Taking on board the CEOs views
Taking on board the CEOs views
The CEO Barometer Survey is an annual report created this year with the input of 538 respondents and produced in collaboration between us at Alumni alongside financial newspaper Dagens Industri, CFI Group and leadership consultancy Straleda. Hans Nilsson, Senior Consultant at Alumni looks at an overview of the results of the survey and discusses the key takeaways he believes board members should be reflecting on.
Taking a longer view
There were many positives arising from the turmoil of 2020. Relationships between the board and the CEO, and between the CEO and the executive team definitely improved as they coalesced around fighting a common enemy. Greater agility, the increased pace and scope of digitisation, flexible working, employee engagement, and customer satisfaction are all benefits that boards should follow up and review with the CEO for the long-term strategy, in order to create a culture that supports growth and profitability.
Partly as a result of the turmoil of last year’s crisis but also more generally, CEOs report that many boards are still too focussed on short-term KPIs and specific operational issues. Particularly as businesses are moving beyond the pandemic and into recovery and growth phases, CEOs are asking for boards to lift their heads and increase their strategic and direction for future growth and profitability. Where does the business want to be in 5 years’ time and how can they get there?
This year’s survey showed that overall CEOs were more satisfied with their boards but still felt that there were improvements to be made. The respondents directly correlated profitability with boards that have a clear strategic focus on customers, employee satisfaction and sustainability. CEOs wonder whether boards are asking the right questions and providing a clear direction for the leadership team on longer term strategic objectives for the business. Ultimately CEOs are tasking the Chair of the Board to provide the vision and direction of travel and to make it clear and unambiguous.
The skills gap threat
CEOs clearly see that one of the biggest barriers to growth remains the skills gap and lack of specific competencies. The survey shows that the scarcity of talent as a factor has decreased slightly over the last year, but this is likely due to high levels of redundancy as companies went under, combined with the reduced churn associated with job insecurity for many employees. Without doubt it will come back with a vengeance when the employee market restabilises. Competency gaps in the executive team and the wider organisation are likely to pose a major problem to achieving growth.
Sustainability is a hot topic. Not only does it impact on all areas of the business in terms of costs, supply chain and brand perception but it is also a major attractor to socially conscious millennials. This is just one example of how creating the right culture and modernising the business to present an attractive employer brand to scarce talent will be key to survival. Embedding the new ways of working and learning to do them better will also be a major attraction for talent that has lost the commute, had a taste of flexibility and liked it.
Supporting the CEO
The pandemic definitely threw a spotlight on the crucial nature and efficacy of the relationship between the board and their CEO. The stark reality is that succession planning for the CEO and the wider leadership for the organisation is something that cannot be ignored if information is to flow effectively between the business and its stewards.
The tenure for CEOs is on a downward trend and there is a risk that business objectives will foreshorten, when CEOs are looking at shorter placements as individuals in combination with a board that has insufficient long-term strategic vision. This brings us directly back to importance of inspiring CEOs with a longer-term vision for the organisation in order that they can picture themselves as champions for the business over a lengthier time period. Short-term business issues for leaders will tend to be similar wherever they are placed, but strategic direction, vision and developing culture provides an incentive to dig-in, make tangible changes and truly buy into the future of the company.
Mentoring, assessing, and developing the CEO and wider executive team can be an invaluable way to incentivise them to be in the business for the long haul. It also mitigates having to seek scarce leadership competencies in a competitive market. If boards are able to invest, their time and resources into giving accurate feedback to their CEO and leadership and upskilling them where necessary it will pay dividends for the future benefit of the company.
The full results of the CEO Barometer can be found here:
—> The results of the 2021 CEO Survey - VD Barometern
Alumni has over 30 years’ international experience in board and leadership evaluations and finding the best talent in scarce markets for all levels within an organisation. If you would like to discuss these topics in further depth or learn more about the results of our survey, please do get in touch.
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