Today’s CEOs don’t just lead companies. They lead ecosystems.

It wasn’t that long ago that a CEO was considered effective if he could keep the board happy, appease shareholders, and avoid major reputational issues.

It’s not like that.

The job description for today’s CEO is collaborating, with nearly every segment of society – employees, customers, suppliers, governments, and activists – registering their expectations and demands.

Today’s challenges, from the pandemic to ESG and ongoing efforts to address racial inequality, have only knit business and society more closely together. In fact, 86% of CEOs and board members see business and society as increasingly interconnected, and two-thirds of the American public want CEOs to take a stand on social issues.

To better understand the implications of this change, our firm, Korn Ferry, spoke with 105 directors, many of whom are also CEOs, from 311 North American companies in 11 industries.

Our research shows that as CEOs’ job descriptions change, so does the playbook for successful leadership. The stakeholder landscape is much larger and more bumpy, which means there is more room for mistakes and missteps. What was once out of reach is now in reach, forcing difficult decisions about who and what to prioritize. And the skills required to succeed extend beyond traditional command-and-control tactics to things like influencing without formal authority.

If CEOs are going to fulfill their new job description, they need to become a different kind of CEO: a business leader who also manages the ecosystem in which their business operates, including customers, suppliers, partners, competitors, governments, and your local community. While few CEOs have fully embraced this role—it’s early enough that very few of us have figured it out—our research shows that these five steps are key to getting started:

1. Meet the players.

The CEOs of the future will need to demonstrate an insatiable appetite for learning like no generation before them.

Just as an ecologist on the Great Barrier Reef would study the interrelationships of birds, corals, fish, and shellfish with each other and with their environment, a CEO must map their ecosystem. Although these organisms compete with each other, they are also interdependent. The same is true for the CEO and the broader ecosystem in which he operates, so he must try to understand:

  • The relative strengths, vulnerabilities, and contributions of each member of the ecosystem
  • Links that make entities dependent on each other
  • How external influences might compromise the ecosystem’s ability to function
  • The extent to which the members of the ecosystem are able to adapt to a changing environment
  • And perhaps most importantly, where there are opportunities for mutual benefit, despite the competition.

CEOs taking on a broader role of leading and herding the ecosystem must unite their various stakeholders around a goal that is advantageous to each player individually, as well as the ecosystem as a whole. It could be a shared interest or a shared pain point, but increasingly, it’s a shared purpose, with companies wanting to establish mission-driven partnerships that advance business goals while serving the greater good.

Consider, for example, the Valuable 500, a coalition of 500 CEOs who are innovating for disability inclusion in the workplace, or OneTen, which brings together CEOs with the common goal of advancing one million Black people. who don’t have four-year degrees in livelihood careers in the next 10 years.

2. Train your top leaders.

Time spent influencing the business ecosystem means time away from running the business. If CEOs are going to go beyond their traditional competencies, they need a team that can take on bigger roles: seasoned talent that has been groomed not just to lead their roles but also to be business leaders.

Many CEOs have already gotten better at building a network of empowered leaders, a necessity during Covid, when the pace and volume of change required faster-than-ever decision-making. Our research shows that companies would do well to formalize these distributed models. The most effective CEOs focus primarily on inspiring a sense of direction that unleashes collective energy and shared purpose throughout the organization, rather than getting involved in day-to-day business.

While CEOs will remain accountable, they must become first among equals, empowering their senior leaders to see themselves as partners, surrogates and successors who can stand on their own feet with investors, board members and employees . This is the kind of talent that will give a CEO the time and space to rise above the ground and design business and ecosystem strategy.

3. Cultivate an entrepreneurial mindset and ecosystem skill set.

This requires CEOs to consider not only the success of their company, but also how they can help design a healthy network in which their business and society at large can thrive.

This mindset and combined skills emerged for many CEOs at the height of Covid. Consider how some of New York City’s most elite hotels offered free rooms to local health care first responders. While it was the right thing to do, it was also an ecosystem decision: unless healthcare professionals were rested and healthy, covid patients would not receive treatment. And unless Covid patients can be treated and vaccinated, people will continue to stay home. With people afraid to travel, the hotel industry would continue to suffer. In this way, opening hotels to health workers was a decision with two results, which benefited not only the companies, but also the entire hotel ecosystem and the communities in general.

