What’s on the minds of business leaders across the globe? Rebecca Ray, Ph.D., co-author of the recently released C-Suite Challenge, has some insights about that. The report is the latest in a survey series first conducted in 1999 by The Conference Board, a global, independent business membership and research association that aims to provide leading global organizations with the practical knowledge to improve their performance while better serving society.
Late last year, 1,000 C-suite business leaders around the world — CEOs as well as CHROs, CFOs, and CMOs for the first time in what has been a CEO-only survey — shared the top challenges facing their organizations in 2018 and their strategies for meeting those challenges with The Conference Board and Ray, the organization’s executive vice president, knowledge organization. In a wide-ranging interview, Ray talked about the value leaders place on corporate culture, inclusive work environments, generations in the workplace, and what worries different members of the C-suite when it comes to the future of knowledge workers.
How did business leaders’ concerns differ this year compared to recent years?
I would say that in years past there was more concern around a global recession, and those fears have lessened. They are very concerned about other economic issues like global trade and they also seem to be very concerned about income inequity. There are concerns that that’s on the rise.
In terms of gender inequity?
There’s some of that, but it’s largely around the difference between what senior leaders make and rank and file. It’s about as many different ways as you can slice inequity, but largely it’s around CEO pay. And there is a real concern about finding workers with the right skills and talents — they also fear that they’re going to have to pay more to get the ones they want.
Do CHROs express different concerns?
They foresee a very different workplace going forward. And we asked them very specifically about the kinds of things that they would envision in the future — what those employees will look like. They think there will be fewer of the traditional full-time employees, they will no longer be the predominant profile. I think 79–80 percent said they’re going to have many more directly hired contingent workers, freelancers, and many more workers that come from managed-service providers.
My fear is also with the rise of the contingent or gig workers. I think organizations welcome them, but they also run the risk that when that person has gained that experience or skill or has that new knowledge set, it goes right out the door when the project’s over. Most companies have not done well with transferring or capturing knowledge.
And my fear is for the contingent worker. It’s exciting. You have flexibility. It’s new stuff all the time. And this is great while you’re young. You’ve got your workspace and you’re having the keg parties on Friday nights. It’s just a heady world. But you wake up one day and 10 years have gone by, and you don’t have a 401K or IRA that you contributed to. You’ve lost that window for investing for your retirement. You may not have medical benefits — and so you’re less likely to act quickly when you have a health issue.
Are there concerns specific to different generations in the workplace?
We can reasonably expect today’s newborns to live to be 100 years old. That really upends the way you think about the segments of your life. There are no guarantees for sure, but it makes you think differently about what’s the portable skill set that I need to develop so that no matter what happens in my life I’m able to take care of myself and my family, and I’m able to provide for basic needs as well as for a decent living. That’s what I think drives so much of a desire to continually develop, because no company is going to make a 30- or 40-year commitment to you. It’s how employable you can remain. There has been some research out there that talks about the fact that companies have been burned. If indeed they manage to have a more, let’s say, earlier–in-career workforce for the most part, what they give up is the experience, the judgment, and the industry knowledge that comes with more seasoned workers.
A loss of institutional knowledge.
Sometimes you do need some seasoned hands at the helm. And I think also especially when you’re thinking about those who manage. Now I’ve done some work on millennial leadership. I’m the first to tell you that at the 14 iconic companies that were involved in this particular study, there were some extraordinary leaders. They describe the job they do, the scope of their work, and the number of people they supervise — and my brain explodes. These are very, very young people. I’m not at all worried about the future of industry. I’m really not. I was very comforted, but I think there is something to be said for having had a chance to be a manager for a while. Because in times of turbulence, you do want somebody who has seen things well enough to know how to manage through different kinds of cycles.
And that comes with experience. You learn things, and you get a little bit better and you hope that the early mistakes are not so huge or permanent. My first few times as a manager, was I perfect? Absolutely not. Am I perfect now? No. But I think I’m better than I used to be. One of the shocks of managing is that your instincts may be one thing, but what you need to do from a legal perspective or what actually works with other human beings might be something different. It takes a while to get to know that.
I am concerned about getting this new workplace stuff right because what you have — whether these are full-time employees, part-time, contingent, robots, spin the dial — is an organizational culture. In the report, CHROs were particularly concerned about the impact of engagement in particular with nontraditional employees. And in fact, when we said the workforce of the future is going to have its own set of challenges, what are your primary concerns with leveraging nontraditional employees, their top one — both CEOs and CHROs — was finding workers with appropriate skills, which I thought was telling.
What was their next concern?
The second or the third one, depending on which group [of respondents], was engagement and retention of nontraditional employees over whom you have a lot less control. Let’s think about that for a second. You have these nontraditional workers, right? You’ve got somebody you retained for a project or for a certain period of time or they’ve been brought in by a managed-service provider. They’ve got a badge. Sometimes we make them use a different entrance. We usually don’t let them come to anything that looks like training. We don’t give them benefits. You carve these people out as different and yet they sit next to each other. You expect them all to be rowing the boat the same direction to get done whatever it is they’re doing, and that cannot be the same cultural experience for the nontraditional employee as it is the traditional employee.
