James Petter, managing director UK/Ireland at EMC, discusses the business leader’s approach to risk, innovation and technology
Finding strong business leaders has always been a challenge. It takes a unique combination of skill and personality to take the top job. Indeed, we’ve recently seen many examples of the consequences of poor leadership, BlackBerry’s swift decline was linked to reports of infighting at its executive level, unsettling its ability to compete.
Yet of course it is the CEO who can have the most profound transformative impact on a business. Look at Angela Ahrendts, the former Burberry chief who recently announced her departure to Apple and was credited with making Burberry a global powerhouse. It will be interesting to see how the Apple’s new senior vice president will fair in a company that has had a relatively tough year since Steve Job’s passing.
What many of these CEOs are contending with is a very real and immediate sense of market disruption. Whether this is through regulation, market consolidation and/or technology, businesses are being forced to undergo substantial change in order to keep or grow their market position, against a backdrop of limited growth.
Pioneering leaders are needed to ensure organisations stay ahead and this requires real insight into the subtleties of the market place and a radar for what’s coming next. CEOs therefore need a head for dealing with the risk that comes hand-in-hand with innovation and change, the courage to make those decisions, the teams to implement them, and, of course, some luck to make it through.
A new report I developed alongside a panel of CXOs – EMC Leader 2020 – describes the context of this change, with over two thirds of CXOs being disrupted by technology, new market entrants and regulation. In this context, clear and decisive leadership is the order of the day. Indeed, 85% of CXOs claim they’re ready to embrace change, yet over half report they find it hard to handle, which becomes problematic for the CEO.
A big part of this problem is ‘analysis paralysis’, a significant focus on consensus, analysis and data gathering that slows the decision making process. Despite the fact that most organisations recognise the need for major change, 99% of CXOs said that their senior management team’s inability to make decisions is caused by it to some degree.
However, a business must change or it will stagnate and this is why leaders have no choice but to evolve or die. The challenge for modern CEOs is to build a culture of innovation that is both top-down and bottom-up, drawing on the broadest possible pool of talent in a business’ ecosystem. Whether this comes from a company’s own staff, its partners, and subsidiaries, or even further afield.
The CEO needs to nurture innovation and therefore develop a leadership team that will encourage change and allow staff to try new things. However, business leaders also need to find the right balance between providing a clear governance framework and giving staff free reign.
Another challenge for the CEO is the inability to keep up with the accelerated changes brought about by rapid technology developments. 84% of CXOs felt that their senior management team needed a better grasp of their sectors technologies and 50% said they were ‘rooted in the past’. Fewer than half build technology skills into succession planning, and yet clearly this is something that needs to be accounted for as companies look to compete.
Fundamentally, business leadership pressures are starker than ever before. Many CEOs have clearly been unable to meet the ambitious terms of their engagements, and deliver the turnarounds in challenging and changing markets. Yet, there are a number of successful CEOs setting an example. Our own CEO, Joe Tucci, has found a structure for change and growth that has seen EMC go from strength to strength. However, it is in the structures and culture they’ve created that demonstrates their leadership. Nokia and BlackBerry are both seeing out 2013 as shadows of their former selves, on the market for fractions of their all-time highs. They won’t be the last to vanish from the markets in the years ahead.