The only thing predictable about future is that it is unpredictable!
The rate at which business processes are changing driven by developments in the technology, make it impossible for even astrologers to risk a guess at the kind of challenges we will be facing in just 5 years from now. The best one can do is to use available data and try an extrapolation.
THE BREAK UP OF LEADERSHIP EDIFICE!
Here are some “before” and “after” scenes we watched on the corporate bollywood!
Before: “Vishal brings valuable experience as a leader of a large, global corporation. His illustrious track record and value system make him an ideal choice to lead Infosys,” said co-founder and former CEO NR Narayana Murthy in 2014.
After: Come Aug 18th, 2017 and Infosys CEO and managing director Vishal Sikka puts in his papers. No, he was not unwell or asked by family to hang his boots. In an open letter Sikka made no secret of what was going on behind the scenes. “Over the last many months and quarters, we have all been besieged by false, baseless, malicious and increasingly personal attacks. Allegations that have been repeatedly proven false and baseless by multiple, independent investigations. But despite this, the attacks continue, and worse still, amplified by the very people from whom we all expected the most steadfast support. Therefore, I have come to this moment and the end of this journey.
Just a month after the monsoon 2016 was over in Mumbai, on October 25th, Cyrus Mistry, then the chairman of the Tata group, was ousted after a board meeting in Bombay House. Within two weeks the unceremonious sacking was attributed to Mistry’s apparent non-performance and his “devious moves” to wrest control of group companies.
Wait I have one more case and this could be juicier. The Top 10 Upcoming Business Leaders in (Forbes’ 2014) featuring India’s top 10 upcoming business leaders included among others Nirav Modi. The report said that with some of India’s richest people as his clients, Modi’s net worth stood at US$ 1.5 billion in 2014. I won’t waste your time guessing where Mr. Modi (not related to the PM Modi) is as of now.
Up until last year I would always quote Ms. Chanda Kochhar as a towering example of women in leadership. She is the CEO and MD of the ICICI Bank since May 2009. A regular feature of the “Most Powerful Women in Business” list brought out by Fortune Magazine. She was “World’s 100 Most Powerful Women List” of Forbes during 2009.
Pending investigations by agencies, I am currently looking for other examples.
WHAT’S MY POINT
All the above examples are not to judge or criticize either side but to give you a flavor of how things can change swiftly in the leadership space.
What is true today may not continue to be true tomorrow – just as what was true yesterday, is history today. There are a number of things that will change and each will have its impact on you as a leader and unless you adapt yourself to the change – you could become just another statistic. While the challenges posed by the change will be more than we can count, here the five areas that I imagine will impact the leadership in coming years.
Five Big challenges I see that will face the leadership
1- Skill Gap Crisis
In his article dated 31 Jul 2017 Stephane Kasriel says “The days of working for 40 years at one job and retiring with a good pension are gone. Now the average time in a single job is 4.2 years, according to the US. Bureau of Labor Statistics. What’s more, 35% of the skills that workers need — regardless of industry — will have changed by 2020. That rapid pace of change in jobs and skills means there’s a growing demand to update skills as well. According to a new report on workforce re-skilling by the World Economic Forum, one in four adults reported a mismatch between the skills they have and the skills they need for their current job.”
Stephane is the co-chair of the World Economic Forum’s Global Future Council on Education, Gender and Work.
In my opinion, this will impact the leadership in two ways.
- For one it could make chunks of employees redundant, posing major HR issues for the leadership. You can’t fire them and you can’t keep them. Up skilling is the only option but that’s not always cheap and will take time and effort.
- Again, this skill gap will impact the CEO himself. Much as he may think that sitting behind a chauffeur reading financial papers on the ride home, will keep him updated and current, the twenty something kid who is AI ready will challenge you and perhaps actually do a better job than you can. Some people jokingly say that the CEO in 2030 will be a robot with built in AI. Today it may sound like a joke – tomorrow it won’t.
No amount of imported executive coaches are going to help you – pull your socks up, get upskilled in tune with the technology and stay current.
2- Falling Age of the CEO
No matter where in the world you are, one thing is definite.
Today’s CEO is expected to deliver in shorter period of time than say 10 years back. High performance is expected in short time from the word go. Major transformations will be expected in a short span of time and the clock of assessment will start clicking from the first week.
