By Göran Karlsson, Futurist at Tata Consultancy Services
What does a stereotypical CEO like? Maybe they have a spacious desk on the top floor of a traditional office block, with comfortable spaces, big desks and personal assistants.
Driven by financial targets and protecting existing products they may inadvertently create a risk-averse culture. But this internal focus is causing them to miss the biggest risk of all – failure to adapt to change.
Elsewhere, new entrants to the market, free from the constraints of the usual hierarchical thinking, are using technology to disrupt and potentially destroy established business models.
So how can firms facing this disruption respond? The change must start at the top because inertia is the enemy of any organization.
A false sense of security
It is possible that some members of the C-suite don’t want to change because they are satisfied with their salary and pension package.
But this is an illusion. Technology is redistributing the power traditionally held by those at the top. That power was based on knowledge – but now the knowledge in an organization is distributed by technology, which is changing the way we all work.
Traditional hierarchies are an obstacle to success. To navigate the Business 4.0 landscape, leaders need to shift from being commanders of their organization into coaches of the talented people they employ.
The old command-and-control approach is no longer fit for a world in which only the agile will succeed. Leadership will become ever-more important, but the nature of what it means is being transformed.
Tomorrow’s leaders will listen more than they talk – and they will empower their people to drive innovation.
Beyond the MBA
There also needs to be radical change within the world of executive education.
Some of what leaders traditionally learn at business school can kill innovative thinking. And some aspects of a typical MBA education may even have fostered short-term, balance sheet-oriented thinkers.
The CEO of the future must be prepared to embrace risk if they are to deliver exponential value growth. And they should swap pulling rank for building consensus.
It’s important to recognize a business operates in an ecosystem that comprises players inside and outside the enterprise. Understand this and it will be possible to build those networks by adding new technologies and partners.
Take the music-streaming site Spotify, as an example. The Swedish firm has dismantled its conventional corporate structure to enable agile innovation. In place of formal departments, they have what they call “squads”, small multi-disciplinary teams that each have a specific task within a particular area of the business, or “tribe”.
If you look at how they work in practice, it’s an open landscape environment but typically they create areas around the office where these squads and tribes reside.
Now they know what you know
Technology is the great enabler of these changes, empowering individuals and teams by sharing knowledge that would once have been restricted to the boardroom.
Another good example is customer data which allows the creation of new solutions based on real behaviour and needs.
The role of the CEO is about giving people the confidence to change, helping employees to find their way out of the wanting to keep on doing the same thing, the way it’s always been done.
So the top jobs of the future are going to look very different, and the role of the CEO will change dramatically. I even know one chief executive who sees himself not as a master but as someone who’s there to serve his teams. It’s a radical rethink.
I think it’s highly likely that the businesses and institutions of today will change more in the next 20 years than they have done in the past 300 years.
A traditional inside-out company, that is only focusing on its walled garden, will not stand a chance.
Göran Karlsson is a Futurist with TCS helping leaders to understand the opportunity landscape and best practices around adoption of AI and the “future of work”.