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The CEO Report v2 PDF
The CEO Report v2 PDF
CEO
Report
Embracing the
Paradoxes of Leadership
and the Power of Doubt
Table of contents
3. Executive summary
4. Leading at the intersection: The CEOs changing role
6. Change: Understanding speed, scope, and significanceS3
10. Ripple intelligence: Building a CEO early-warning system
14. The power of doubt: Finding comfort in discomfort
18. Authenticity and adaptability: Bridging the master paradox
22. Finding balance: Choosing between right and right
26. Todays CEO: Embracing continual growth and renewal
30 Whats next: Ensuring success beyond succession
32. The CEO agenda: Global trends and accountabilities
34. Acknowledgments
35. Method/About our sample
Executive summary
>75%
14%
9%
CEO
CEO
ORGANIZATION
ORGANIZATION
Hero or human?
Meanwhile, business leaders face new interpersonal
challenges. Notably, most of the CEOs we interviewed
spoke of the growing importance of being perceived as
more approachable, engaged, and caringin other words,
more human. Several describe emotion as playing a key
role in stakeholder engagement, while another refers to
the job as Chief Emotional Officer, adding: The best
leaders are human beings first and foremost.
The need to create trust across multiple groups affects
how CEOs communicate, listen, make decisions, and
manage their time. Providing detailed reports to analysts,
communicating high-level concepts to the press, and being
authentic with employees is spurring CEOs to seek new ways
to establish organizational values and culture, build teams,
and align their companies around a direction and purpose.
Nonetheless, CEOs are still expected to be heroic
leaders who own the chair, a fact of life that creates
tension as companies recognize the benefits of involving
more stakeholders in strategy, decision making, and
execution. One CEO describes how his employees,
customers, and board all expect him to be more human
when seeking their input on decisions, while at the same
time being confident and authoritative when it comes time
to make the call. He dubs his new approach to decision
making collaborative command.
KEY INSIGHTS
Globalization, digital connectivity, and
a proliferation of interested parties
have dramatically expanded the stakeholders
who influence and voice a point of view on
company performance.
In a world of connectivity and scrutiny, trust
comes at a premium, requiring CEOs to reinvent
how they communicate, lead, and set strategy.
Today CEOs are expected to be human
stewards for stakeholders, no longer heroic
agents of shareholders.
Past experience and traditional approaches
to strategy, control, and communication are
no longer reliable guides; CEOs today must
find new ways to establish organizational
values and culture, build teams, and align
their companies. They must lead at the
intersection of outside and inside, where
company ambition and stakeholder influence
blur, contradict, and sometimes compete.
Speed demons
CEOs routinely speak of the pressure todays pace
of change imposes on them, citing factors such
as disruptive new competitors and new market
94%
emphasized its
pace or speed
REVOLUTIONARY
EVOLUTIONARY
GLOBAL
FINANCIAL
CRISIS
SYSTEMIC
SCOPE
EE
SP
SIGNIFICANCE
CONTAINED
US SUBPRIME
TECHNICAL
FOUNDATIONAL
KEY INSIGHTS
Preoccupation with the pace of change
makes everything feel urgent and creates
a risk that CEOs will focus equally on
changes that dont demand equal focus.
Understanding the potential scope and
significance of change, in addition to speed,
allows CEOs to prioritize where and on what
they spend their time. How far-reaching is it
and how deeply will it shake the business?
This S3 approach to understanding
change helps CEOs prioritize, delegate,
and make time to focus where their attention
is most needed.
Constant re-evaluation of each dimension
helps CEOs reserve energy for significant,
large-scale challenges.
Ripple intelligence:
Building a CEO earlywarning system
In an ambiguous, rapidly changing environment, if you
havent got your antennae out youre going to struggle to
see opportunities and threats which may blindside you.
