January 12, 2018
CES 2018: Managing Culture and Other Key Leadership To-Dos
By
Spencer Stuart's Global CES Team
Over the past few years, the Consumer Electronics Show (CES) has become less about the “what” and more about the “how.” While gadgets like virtual personal assistants still grab attention, many of the discussions we had with a varied group of senior executives — spanning digital and marketing experts and technology, media, healthcare, automotive and consumer leaders — at our exclusive reception at CES 2018 focused more heavily on the technologies driving these innovations and what they mean for their organizations. As digital continues to change how we all work and live, here are five key trends and issues leaders should be thinking about.
1. There’s one non-technology issue all companies need to care about in a digital world: culture.
In a rapidly changing environment where organizations need to be agile, cultures that encourage learning and innovation become more important. The good news is that it is possible to manage culture and improve organizational performance through culture change. Our research, newly published in Harvard Business Review, demonstrates that culture drives business performance when it is aligned with strategy and the business environment. The first step is understanding your organization’s culture today and whether it supports the business strategy: Is the organization more focused on maintaining stability and consistency or is it flexible and adaptable? Do people place more value collaboration and shared success or individual achievement? How do these preferences support or get in the way of the organization’s ability to accomplish strategic goals?
Our framework for assessing culture
As we discussed with leaders at CES, recent merger activity in tech and other sectors underscores the critical role of culture. Studies have shown that cultural dynamics are one of the greatest determinants of integration success. Additionally, as every industry becomes digital, the gold rush on technical and transformative talent will only intensify. Culture can be a deciding factor for sought-after candidates.
2. While there’s been progress, more must be done to promote women in the tech industry and beyond.
In 2017, more than one-third of new U.S. tech board directors were women, a 65 percent rise over the last three years. This is welcome progress, but many attendees pointed to the shortage of female executive speakers on the CES agenda as evidence that more needs to be done. Organizations that prioritize gender diversity commit at the C-level. They also remove unconscious bias by using a structured approach to assess candidates versus relying on subjective qualities like “presence” and rely on data — not assumptions — to evaluate culture fit. (Read more about what companies and women can do to help close the gender gap.)
Organizations that don’t commit to improving gender diversity not only risk losing out on a vast talent pool, but profits: According to McKinsey’s research, companies in the top quartile for gender diversity were 15 percent more likely to have financial returns above their respective national industry medians.
3. Digital health is the next frontier.
Sessions like “Please Disrupt the Doctor,” “Predictive Analytics and Software as a Medical Device” and “Total Domination: Consumer and Patient-Centered Healthcare” indicate accelerated digital transformation in the healthcare industry. Much like ride-sharing shook up the conventional taxi industry and Amazon continues to revolutionize retail, the healthcare industry is poised to leverage digital technologies to provide a more user-friendly experience for patients. Multichannel connectivity with the patient is opening new lines of communication for sustained consumer engagement. That’s why senior executives who are proven innovators, especially in disruptive industries, are highly valued today.
Equally prized are problem solvers who are gifted at change leadership, have an open mind and the ability to translate data into actionable insights that improve patient outcomes and help control spiraling healthcare costs. From inside and outside of the industry, the most sought-after leaders are those adept at driving innovation, leading change and adapting to organizational culture. (Learn more about how healthcare leaders are succeeding in an increasingly digital world.)
4. Artificial intelligence and connectivity have nearly every organization asking, “Are we vigilant enough about cybersecurity?”
AI-driven home assistants, brain-to-vehicle technology, smart cities: Amazing advancements with the potential for catastrophe if data enters the wrong hands (See: last year’s massive U.S. credit bureau breach). As a result, cybersecurity talent is in high demand at the executive and board level. According to our survey of S&P 500 corporate secretaries, general counsels and chief governance officers, demand for cybersecurity experts on the board rose to 23% from 19% last year. It’s likely we’ll see more organizations install chief information security officers to manage an ever-growing number of threats. At the same time, cybersecurity is not just one person’s job: CEOs and boards also need to become more educated on the issue and set the tone from the top.
5. Partnerships and cross-pollination of talent will become the norm.
There was clear recognition this year that no one can do it alone, especially when the talent is limited. Partnerships have become the commonplace: Toyota announced a collaboration with Amazon’s Alexa. Amazon’s Alexa will partner with electric vehicle company Byton as well as Panasonic and consumer electronics manufacturer Anker. As more of these ecosystems are created, we could see the roles of the chief strategy officer and head of alliances/partnerships merging.
In addition, more tech companies are bringing on “best athletes” and looking outside the typical talent profiles. With the need to help customers understand how various advancements add value to their lives, tech companies may find themselves looking to top retailers and CPG companies for proven consumer-centric marketing executives. To drive innovation, some are turning to some unexpected sources for talent, such as 3-D printing players bringing on leaders with material science and biomechanical backgrounds. The big question for tech companies and others bringing in talent from outside their industries will be: How do we know this person will succeed here? Rigorous assessments can help predict how well an executive will fit and perform in a new context. A thorough onboarding process becomes especially critical when bringing on someone from outside the industry.