March 16, 2021 5 min read
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In 2012, a joint research team from Columbia University, MIT, and Harvard published an article entitled “Who Lives in the C-Suite?” In the article, the authors came across statistics that the average number of managers reporting directly to a CEO has doubled in about 20 years. Even though this paper was published nine years ago, the results are still extremely relevant. A CEO who had five managers reporting company-wide activities in the 1980s had ten in the 2000s, most of whom ran their own department reporting on some aspect of the business. Business strategies changed as companies stepped into the digital age and organizational strategies followed.
The increase in information technology has been accompanied by an increase in the number of functional managers as opposed to general managers. On the surface, this appears to be a beneficial development, and vertically layered operations certainly offer advantages. However, and this is a major problem, it is also fraught with challenges. Analysis, reporting, and decision-making are necessarily collaborative, not independent, processes. Silos not only become counterproductive, they also become vectors for critical errors.
Here’s the problem: These complex problems cannot be solved simply because the pace at which technology affects people strategy is only accelerating. And as companies try to figure out how to meet these challenges, the challenges themselves keep getting bigger.
Here’s how you can adapt your company to the digital age:
Visualize the change
Before the changes brought about by the digital age, most companies communicated through a system of aqueduct-like channels through which information flowed. With the advent of modern IT – and later the Internet of Things – these channels became information networks. Now companies communicate in dozens of directions simultaneously, much like the human brain. In the digital age, data and knowledge don’t just go up and down, they go continuously.
To accommodate change, companies have changed their expectations of leaders and, consequently, of those who are hired in the first place. Organizations now prefer digital language skills and teamwork combined with basic business fundamentals over extensive experience and expertise.
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Identify the weakness
If you think the change was easy, simple, and ubiquitous, you are wrong. Look at a 2018 Deloitte study that found 73 percent of respondents said leaders in their organization do not work together on a regular basis. However, 85 percent of respondents in the same study preferred a team-based, multidisciplinary approach at the executive level – a concept the authors referred to as the “symphonic C-suite”.
Obviously, business leaders see digitization and social entrepreneurship as a way to meet the greatest challenges of the era, but for the most part they still struggle to execute. Put simply, there is a gap between what companies strive for and what they achieve.
Implement the idea
The good news? Change is possible.
My own company expanded the C-Suite from a traditional structure to include a Chief Productivity Officer, a Chief Software Architect and a Chief Customer Officer. But instead of creating silos based on our functional areas, we have set up biweekly meetings of the Executive Committee. When we meet, we review and discuss all strategic and operational issues. Everyone has a voice and they are expected to challenge each other regardless of whether the problem falls within their functional expertise or not.
If this format sounds awkward, it’s because it is.
Nobody wants their expertise to be challenged by someone who has little experience in the area under discussion. However, the insights and challenges of this multi-faceted team have often led to better – or at least better thought-out – decisions. We achieved significantly better communication across the company as the entire C-suite is informed not only about what we are doing, but also why we chose a particular approach. This has resulted in a shared commitment to the business results we seek, such as sales and profits.
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The bright side
For companies learning to deal with these complexities effectively, the benefits are enormous. The same Deloitte study indicated that companies whose executives often work together – whose C-Symphony takes the test seriously, you might say – are 33 percent more likely to experience substantial growth than their more isolated counterparts.
For executives thinking about adapting their C-Suite to the digital age, this is the bottom line: Digital systems and changes to the C-Suite are big problems that need to be overcome, but which are worth addressing. Because wherever there are challenges, there is also the opportunity to connect more closely with markets, customers and employees. In other words, anything a company wants.
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