The average age at which people have made phenomenal changes in the organizations has fallen in past 15 years. Today if you are above 45 and not yet a CEO, chances of occupying that seat have almost evaporated, unless you o something spectacular.
The internet is full of stories of under 40 leaders that have out smarted and out done those over 40 and the fact is that expectations around you will not be lowered making it imperative for you to increasing effectiveness and do it faster!
3- Rebellion Wage Disparity
Over the past two decades, the salaries of the leadership team have grown much higher in proportion to that of the average staff pay hikes. In the US, according to the Economic Policy Institute (EPI), these have risen almost 1,000 percent compared to a rise in worker salaries of roughly 11 percent over the same time period.
With the information systems becoming as transparent as they are today, there will be hardly anything which anyone will not know. The traditional wall between the leadership and those led will disappear faster than the leadership will know.
The gap between the large sums that CEOs take home versus average employee pay is taking on added importance in 2018, as public companies in the United States are mandated for the first time to disclose pay ratios between the CEO and employees.
“When you hear the amount that a CEO makes, it is going to seem outrageous. People are going to react with passion,” says Ethan Rouen of Harvard Business School.
This ratio is more or less the same in developing countries and quick access to more information will make things more transparent. The present team members will become more and more aware of this disparity and they will revolt. These days revolting with banners and slogans has gone out of fashion. They will resort to social media – and that could do more damage than stone pelting.
Leadership will have to constantly monitor and control this ratio or face flak making it difficult for your to perform.
4- Cyber Security
Technologies like IoT, blockchain, artificial intelligence (AI) and robotic process automation (RPA) are increasingly converging under a single digital disruption umbrella. The EY IoT Competence Center anticipates that in 2018, suppliers will move toward full integration of IT systems supporting business processes and automation solutions.
Most of us dread cancer but always hide behind a hope that it will happen to the other person. Same is with Cyber security threat.
Dotan Bar Noy puts it very beautifully when he says “Everyone is a threat. No one can say that they’re not a target, no matter the size of the company. If you have a business and it generates money, then that means you have something of value for the attackers.”
Forward thinking organizations have increased their cybersecurity budgets. J.P. Morgan Chase & Co. doubled its annual cybersecurity budget from $250 million to $500 million.
As a CEO if you are not aware and responsive to the need of Cyber security – you will be putting the organization and thereby yourself at high risk.
5- Work from Home management
This may surprise some of you but I have a strong belief that this will be a big challenge with the leadership. This challenge, unsurprisingly, came up often among CEOs and business experts, as the number of remote employees and contractors is increasing.
“With the ever increasing trend toward telecommuting, virtual meetings and hiring contractors over employees, today’s CEO needs to know how to manage the changing workspace,” says Amy Walker, “There are many perks to increasing flexible work options in a company and CEOs will need to make sure management is trained on how to manage virtual team members.”
This will be more predominant in densely populated countries like India / China where the ‘work from home’ will become a necessity more than a luxury or comfort. Imagine a set of twenty staff members working at 10 different places and the only time you get to see them may not even on the pay day since salaries are already getting auto credited to employees.
WHAT’S THE BEST WAY FORWARD?
The best possible example today is D-Mart’s Noronha. In 2004. As a young boy in his 20s with an MBA from the NMIMS, Mumbai, was working as a young executive in Hindustan Unilever, when his business acumen impressed stock market investor Radhakishan Damani, who took him as the head of business in his D-Mart. He got promoted as CEO in 2007 and MD & CEO in 2011. The much hyped CEOs in the corporate world will find difficult to digest is that he attends conferences and seminars as a participant and not as a speaker. The only time he addressed the media was at the time of the IPO in 2017. Today his meager 2.2% stake in Avenue Supermarts, is valued at around Rs. 2000 Crore [roughly $330mn] but his office continues to be the chain’s Powai office which is one fourth the size of that of any retail CEO.
The CEO of today has to stay current, stay updated and stay young!
Author –Ravinder Bhan is CEO & Founder of “The Powerful Solutions” UAE & India. Prior to this, Ravinder was Director Operations at Schneider Electric in the Middle East. He has also worked for several companies like Crompton Greaves, Larsen & Toubro, GE, Jyoti Ltd,. in India and Voltamp Energy in Oman. He is one of the most sought after key note speakers at various national and international events concerning the SME sectors and works closely with several SMEs to help their transformation and migration to the next higher level. www.tpsworldlearning.com