CEO Disrupters Coming in the Next Decade

February 28, 2019 – In this new world of ecosystems defined by increasingly rapid technological change and digital innovation, it has become vitally important to have leaders who are well-rounded, resilient and prepared to make the changes required to stay ahead of disruptive conditions. A new report by Russell Reynolds Associates peers into the future and explores the key qualities required of forward-looking CEOs.

“Richness and diversity of experience and skills are key qualities in forward-looking CEOs,” said Jesús Arévalo García, executive director of the search firm and author of the report. “If they are to be effective in resetting company strategy, the breadth of their knowledge has to stretch well beyond the strictly business sphere. The leadership role in the next decade will be taken on by what we call ecosystem CEOs, who will not simply be managing company assets and resources, but will also have to interact creatively with banks, investors, stakeholders and so on.”

Strategic partnerships between companies, of course, are nothing new. “But what we are dealing with today is a structural change in corporate relations which means that CEOs must now seek out complementary strategic partners with whom to share expertise, resources and risk,” said Mr. Arévalo García.

“At Russell Reynolds Associates, we recently completed an in-depth study that highlighted the importance for modern-day leadership of personality traits – pragmatism, reluctance, vulnerability and ability to connect – that we describe as quiet leadership attributes,” Mr. Arévalo García said. “In characterizing the role of a CEO, loud words such as passion, inspire, influence, charisma and energy were used three times more often than those describing quiet attributes like humility, authenticity and being a good listener.”

Having a strong personality, on the “loud” side, does not necessarily result in the better exercise of management. Far from it, according to the report. The capacity to connect with others, to be vulnerable or to display a certain reluctance to take a particular risk are traits that are closely associated with character and integrity.

Jesús Arévalo García is a member of the technology sector practice at Russell Reynolds Associates, based in Madrid. In his work as an advisor to both regional and international clients, he specializes in recruiting talent in the digital technology space. Mr. Arévalo García leverages his broad industry experience to work with clients ranging from multinationals to startups as they navigate a changing digital landscape. He joined Russell Reynolds from Microsoft, where he was chief operating officer and chief marketing officer for Microsoft Norway.

Core Leadership Competencies

The best leaders are not defined by one particular personality trait, but by their ability to span the apparently contradictory differentiator pairs in each of the four core leadership competencies. “In other words, the most effective leaders can be as disruptive as they are pragmatic, as risk-taking as they are reluctant, as heroic as they are vulnerable and as galvanizing as they are connecting,” said Mr. Arévalo García. “It is vital that CEOs are capable of taking risky decisions, but these must also be calculated ones, appropriately prioritized and properly monitored. They must also be able to critically examine their own decisions and their consequent evolution.”

A heroic leader has a strong personality and a high degree of energy, charisma and organizational skill. “But vulnerability is also essential, in the sense of being humble, learning from mistakes and open to feedback and constructive criticism,” said Mr. Arévalo García. “Effective leadership is characterized by both a galvanizing side that challenges and stimulates the different teams horizontally, and a connecting side, that promotes and encourages sustainable team-to-team collaboration and trust throughout the company.”

Related: 10 Traits of Transformational CEOs

All these qualities are essential to effective leadership from the top in all industries and cultures, said the study, and integrity and resilience are the two most important attributes of senior executives. “When it comes to finding the best possible leaders for the coming decade, we at Russell Reynolds believe that it is crucial to adopt a balanced approach, taking into account both the loud and the quiet attributes of potential candidates,” Mr. Arévalo García said. “It is the combination of these that defines effective leaders and gives them the capacity to adapt to changing circumstances.”

Long-Term Strategies

We now operate in a world characterized by ecosystems that require senior executives to be highly aware of and skilled at dealing with prevailing conditions at all levels, said the Russell Reynolds report. They have to develop long-term strategies that take into account different factors such as the creation of reliable partnerships and the introduction of systems that promote innovation and encourage all staff to come up with disruptive ideas and proposals.

Why Innovative Leaders Remain Critical
In today’s rapid-cycle business environment driven by technology advances, increasing and dynamic customer expectations, and a shifting competitive landscape, continual innovation has become an existential imperative for most companies — and having the right leadership in place to drive change throughout the organization is critical.

“In other words, a management model that is also more humble,” said Mr. Arévalo García. “Modern CEOs should be open to feedback, create and encourage alignment around strategy, and ensure that their management team is fully aware of their new direction and vision and committed to collaborating in its successful execution. Executives that can effectively integrate their internal vision with their external relations with other players are the ones who will achieve success.”

Although the world is still divided into different sectors (industry, retail, energy provision, healthcare, etc.), they all must respond to the consequences of digital transformation. “In turn, digitalization is now redefining the profile of the new CEOs: It is time to sweep away resistance to change and set aside the idea that all that is needed is a few specialists to steer companies into the new digital age,” said Mr. Arévalo García. “What is required now is leaders who think deep and act fast.”

Another crucial aspect for the future of firms and the pursuit of organizational resilience is diversity. “Diversity allows a business to anticipate and mitigate risk more effectively, and to capitalize on a much broader range of opportunities,” he said.

Related: How Collaboration and Diversity in the Workplace Promotes Innovation

“In this sense, it becomes vitally important that leaders have the capacity to create a culture and environment where the power of all forms of diversity can be fully realized throughout the organization,” said Mr. Arévalo García. “This will undoubtedly be one of the defining leadership attributes for the next generation.”

Final Thoughts

“At Russell Reynolds, we have discovered that the executives who create an inclusive atmosphere and achieve success in rapidly changing environments are those that have the ability to empower diverse talents, to listen closely to all the members of their team, to respond well to challenges and to accept and process different points of view,” Mr. Arévalo García said. “Supportive, strong and open to being vulnerable, they are the leaders who best manage intercultural diversity and take full advantage of all the potential that it inevitably generates.”

Related: Five Ways to Identify Transformational Talent

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media