LATAM
MENA
North America
Lack of values
Societal tensions
in Middle East &
North Africa
Cyber threats
APAC
Europe
Growing Asian
middle class
Cyber threats
Sub-Saharan
Africa
Unemployment
Beyond context
Think of the effect of a rock dropped in a pond. Now
imagine the effect of multiple rocks (of different sizes)
thrown into those same waters. Add the effects of wind and
weather. In business terms, we can imagine the resulting
turbulence as ripples of context (a new competitors
entry, for instance, or a change in a customers buying
patterns), and the ability to understand how they will
change, intersect, and interact with one another as ripple
intelligence. In a world where the speed and scope of
change complicate judgments of significance for CEOs,
ripple intelligence represents an early-warning system for
leaders able to think systemically. One CEO puts it like
this: No one imagined a world in which the Middle East
would be in flames No one really [imagined] Russian
tanks in Eastern Ukraine, Crimea, whats going on in the
South China Sea plus the slowest, shallowest [economic]
recovery weve ever had. He went on to wonder: What if
this is just the new normal?
In this new normal, companies face big forces,
including, as another CEO noted, the rise of 2.2 billion new
middle-class consumers, technology going three times
faster than management, geopolitics. He continued by
35,000 FEET
11
KEY INSIGHTS
Ripple intelligence is the ability to anticipate
and judge how, when, and why contexts may
interact to fundamentally disrupt the business.
To discern and connect disparate events,
discover patterns, and anticipate distant
threats or opportunities, CEOs need to rise
above the clutter.
Evaluate emerging trendsare they gamechanging, transient, significant (but not for
you), or slow-burn?
New decisions create new ripples. Think
about how they will interact with the existing
ones to create more opportunities or threats.
13
T
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ZO
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U
FEARLESSNESS
G
AN
ANXIETY
A [certain] level of
professional doubt should be the
quality of any good leader.
71%
10%
19%
Yes
No, but
No
15
Slowing down
Critically, though, processing doubt takes time.
Judiciously assessing the speed, scope, and significance
of change is paramount so that CEOs can identify the
decisions to delegate, determine the decisions to make,
and then dedicate sufficient time for productive doubt
KEY INSIGHTS
Doubt is part of the humanization of the
CEO, a positive, generative state that should
be embraced and utilized, not feared.
Doubt is an issue of both knowing and
feeling. Ignoring the emotional dimension
artificially limits the range of solutions
available.
Transforming doubt into a decision tool
helps CEOs find comfort in the discomfort
of making decisions when the outcome is
uncertain.
CEOs can lighten the burden of selfchallenge by enlisting management
teams, boards, or chairpersons to
outsource doubt.
Understanding the reasons for their
discomfort allows CEOs to solicit
additional information or perspectives,
thereby making more comfortable and
productive decisions.
17
Not so easy
Yet being an authentic leader is hard. Trust and
transparency are viewed by stakeholders as commitments
to stability. As one CEO says, trust is created by a
promise, and [maintained by] meeting that promise over
and over again. This, of course, makes it difficult for
CEOs to adapt to new challenges, as the new behaviors
leaders employ to meet them risk being perceived by
stakeholders as contradictory. Such perceptions risk
destabilizing a CEOs authenticity, and thus squandering
the trust he or she has built up. With an ever-widening
collection of stakeholders with competing demands
requiring contradictory behaviors, CEOs will increasingly
Figure 9: Purpose is at
the core of authenticity
PRESSURE TO ADAPT
RESILIENCE
Capacity to adapt
authentically is a function
of purpose and resilience.
RESILIENCE
PURPOSE
AUTHENTICITY
PRESSURE TO ADAPT
64%
19
Be resilient
Accordingly, an overarching sense of purpose is a source of
internal resilience, another critical skill for being adaptable
yet authentic. Resilience (or as one CEO put it, the ability
to pick oneself back up off the floor when a crisis occurs)
provides leaders with the necessary self-awareness,
energy, and confidence to align action with purpose while
maintaining authenticity. Its not very glamorous, admits
one CEO, but [its] surprisingly important, not being
knocked off course if things dont work.