So corporate culture is also a big concern?
Culture is king (or queen, not to be sexist). I think they’re all concerned about building an inclusive culture and building a speak-up culture. Now, inclusion does a couple of things. It’s about diversity of opinion and experience as well as it is diversity of life experiences. But I think there’s a shift generally away from thinking about this solely as diversity, which is a focus on how we are different versus that evolution toward inclusion — which is what we have in common. While we appreciate the differences, where can we find common ground?
You can look at the Me Too movement as an organizational culture failure. I’d be willing to bet you that most of the organizations [that have fired executives recently over harassment charges] had a policy statement. They probably had training classes. They probably had a hotline. They probably had something in the employee handbook that said this is unacceptable behavior. You have to ask yourself what happened, and sometimes these things happen because you have an organizational culture that fails to enforce the values and underpinnings that have been stated.
That’s a cultural failure, and that’s a speak-up culture that didn’t materialize because people felt as though if they did speak up, nothing would happen.
Right — or worse.
Right, if they did speak up, they would be retaliated against. That’s why I think culture’s so important. That’s one obvious example, but speak-up culture plays itself out in different ways. Let’s say you have an operating room where someone who isn’t the highly regarded neurosurgeon sees something wrong but doesn’t feel because of the reputation of this neurosurgeon that he or she can speak up. There are the numerous cases where planes have gone down, and we listen to the recordings in the black box, and it’s because a junior officer is not heard or didn’t speak up.
Those instances are life-and-death situations, but if people feel as though they can’t speak up because of organizational disparities or whatever the case may be, you don’t get the direct voice of the customer, perhaps. You don’t get the real-time feedback on a product or service. You don’t get the ability to be agile as an organization because you have to wait for things to go up the chain of command.
Has this been a theme for the last few years?
I can tell you that a speak-up culture has been part of the findings for the last couple of years. Last year CEOs were concerned about Brexit. This year, it’s a blip. Some years, cyber and global terrorism were really high on the list. Now, not so much. And part of that is not that they don’t think it’s an important issue, but that they have things in place to control what they can control. You can’t plan for black-swan events, but you can prepare for them. Sometimes.
Where does technology come into play in the results?
We spent some time asking questions around the skills that leaders are going to need to have — particularly those who are going to lead digital transformation. The number one [response] was that they wanted a strategic thinker. Now this is the global set of findings — this is the CEOs on a global basis. That was number one in the U.S. It was number one in Asia. It was a little lower in Europe and Latin America, but set that aside for a moment. We pulled out the CFO and the CHRO responses. And their No. 1 skill set was inspiring and engaging — nothing to do with technology.
In fact, when you think about where technology
Part of the survey was to ask about hot-button issues — what’s keeping business leaders up at night? And you know what was high on hot-button issues for CHROs in a way that it wasn’t for CEOs? For CEOs, it was the failure to attract and retain top talent. It was number one for CFOs and it was number one for CHROs. If you look on a geographic basis, it was number one in the U.S., number one in Asia, number one in Latin America. It was second in Europe, but they’re more concerned about new competitors.
So far so good, right? Then you get to developing the next generation of leaders, which has traditionally been one or two in terms of CEOs’ concerns in the last few years. What’s come up are new business models and disruption and new competitors. Developing the next generation of leaders is now number five on the global CEO slice of the data. But it’s a whole lot higher for CHROs who are pretty concerned about the exit of leaders, boomers who are finally leaving the building.
I think we spent a lot more time in the past pushing people forward who had deep expertise in a particular area and then we’d have a special group of high potentials that we groom as general managers, and we’d bounce them around for years, and then eventually they come out of the rock-smoothing machine as this well-rounded general manager. Sort of somebody who’s an heir apparent. We don’t have that time anymore, and we have to groom them a lot faster. If you are not really careful, you’re going to have a group of people who are pushed so far and so fast that they’re not really ready.
Companies have sort of a tough choice. You can promote some of these Gen Xers. Great. But a lot of people have gotten excited about the new shiny millennials. They have to be really careful about Gen Xers because those are the kind of people who are very loyal and waited a lot longer than they thought they should have because boomers whose financial portfolios tanked stayed around a lot longer and are still in the workplace.
Leaders are reaching down into the millennial ranks and pushing them along because they think they’re more digital savvy. But we did a different piece of research that looks at digital leadership, and millennials are not all that much more comfortable leading through digital transformation than any other generation. Because remember, if you look at the skills that the C-suite said were important for the future and leading people through the digital transformation — it was about empathy, and it was about being a strategic thinker, and it was about building collaboration. Those skills take time to develop.