The offices have changed, the customers have changed, the lifestyle requirements have changed and the technology has changed, so what of the C-Suite? How has that changed amidst the rise of the Gig Economy, and how can a new way of operating at board level be used to adapt business models to those that will continue to thrive in an ever evolving environment?
“As we move from the “Fordist” era of mass production into the entrepreneurial age, the future of the social compact in developed economies depends on rethinking the role and nature of many institutions,” commented the Financial Times. The article in question took by way of example the changing requirements of welfare and how new ways of working could redefine the perimeters of assessing and managing risk. In short, it’s not just businesses that are changing, it’s whole industries.
What did the old C-Suite look like?
The traditional C-Suite was a product of the big companies, bigger spend, Mad Men glamour model that we have previously talked about. Big glass offices and bigger pay cheques, a longstanding commitment to industry that resulted in a seat at the biggest table in the tallest office.
Twenty years ago the tenure of a board level employee may have been as long as a decade, and to an extent this is still a model that remains in some well established companies that dominate the FTSE 100/250 or the Dow Jones 30, those which are arguably the most stable courtesy of their long term positioning. However, things have changed and are continuing to change, new businesses are joining the market and fast, and with them there’s a change in the boardroom. In fact, the interim Management Association (IMA) reported that the use of interim workers at a senior level increased 93% between 2006 and 2016 with indications implying that those numbers are set to increase, citing it as “a growing market… reportedly worth £2 Billion.”
What’s new in the C-Suite?
Today we find that the average tenure of C-Suite executives is rapidly falling. For example, the Wall Street Journal reported in March 2017 that the duration of the roles in America’s biggest brands had continued to fall for another consecutive year: “a study of CMOs from 100 of the top U.S. ad spenders found that the average tenure for marketing czars fell to 42 months in 2016, down from 44 months in 2015.”
Greg Welch, a consultant in executive search firm Spencer Stuart cited “tough business headwinds, new technologies and pressures to change quickly” as instrumental in the many reasons for the churn.
It is in the role of the CMO in particular that this level of change is particularly high compared to the longer average tenure of CFOs and CEOs for example, largely due to the exceptionally high pressures to produce results in a short space of time. However, across the spectrum of C-Suite roles, the average tenure was 5.3 years according to research from Korn Ferry.
Why the change?
Well, there are the points we have already covered – the changing technologies, lifestyles and economy in which we are all functioning, which have lead to new opportunities and the chance to think differently about the way we work. Those changes apply to all sizes of business, and the changing duration of tenure is testament to the way those elements are playing out.
Then there’s crisis management. The C-Suite is under more pressure than ever to show high company performance, and this in itself is a reason for the increasing churn. In 2015 Twitter surprised Silicon Valley and Wall Street when CEO Dick Costolo announced he would be stepping down and installing an interim CEO in the form of co founder Jack Dorsey, due to flat growth that year. Business Insider UK reported, “a company’s decision to put up an interim CEO during a time of crisis is fairly common” and “in the Strategic Management Journal, University of Virginia professors Gary A. Ballinger and Jeremy J. Marcel found that about 17% of CEO successions of public companies install an interim CEO for 45 days or more before settling on a permanent one.”
Meanwhile there has also been a huge rise in entrepreneurship, and this has a different reason for utilising gig workers at C-Suite level. Developments in technology, financing and corporate culture have lead to a rise in the power and leverage of small companies. Unlike their larger counterparts, they tend to be more agile and adept at using the available resources we have previously spoken about – hubs, cloud based working, and a less physical presence and they have different requirements of their senior executives because they have very specific targets for different growth phases. As Fortune puts it: “empowered entrepreneurs can adapt and execute fast, expanding nimbly at co-working spaces and benefiting from the increasing pool of flexible talent.”
For these fast growing businesses the C-Suite requirements lie in he need for guidance. While technological and innovative thinking may be in hand with younger members of the team, it is the requirement of senior executives to guide that talent into greater profit and growth.
“We know that different times and different circumstances call for different leadership skills” commented the Harvard Business Review, continuing: “once people reach the C-suite, technical and functional expertise matters less than leadership skills and a strong grasp of business fundamentals.” The statement came from an examination of executive profiles developed over the past decade by the executive search firm Heidrick & Struggles. The requirement, it seems, is short term advisory roles at C-Suite level, thus lending itself to a selection of gig style board members with targeted remits for different phases, rather than permanent senior members of the team.
What companies can take from this knowledge
What we’re seeing emerge is an opportunity to rethink business models with a view to future proofing companies of all sizes. Big corporations are starting to look at the options that are proving to have great benefit in a rapidly growing a new generation of businesses, and see what can be learned from them.
These are questions that apply to all businesses – what technologies are available to you? How is your business and the demographic of your clients changing? What function are particular roles performing in your company? Where is your business now? Where do you want it to go? How, or perhaps more accurately, who, is going to get you there? And when you’ve asked all those questions consider – is it one team that’s going to be able to meet all those requirements, or could a composition of gig C-Suite executives with different experiences and knowledge be more a more powerful resource for the things you want to achieve?
- Younger companies are adopting policies of bringing in short term C-Suite executives to navigate particular growth phases and help meet specific targets. Consider the benefits of a senior member of staff joining your team on a gig basis to help drive your company forwards at particular times.
- Consider the position of some of Silicon Valley’s most successful businesses – adapting quickly and flexibly with the help of shared office spaces and a pool of talent from which to draw on when needed.
- Consider what you want to achieve within your organisation and the function you need particular roles to perform within that to ascertain whether a gig approach might be the most productive.
©gigCMO First published April 2018
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