KEY INSIGHTS
Authenticity is top of mind and adaptability
top of agenda. Holding a productive tension
between the two is key.
The capacity to adapt authentically is critical
for maintaining trust and buy-in when responding
to competing demands and volatility.
Authenticity is a function of purpose and
resilience, which protect against indiscriminate
adaptation and anchor the CEO.
A well-defined and aligned purpose is
the touchstone for reducing doubt around
tough decisions and winning support for
their execution.
Long-term resilience is fueled by defining
experiences, especially of adversity. Day-to-day,
it is maintained through mindfulness,
self-awareness, exercise, family support,
or coaching.
21
Finding balance:
Choosing between
right and right
Sometimes you have to have the courage to say, I know this is the
right direction, the humility to say when youve got it wrong and deal
with it, but the courage to take action when you believe its the right
thing to dodespite the downside potential for yourself.
67%
of global CEOs
raise the challenge
of finding balance
as a salient concern
ORGANIZATIONAL
PURPOSE
DECISION
DECISION
DECISION
OPTIMISM
HASTE
HUBRIS
ADAPTABILITY
PERSONAL
PURPOSE
AUTHENTICITY
PESSIMISM
HUMILITY
HESITATION
Make it personal
Intuitively, we know that the more out of balance
the acrobat, the harder it is to spin multiple plates.
That is why balancing personal paradoxes is critical
for balancing organizational ones. While the former
23
KEY INSIGHTS
CEOs must constantly balance
between personal and organizational
paradoxes. Today this is a given
of the role. How CEOs balance their
personal paradoxes in the decisionmaking process greatly influences
the organizations confidence in
their decisions.
Losing sight of competing stakeholder
demands imbalances the organization
and increases reputational risk. CEOs
must look beyond the choices of either
or, and toward unlocking the potential
for bothand.
Pace and timing of decisions are critical.
Haste and hesitation can be equally
detrimental. Understanding when to speed
up or slow down is often the difference
between good and bad decisions.
25
Todays CEO:
Embracing continual
growth and renewal
Youve gone go-karting and then
suddenly youre given an F1 car.
50%
39%
8%
internal
promotions
external
placements
founder
CEOs
COMPETENCE
FORMATION
IN ROLE
TIME
27
KEY INSIGHTS
The CEO role is structurally unique, and
preparation therefore always incomplete.
Often, the specific demands of sudden
visibility and scrutiny, broad and
deep communication, board relationships,
and personal exposure take CEOs
by surprise.
The CEO career consists of interlocking
periods of personal growth, each
building on past accomplishments
and leading to new opportunities for
continued renewal.
It is often in moments of crisis that
CEOs successfully reinvent themselves
and trigger a new growth cycle.
To grow intoand withthe role, CEOs
need to create environments that feed
their curiosity, challenge their orthodoxies,
and fuel their continual learningand
unlearning.
29
Whats next:
Ensuring success
beyond succession
Start with integrity. It is the alignment
between your principles [and] what you do and
it [requires] courage. Courage is paramount.
Be the leader
Can these skills be developed on the job? Or are they
prerequisites? Interestingly, there was little consensus
here: our CEO interviewees held very strong opinions
in both directions (surprising, perhaps, given that many
of the important skills the CEOs cited were ones they
themselves had learned on the job). The fact is, though,
rigorous preparation for the job and further development
on the job are both essential.
