This is an excerpt of "Pressing Issues for C-Suite Leaders in 2018," from AESC Executive Talent Magazine.
Identifying the critical challenges global business leaders and their organizations will face remains important and complex. How are organizations reinventing themselves for the digital age and how are leaders managing digital transformation? For 18 years, The Conference Board (TCB) has surveyed CEOs from around the world to better understand the challenges executives face and the strategies used to address them. This highly-anticipated annual research report has been expanded this year, to include the full C-Suite in TCB’s “C-Suite ChallengeTM 2018: Reinventing the Organization for the Digital Age.”
Among the report’s key insights, organizations cite the need for radical change and reinvention. And for many organizations, reinvention begins with digital transformation. But just what does that mean, exactly? For Ray, “digital transformation is less about the technology itself, and more about how you need to transform your organization to leverage that technology: to have better data insights, better delivery, to have that introspection.” Speaking of the survey, she says, “One of the questions we asked was around what leadership qualities do you need for this digital transformation. 'Technology savvy' ranked only number twelve.”
Ray and other researchers have observed that many studies in the digital leadership space lead to similar conclusions, including the idea that effective leadership in the digital age centers “around being an inspiring, engaging leader, being entrepreneurial, a strategic thinker, and effective at change management.” For Ray, “I think part of that is because the technology moves so fast, is so complicated, and is so interconnected that you cannot know everything you need to know. Then the question becomes how can you lead people through a process that may or may not be a clear definitive path?” She adds, “There’s no final destination— where you think you’re headed is not necessarily where you need to go, and you may not know that for awhile, so how agile can you be, and how can you create an organization that’s agile?”
The answer depends on who companies have in their organizations, and the “who” is at the top of C-Suite leaders’ concerns in 2018.
Attracting and Retaining Talent
Number one among the C-Suite’s “Hot Button Issues” is “the failure to attract and retain top talent.” Considering the current climate for recruiting, Ray observes that compensation is not the only motivator for candidates. “There are some lines of thought and quite a bit of research that would articulate that money is table stakes,” she says. So beyond compensation, “the other question is which culture do you want, what kinds of projects are more ideal?” Speaking of her work at The Conference Board, Ray says, “We did some research on what kinds of things attract talent, and it depends on where you are in your life stage. It’s not going to be your boss, because when you met during the interview stage, everyone was on their best behavior. So it’s about location, it’s about the job, and it’s about the brand reputation of the company.”
Brand management plays an increasingly important role in recruiting and retaining talent. “Technology cuts both ways,” Ray says. “You can go to Glassdoor [worldwide database of company reviews] and suddenly have all this inside information on what it’s like somewhere, the environment, and whether it’s worth it to work there.” Also, when people consider joining an organization they are looking at the top of the house. “Do I see people who are beginning to look like me, or have an appreciation for who I am or what I bring to the table?”
In the current market for talent, skills and those who possess them are portable. Speaking of the top end of the Millennial generation, Ray says “these are really smart young people moving into increasingly more complex leadership roles. They know that all they really have is a portfolio of portable skills and if they don’t feel they’re moving fast enough, or they don’t like the direction the company is moving in, they are going to take their skill set down the road.” She adds, “We’ve helped that happen because they no longer have to give up their pension, so there’s really not a lot that’s going to keep them there.”
So how can an organization retain top talent? “We know that trust and integrity among senior leadership is always key; nothing destroys trust faster than leaders who say one thing and do another, and trust has a significant impact on retention and engagement,” Ray says. “But continual development is usually second or third most desired element in every piece of research. The desire for continued development is very strong, particularly among Millennials.”
Building organizations that are agile and can adapt, according to the report, “requires organizations to rethink how they recruit and develop talent and to embrace new ways of working.” Development at all levels of the organization is a focus of global business leaders, and strong development opportunities are essential both for retaining ambitious employees and making sure that companies have people with the skillset they need to remain competitive. But training and development isn’t the only option for employers seeking special skills.
According to Ray, “Companies know they need a certain talent, so it’s now a build-or-buy situation. And if you need the skills very quickly, you’ve got to go out and buy them in the marketplace, whatever that looks like.”
While the CEOs surveyed have a focus on performance management, training and development, leaders are also considering a new employment model. According to the report, only 41% of CHROs agreed that their workforce would be “predominantly comprised of traditional, full-time employees” and more than 79% agreed that the “percentage of directly hired contingent workers and freelancers will increase.”
According to the report, both CEOs and CHROs are thinking about the possible impact on engagement for both traditional and non-traditional employees, as well. Ray explains, “Let’s assume for a moment that half of your employees are full time employees. Traditionally, they’ve got skin in the game, they’ve been in it a long time. Then you have these contractors who come in, sitting right next to them, some similarly badged, but not always invited to the office parties, and certainly not tapped for the employee engagement survey. They’re not getting any of the benefits that are still resident in the organization, but they are important to the mission and the project deadline, and they know full-well they can walk fairly easily.”