Leadership Matters

Perspectives on the key issues impacting senior leaders and their organizations
January 9, 2020

Lessons from CES 2020: Adapt and Adjust to Thrive in the Next Decade

By Spencer Stuart's Global CES Team

As exciting as it is to see flying surfboards, transparent TVs and security robots, the Consumer Electronics Show (CES) is about much more than electronics. CES 2020 is a microcosm of the broader landscape — the consumer has taken center stage, the conversation around the societal impact of innovation (i.e., what it means for personal privacy and the environment) has been amplified, and sectors and geographies that were previously under-represented have taken a seat at the digital table. We’re focused on the ripple effect of these forces on leadership, talent and organizational culture. We have the added advantage of a distinguished sounding board of senior executives attending the annual Spencer Stuart reception, an exclusive gathering of leaders from some of the most influential companies in technology, media, consumer, digital, healthcare, automotive, industrial, professional services and private equity. Which trends may have the biggest impact on senior leaders and their organizations as we enter a new decade? Here’s our take on six key issues.

1. New digital tools and channels for consumers are transforming ecosystems and impacting leadership roles.
The last time you purchased clothes, did you walk into a store or did you get them shipped directly to your home? Did you call a cab to get to the airport or use a ride-sharing app on your phone? Did you manually turn down your thermostat or ask Alexa to do it? Services and “ambient computing” (e.g., voice assistants and smart home technology) had a strong presence at CES and empowered consumers are the driving force. Companies across industries are responding to the growing demand for “anywhere, anytime” access, whether it’s meal delivery or a medical check-up. 

The “Digital Hollywood” track, in particular, speaks to the intense competition for consumers who have almost infinite choices and an expectation of convenience. Increased personalization of programming, the rise of influencer marketing and more sophisticated virtual/augmented reality experiences are blurring the lines between sectors. We expect to see even more cross-pollination of talent among consumer, diversified media, streaming services, telecom and other players to address these shifting dynamics. We also see new roles emerging and evolving, from the performance marketer who is a master of personalization to the corporate development leader who can drive growth and forge new business models. (Learn more about the changing media landscape here.) 

Spencer Stuart CES 2020 Reception
Leaders from across industries at our exclusive reception at CES 2020.

2. Connectivity isn’t only about consumers. Merger activity will grow.

In addition to the numerous new entrants at CES, automakers, industrial giants and infrastructure players showcased their mobility and digital transformation solutions. As more sectors try to capitalize on connectivity, we anticipate more mergers and acquisitions to help fund innovation and competition at scale. 

Despite all of the promise of shared best practices, customer bases and technology, a number of these deals will fail because there will be too little focus on the “people” side of the equation. The risk for failure increases when a target organizational culture is not articulated and the leadership team’s role in modeling that culture is not clearly defined. We recommend tackling tough leadership decisions early and defining how the organizations are alike — and different. Understanding shared values and what each party brings to the table (e.g., a learning-oriented culture) can go a long way in building trust. (Read more lessons learned from successful — and unsuccessful — mergers.) 

3. Privacy is a top priority for consumers and companies as more data is collected online and from ubiquitous devices.
Privacy was front at center at CES 2020 on Day 1. Apple engaged with CES for the first time in 28 years, with its senior director of global privacy participating in a chief privacy officer roundtable alongside executives from Facebook, Procter & Gamble and the FTC. The panel focused on how companies can build privacy at scale, the role of regulation in furthering privacy and consumer concerns. As large tech firms like Amazon, Google and Facebook have come under increased scrutiny over the way they handle consumer data, Apple has staked out a position that views privacy as a fundamental human right. 

High-profile data breaches affecting millions have pulled back the curtain on data aggregation and drawn significant scrutiny from the public. Companies have moved to regain trust by showing how data is collected, used and safeguarded. As we noted previously, the deal that users will provide their data in exchange for free services is up for renegotiation. With a data-driven future, we anticipate more organizations will hire or elevate the role of the chief privacy officer to demonstrate that they take data privacy seriously.

4. More organizations are understanding how sustainability isn’t just good for the world. It’s good for business.  
Sustainability isn’t just the right thing to do – it produces tangible business benefits across the enterprise. Consumers today care as much about how a product is created as its features. In a world where consumers are making a statement with their spending, sustainability is as much a business imperative as it is an environmental one. One session detailed how some companies are responding to these changing preferences by integrating sustainability into innovative product design, demonstrating that it speaks not only to commitment to environmental stewardship, but to supply chain efficiency, smarter energy consumption and more responsible materials management. 

As we laid out in our New CEO Scorecard, the key to turning the concept of sustainability into concrete operational practices across the organization is to embrace it as a core element in your business strategy and organizational culture.

5. Lack of diversity is sparking incremental change.
In response to criticism for perpetuating the lack of diversity in the tech industry last year (it remains to be seen how CES will address related concerns about this year’s keynote speakers), CES 2020 has boosted representation of women and minorities, naming The Female Quotient as official equality partner. New at CES this year is “Innovation for All” programming, which explores chief diversity officer insights, product inclusion and investing in diversity as well as “Faces of Innovation: Entrepreneurs Edition,” a startup program that offers women and underrepresented entrepreneurs free exhibit space. In addition, CEO Action for Diversity & Inclusion’s Check Your Blind Spots multimedia experience helped attendees confront unconscious bias in an interactive way. (Unconscious bias is one of the three main areas where leadership assessment can go wrong. Learn more.)

The benefits of diversity are unquestionable, and as our 2019 U.S. Spencer Stuart Board Index found, S&P 500 boards from across industries are indeed heeding the growing calls from shareholders and other stakeholders for enhanced boardroom diversity of gender, age, race/ethnicity and professional backgrounds. Tech, digital and consumer-savvy directors are in high demand, and boards continue to appoint younger, next-gen directors with these backgrounds. Once again, one out of six directors added to S&P 500 boards were 50 or younger. However, continued low boardroom turnover remains an impediment to meaningful year-over-year change in the overall composition of boards. 

6. Organizations need resilient leaders to build and scale resilient technologies.  
Several conference sessions at CES offered an opportunity to hear from the innovators creating inspiring tech solutions for dealing with adversity as it affects supply chains, communication, cybersecurity and more. These resilient technologies help countries and municipalities improve preparedness, responsiveness and recovery for a more secure world. And resilient technologies require resilient leaders.

Arguably, no leadership position has a greater impact on an organization’s success than the CEO. Yet, very little data exists on how chief executive officers tend to perform over time. We launched the CEO Life Cycle Project to understand the typical course of value creation over the course of a CEO’s tenure. One finding of the research is that high-performing CEOs often achieve their highest value-creating years late in their tenure. These resilient CEOs demonstrated some common practices, including: 

Don’t just execute. Learn.
Manage expectations and over-communicate.
Work toward the future, but don’t develop a blind spot.
Recognize the need for reinvention.

If CES 2020 is any indication, organizations in almost every industry need to prepare for consumers who expect greater transparency (and action) when it comes privacy, diversity and sustainability. Delivering a great product or service will not be enough. For some organizations, this may require them to rethink their approach to data and analytics from both a security and customer insight perspective. Others may need to bring on new leaders with experience in diversity and inclusion, as well as executives with a track record of incorporating sustainability into the strategy. For most, cultural adaptability for individual leaders and the overall organization will not be optional. In the decade ahead, the voice of the consumer will only grow louder. Organizations that can listen and quickly respond will be best positioned to succeed.