Stephen A. Miles, Vice Chairman of Heidrick & Struggles and Head of the firm’s Leadership Advisory Services, believes that the role of CEO is changing. "Driving Diversity" is a key challenge for CEOs of the future. "“We have now spent decades talking about diversity, and it is now time to move from a compliance-based approach to one where we truly build (and value) diverse companies and boards" says Stephen. "As part of their greater engagement with recruiting and talent management, CEOs will need to drive diversity in their organizations rather than making this an HR issue. A number of countries are taking a legislative view regarding gender diversity on boards (UK and Australia), and are set to begin to mandate the percentage of female directors that must be on boards. With the combined drivers of a renewed call for quotas and the growing business case in support of diversity, the CEO will be expected to take concrete action steps toward creating a diverse workplace.”
Another key change for CEOs according to Stephen is moving from a “business case” to “social business case” thought process. “As companies weigh decisions such as entering a new market or embarking on a multi-jurisdictional acquisition, the ‘business case’ must now be viewed through a new lens: how will this business decision impact the country/region/state/province they are going into? It is no longer enough for companies to simply make a good business case or meet the ‘legal requirements’; they must make the case to the local stakeholders that this move will benefit the target community, who may have concerns about, for instance, the environmental impact. On the flip side, the transformation of developing local economies due to a major corporate presence can then affect the original business case..."
Stephen also believes CEOs must understand shifting employee values. “Managing the demographic changes as baby boomers move into retirement and ‘millennials’ come up through the ranks is something no CEO should overlook or just delegate to HR. The CEO needs to understand the motivations and values of his or her workforce in order to leverage organizational capabilities. He or she must also know the risks involved in a less ‘loyal’ employee base who may not, for instance, be as willing to move for a job as were the ‘company people’ in previous generations."
And in addition to understanding its employees, Stephen emphasizes a CEO must build a global leadership pipeline. “It is incumbent upon every CEO to ensure that he or she has a robust and ‘global’ pipeline of talent throughout the organization, especially at the senior-most levels, and that multi-year succession is regularly discussed at the management and board levels. It is critical that investment in these programs is a priority regardless of the economic cycle – they cannot be ‘fair weather’ programs. As the recent survey that Heidrick & Struggles conducted with Stanford’s Rock Center found, 51% of companies cannot name a CEO immediately if needed, and 39% have no internal candidates whatsoever. To that end, it is important that CEOs encourage their boards to recruit directors with succession expertise and experience, and to help make the all-important issue of succession a top corporate priority.”
