While prioritising a culture of trust and openness, leaders must also possess the resilience to make tough decisions with far-reaching implications for the organisation's long-term success. A shared vision needs impeccable execution.
Context is key
The effectiveness of a CEO does not only depend on experience, capabilities, or aptitude. There is another element at play, which on the face of it lies outside the leadership control.
Context.
For CEOs, effectiveness is tied closely to the circumstances surrounding the specific company and its unique culture at the specific point in time. Today’s dynamic and turbulent business conditions require skills such as authenticity, self-awareness, and a collective mindset. At the same time, leaders must adapt to diverse contexts – and do this frequently. Even for the fastest learners, there will always be nuances and changing perspectives that will pose new challenges.
The idea around context is important. It explains why the notion of a perfect CEO is conditional. But all is not lost. As long as executives are mindful of adjusting to changing environments, the prospect of achieving successful and sustainable outcomes prevails. Both today and in the future.
Forfatter spotlight
Michael Vad
Michael comes with more than 20 years of experience as a board Advisory Partner and has specialised in board evaluation and board advisory having worked with both Danish and global companies, also on individual competence mapping and board culture assessments. Spørg mig om: Bestyrelses- og topledelsesrådgivning Michael Vad har i to årtier arbejdet med international bestyrelses- og topledelsesrådgivning for børsnoterede, familie- og kapitalfondsejede selskaber. Hos Deloitte leder Michael vores nordiske Board & Executive advisory-forretning med fokus på bestyrelsesrådgivning, CEO succession og talent management.