When asked what would make the necessary
transformation smoother for their successors, CEOs
focused on many of the themes found in this report:
achieve comfort with change, harness the power of doubt,
be curious, collaborate, be adaptable, have purpose, and
seek balance. In particular, they advised aspirants of all
stripes to learn to feel comfortable collaborating and
drawing opinions from a diverse array of individuals. As
one CEO suggests, Get separate independent soundings
from the organization create a sense of teamwork
communicating to people that their ideas are important
and they can be honest. Furthermore, they advised future
leaders to take thoughtful risks and be willing to fail:
Take a bit of risk; it doesnt matter if the first one doesnt
work or even the second one doesnt work, the third one
probably will because youll get sharper and smarter each
time you go. Such a mind-set of continuous personal
improvement is a vital quality for tomorrows leaders.
KEY INSIGHTS
Potential CEOs must have strong core
experience (general management, finance,
and people management, among others),
but increasingly, softer skills are imperative.
Future CEOs will need to be flexible, systemic
thinkers, and comfortable with uncertainty,
complexity, and constant change.
CEOs communication skills need to be much
more sophisticated to effectively address
diverse and divergent stakeholders: more
audiences, more languages, more modes.
Maintaining the trust of multiple
stakeholders requires CEOs to display
strong personal purpose and authenticity.
Qualities including self-awareness, humility,
purpose, and authenticity are all critical
requirements for next-generation CEOs who
should aspire to collaborative command.
For tomorrows CEOs, continuous learning
will not be an option, but a must.
31
REGIONAL RESULTS
Sub-Saharan
APAC
Africa
#1
Unemployment
(3.00)
#1
Growing Asian
middle class
Europe
LATAM
MENA
North America
#1
#1
#1
#1
(3.33)
(3.80)
Cyber threats
Lack of values
(3.97)
#2 Income
disparities (2.80)
#3 Growing Asian
middle class (2.75)
#2 Cyber threats
(3.41)
#3 Lost confidence
in economic policy
(3.31)
3.32
3.28
3.23
3.08
3.07
2.86
2.75
2.64
2.36
2.24
#2 Lost confidence
in economic policy
(3.31)
#3 Growing Asian
middle class (3.24)
#2 Online
misinformation
(3.30)
#3 Lost confidence
in economic policy
(3.00)
#2 Lost confidence
in economic policy
(3.36)
#3 Lack of values
(3.27)
#2 Growing Asian
middle class (3.39)
#3 Lost confidence
in economic policy
(3.09)
SECTORAL RESULTS
Consumer
Finance
Industrial
Life
Services
Technology
#1
#1
#1
#1
#1
#1
(3.08)
(3.93)
Unemployment
#2 Megacities (2.97)/
Lost confidence in
economic policy
(2.97)
#3 Growing Asian
middle class (2.89)
Cyber threats
#2 Lost confidence
in economic policy
(3.52)
#3 Growing Asian
middle class (3.44)
Lost confidence
in economic
policy (3.19)
#2 Megacities
(3.13)
#3 Growing Asian
middle class (3.06)
Growing Asian
middle class
(3.83)
Lack of values/
Growing Asian
middle class
#2 Lost confidence
in economic policy
(3.50)
#3 Cyber threats
(3.00)
#2 Cyber threats
(3.75)
#3 Lost confidence
in economic policy
(3.50)
Cyber threats
(4.07)
(3.81)
#2 Growing Asian
middle class (3.71)
#3 Megacities
(3.36)
GLOBAL RESULTS
Rate your level
of accountability to
different stakeholders.
