Career Development


10 Key Challenges for CEOs in 2011 “L


eading a company now demands that the chief executive officer take on the mantle of Chief Diplomat,


Chief Talent Officer, and Chief Image Manager, in addition to his or her more traditional responsibilities,” says Stephen A. Miles, Vice Chairman of Heidrick & Struggles and head of the firm’s Leader- ship Advisory Services. “CEOs will encounter a wealth of new challenges in 2011, further complicating a role that has become more highly scruti- nized over the past two years than ever before. The impact of the financial crisis combined with the new requirements for conducting business on a global scale have transformed the office of CEO. To- day’s challenges require someone who can demonstrate a much broader and more strategic perspective than in the past.”


10 Key Challenges


for 2011 Mr. Miles sees ten major challenges for CEOs in 2011:


1. Moving from “business case” to “social business


case” “As companies weigh decisions such


as entering a new market or embarking on a multi-jurisdictional acquisition, the ‘business case’ must now be viewed through a new lens: how will this business decision impact the country/region/state/ province they are going into? It is no lon- ger enough for companies to simply make a good business case or meet the ‘legal re- quirements’; they must make the case to the local stakeholders that this move will benefit the target community, who may have concerns about, for instance, the en- vironmental impact. On the flip side, the transformation of developing local econo- mies due to a major corporate presence can then affect the original business case: new unionization and increasing wealth may impact the decision as to whether to grow operations in the area or call into question whether the original business case was a sound one.”


44 2. Stepping into the role of


“ambassador” “Related to the development above, we


are seeing that the CEO must actively en- gage with politicians and regulators around the world. The CEO must be con- versant on policy – be it financial regula- tion or healthcare reform – that affects his or her company and industry. Policy mak- ers or regulators do not want to speak with delegates, but to the CEO. Given this, the CEO must act as diplomat and build these relationships him- or herself. Only unusu- ally qualified delegates – such as a former top politician who still carries much influ- ence – can effectively step into this role and supplement the CEO.”


3. Repairing the corporate


image problem “One of the many lasting legacies of


the financial crisis will be the image of corporations around the world as ‘bad,’ a view that politicians and shareholder ac- tivists have taken hold of with develop- ments such as the Dodd-Frank Act. In this environment, CEOs in all industries – not just financial services – must work assidu- ously to repair their reputations among the media, regulators, investors, and the pub- lic at large. One way of doing this is through earnest CSR. Taking corporate social responsibility seriously not only helps to balance out the negative press, but also jibes in particular with the priori- ties of today’s younger employees – an- other important constituent that compa- nies must consider. CEOs must do this without losing focus on their corporate strategy and mission.”


4. Making the board an ally “With first Sarbanes-Oxley and then


the global financial crisis, corporate boards have stepped in to become more ‘executive,’ instilling themselves further into the role of scrutinizing and interro- gating management. The CEO must build a strong relationship with these key stake- holders and bring them on a ‘journey’


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against his/her (or their) desired initia- tives, operating with transparency. If you treat the board as your enemy, you will get the enemy you deserve! Conversely, treat- ing the board as a partner along a strategic path will only help your cause.”


5. Building a global leadership


pipeline “It is incumbent upon every CEO to


ensure that he or she has a robust and ‘global’ pipeline of talent throughout the organization, especially at the senior-most levels, and that multi-year succession is regularly discussed at the management and board levels. It is critical that invest- ment in these programs is a priority re- gardless of the economic cycle – they can- not be ‘fair weather’ programs. As the recent survey that Heidrick & Struggles conducted with Stanford’s Rock Center found, 51% of companies cannot name a CEO immediately if needed, and 39% have no internal candidates whatsoever. To that end, it is important that CEOs en- courage their boards to recruit directors with succession expertise and experience, and to help make the all-important issue of succession a top corporate priority.”


6. Grappling with China “If their company isn’t there already,


almost every CEO is eyeing China – ei- ther as a consumer market or supply chain base. But partnerships there can carry much risk. As the joint venture partners in China begin to learn and then take over the technological developments and pro- cesses introduced by their Western part- ners, these Western companies may be uninvited to the party. Chinese compa- nies, supported by their government, are aggressively acquiring intellectual prop- erty, and are increasingly looking to go it alone in competing on the world stage. CEOs must thus be aware that they may be creating competitors if they enter into a JV in China – and manage this risk ac- cordingly.”


The Black E.O.E. Journal


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