Similarly, an ecosystem skill set enables CEOs to act beyond their typical sphere of influence to build networks that serve both companies and society at large. Specifically, CEOs today must focus on developing four core skills:

  • The ability to be emotionally intelligent, even radically human, demonstrating curiosity, openness, and vulnerability, and responding to others with genuine interest and empathy.
  • The ability to balance the needs of stakeholders, looking for opportunities to generate shared value and convert competitors into collaborators. Think of Tim Cook (Apple) and Sundar Pichai (Google) partnering on Covid contact tracing technology in early 2020 as a means to help save lives.
  • The ability to lead through influence with little or no formal authority, relying on reputation and respect of peers, mastery of the ecosystem landscape, commitment to win-win outcomes, and willingness to compromise when not possible .
  • The ability to take on a public persona and respond to a much larger group of stakeholders. This requires poise, confidence, ecosystem fluency, and, frankly, tough skin.

4. Build the infrastructure.

While companies are built from the ground up to enable collaboration toward an end goal, ecosystems are often disconnected, made up of discrete parts, often loosely organized, and without formal governance.

CEOs and non-corporate leaders are teaming up to fill the void with a superlayer that sits above individual entities and helps coordinate, if not govern, the efforts of an ecosystem. Industry coalitions, public-private partnerships, and various social movements are emerging that look to CEOs for leadership. Entities such as the CEO Water Resilience Coalition, the Global Food Safety Initiative, and the Network for Greening the Financial System reflect a desire to impose structure on ecosystem change efforts.

CEO Action for Diversity & Inclusion is an example of an ecosystem effort that has benefited from being formally organized. The forum was founded “on the shared belief that diversity, equity, and inclusion are a social issue, not a competitive one, and that bold action and collaboration from the business community, especially CEOs, is vital to advancing the change to scale. Specifically, CEO Action benefits from:

  • A committed network of CEOs, including those from highly visible and influential companies.
  • The opportunity for people to pledge their support and a growing list of signatories.
  • Both forum-sponsored and company-led efforts that further the forum’s agenda.
  • Workshops, tools and resources that enable like-minded people to get involved
  • Collaboration between local businesses and organizations, NGOs and government legislators
  • A platform that allows members to take action and openly share successes and challenges with each other.

The coalition believes that it is the public sharing of valuable and meaningful actions that helps translate the achievement of member diversity, equity, and inclusion goals faster than they would have without the shared purpose, commitments, and platform. .

5. Anticipate risk.

CEOs who choose to accept the call to action from stakeholders beyond the four walls of their businesses do so at some risk.

They are entering new or unknown territory. They may sign up to address controversial ecosystem issues for which there are no easy answers. They may have to deal with investors who pay lip service to social responsibility but have little patience to sacrifice short-term gains for long-term value creation.

Almost everyone is signing up to navigate a messy set of social and political interests with the potential to disappoint and even alienate some stakeholders. And there is always the risk of taking on so much between the home front and the ecosystem that CEOs generate a lot of activity but little impact.

To mitigate these risks, CEOs need to consider what waters of the ecosystem they wade into. Working in consultation with the board, industry experts, trusted advisors and colleagues from other organizations, they must decide where their efforts will be most rewarded. They must maintain open and frequent dialogue with stakeholder groups, and even with a trusted senior team of business leaders, they must not stray too far from their day jobs.

While the risks are real, so is the upside potential. CEOs can benefit from the positive public sentiment stemming from their efforts; attracting customers and employees who support a multi-stakeholder approach; deeper and more productive relationships with communities, governments and social institutions; and innovative solutions that can only come from diverse coalitions working cooperatively.

In today’s world, the most effective CEOs recognize that no one is an island: no CEO, no company, no industry, no country. The lines have been permanently blurred, and CEOs must seize the opportunity to help shape our shared future, as business leaders moving beyond, to influence entire ecosystems.

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