REGIONAL RESULTS
Sub-Saharan
APAC
Africa
#1
Employees
(4.80)
#2 Customers
(4.60) / Owners/
shareholders (4.60)
#3 Financial
Community (4.20)
#1
Owners/
shareholders
Owners/shareholders
Customers
Employees
Managers
Financial community
Government
Suppliers
Competitors
Activists
Unions
Trade associations
Political groups
4.67
4.53
4.31
3.89
3.65
3.64
3.08
2.66
2.23
2.18
2.12
1.83
Europe
LATAM
MENA
North America
#1
#1
#1
#1
Owners/
shareholders
Owners/
shareholders
(4.90)
Owners/
shareholders
Customers
(4.67)
(4.82)
(4.69)
(4.67)
#2 Customers
(4.79)
#3 Employees
(4.43)
#2 Customers
(4.43)
#3 Employees
(4.36)
#2 Customers/
(4.20) Employees
(4.20)
#3 Managers (3.80)
#2 Customers
(4.20)
#3 Financial
community (4.00)/
Employees (4.00)
#2 Owners/
shareholders (4.45)
#3 Employees
(4.25)
SECTORAL RESULTS
Consumer
Finance
Industrial
Life
Services
Technology
#1
#1
#1
#1
#1
#1
(4.73)
(4.81)
Owners/
shareholders
(4.77)
#2 Customers
(4.44)
#3 Employees
(4.23)
Owners/
shareholders
(4.69)
#2 Employees
(4.46)
#3 Customers (4.35)
Customers
#2 Owners/
shareholders (4.67)
#3 Employees
(4.36)
Customers
#2 Owners/
shareholders (4.40)
#3 Financial
community (3.60)/
Government (3.60)/
Employees (3.60)
Owners/
shareholders
(4.75)
#2 Customers
(4.63)
#3 Employees
(4.60)
Customers
(4.43)
#2 Owners/
shareholders (4.36)
#3 Employees
(4.07)
33
Acknowledgments
We would like to express our gratitude to the more
than 150 CEOs we interviewed and thank them for
taking the time to share their deep and personal
insights. We would also like to thank their personal
and support staff who did a magnificent job of creating
time in their very busy schedules. Thank you!
Sad Business School
Professor Tim Morris, Dr. Andrew White, Dr. Michael
Smets, Dr. Amanda Moss Cowan, Dr. Andromachi
Athanasopoulou, Dr. Ted Malloch, Lyn Martin, Emily
Owen, Dr. Bryn Harris, and Alison McQuater
Heidrick and Struggles
Valerie Germain, Dr. Karen West, Dave Tullett, Patience
Berry, Tom Fleming, and a global team of H&S search,
leadership, and culture-shaping consultants who
interviewed alongside our core research team
Contacts
For further information on The CEO Report, please contact:
Sad Business School
Dr. Andrew White, Associate Dean for Executive Education
[email protected]
Sad Business School
Executive Education Centre, Egrove Park
Oxford OX1 5NY
UK
Heidrick & Struggles
Valerie Germain, Managing Partner
[email protected]
Heidrick & Struggles
1114 Avenue of the Americas
New York, New York 10036
USA
Method
The CEO Report is based on rich, individual
conversations with more than 150 CEOs representing
a wide range of sectors around the world, making it
one of the most comprehensive in-depth studies of
how global CEOs lead. Collectively, these CEOs have
more than 880 years of experience.
Assured of their anonymity, the CEOs reflected
openly on their leadership challenges and experiences.
Open-ended questions allowed them to elaborate
freely and gave us a glimpse of todays business
world through the eyes of its most senior leaders.
We therefore let CEOs speak for themselves as
we presented our analysis in this report.
Each interview lasted an average of 55 minutes
and, with few exceptions, was conducted face-to-face.
All interviews were anonymized prior to analysis by
researchers at Sad Business School, University of
Oxford.
About our
Sample
An average tenure of 6.5 years. A combined total
of 5.8 m employees, with an average of just over
46,000. A combined total of $1,658 bn in revenues,
with an average of over $14,419 m.
We interviewed more than 150 CEOs from around
the globe: Africa 3%, APAC 22%, LATAM 7%, Europe
30%, MENA 11%, N. AM 27%.
We covered a broad range of industries and
sectors: Consumer 30%, Finance 19%, Industrial
25%, Life Science 4%, Professional services 12%,
Technology 10%.
Women CEOs made up 8% of the sample. In addition
to drawing participants from the key global indices
such as Forbes, Fortune and S&P, we also drew on a
selection of private, family-run, and local companies.