Early last year, one of the automotive industry’s biggest players did the unexpected and decided to upset the status quo: It let go of its CEO, a veteran who led the company to record profits, replacing him with someone who had spent most of his professional life leading an office furniture company.
Ford Motor’s executive chair explained the decision by acknowledging the new normal in his industry: iconic brands are no longer just competing with each other, but also with the more agile, fast-changing tech industry. Ford decided to bet on a CEO who has a wealth of experience not in auto manufacturing but in innovation and in turning a traditional manufacturing company into an organization that is tech- and future-focused.
The auto industry isn’t the only sector experiencing transformational change, which means leaders everywhere are facing new demands and expectations when it comes to their responsibilities and capabilities. After speaking with the CEOs of 24 massive, complex, global organizations from highly dynamic industries such as retail, banking and manufacturing, Deloitte has identified five issues that a stubborn CEO must learn to accept.
1. Embrace ambidexterity
One of the CEOs Deloitte spoke with likened the challenge of leading the current pharmaceutical industry to having to “fly the plane while you’re changing it.” Before, CEOs were expected to steer their organizations through two or three major crises. Today, they have to navigate through constant turbulence.
To succeed, a CEO has to be comfortable with ambiguity and chaos. He or she has to have one eye on exploration to stay ahead of the curve and another on opportunities in the here and now. While being comfortable with chaos may be a function of one’s personality or temperament, many of the CEOs Deloitte spoke with said they developed the attitude over time, no doubt after several attempts at balancing the need for reliable profitability and risky breakthroughs.
2. Cultivate emotional fortitude
Deloitte defines emotional fortitude as a “leader’s [ability] to combine a sober assessment of potential risks and roadblocks with the fearlessness to pursue lofty visions.” Part of thriving in chaos is understanding the opportunities it offers and not being afraid to take them.
Going further than that, a CEO must also be able to create a culture that encourages this kind of attitude, where employees are emboldened—rather than paralyzed—when confronted by a rapidly changing landscape. Some CEOs do this by rewarding employees who come up with risky but well-conceived ideas, even if they fail. This sends the message that it’s OK to make a mistake since failure in some way is likely a part of the road to innovation.
3. Encourage a beginner’s mind-set
Recently, one Deloitte member firm took a group of senior executives from a Fortune Global 500 company on what may seem like a counterintuitive half-day immersion tour: Instead of visiting a similarly sized, multinational company, these executives spent their time with start-ups and accelerators—young, compact, dynamic teams with diverse products and services, all leveraging technology and committed to innovation. One of the goals of the exercise was to help these executives shed the traditional expectation that they were the smartest people in the room.
Beginners acknowledge they don’t know everything, that they don’t have all the answers. And so they must listen more intently, consider all ideas without judgment and remain genuinely curious.
The CEOs Deloitte interviewed acknowledged that, rather than projecting confidence that comes with experience, it is more important for leaders to invite diverse ideas and perspectives and question their own assumptions, and from there, recognize patterns that can help them stay ahead of a disruptive threat or address the one already confronting them.
4. Master disruptive jujitsu
One CEO who participated in the Deloitte interview said he watched out for disruptive patterns by “looking for … a piece of discordant data that no one else is paying attention to.” This involves gathering and distilling information from the outside and engaging others in the difficult task of prioritizing and interpreting what could be a wealth of dissonant, disorganized data.
But the work doesn’t stop there. The CEO has to find ways to turn those threats into opportunities to improve competitive advantage.
5. Become the ultimate end-user ethnographer
Now more than ever, end users—i.e., consumers, customers, clients—have a powerful voice and multiple ways to make sure they are heard. While immediate, unfiltered, public feedback may be a cause for concern for some, unwavering leaders recognize these opinions can and should be mined to better understand customer needs and attitudes. While there are many new technologies that allow organizations to monitor customer experience, sometimes only by watching customers use a product can one fully understand what is and isn’t working.
The CEOs Deloitte spoke with emphasized the need to focus on the entire experience a customer has with their business—from the marketing approach to the after-sales service. In doing so, there’s a chance the company will hit on a need that goes beyond the customer’s consciousness—and that could be the seed for disruptive change.
These five attributes suggest it may be time to retire that stereotype of CEOs as impenetrable, all-knowing sages sitting at the top of the corporate hierarchy, overseeing an organization the way a conductor handles a symphony orchestra. To maintain that role is to miss out on all the action.
Instead, a new, more nuanced approach to leadership—one where CEOs collaborate more, constantly reinvent their work, and engage fully as part of a team—is needed in order to succeed and to stay relevant.
Deloitte likens the task to being a jazz bandleader: Just as jazz can be risky, unpredictable, and slippery, so can the current business landscape. Organizations are going to need leaders who can improvise and make the most of these shifting trends and demands if they are to continue moving forward.