Hail to the chiefs

Peter Allanson highlights the importance of a strong c-suite

For a number of years, there’s been quite an industry growing to support effective board-level executive development and succession planning. Effective leaders are the hallmark of a successful organisation and it is a subject that piques the interest of, amongst others, regulators.

More compelling is the thought that strong leadership in the upper echelons of an organisation is crucial if it is to navigate change successfully. Given how much has changed in the last five years, there can be no doubt that the next five will bring at least as much.

This article considers the role and make-up of the c-suite and thinks about the talent pipeline with the aim of positioning enterprises to face an uncertain and changing future.

C-suite membership

So, what is a c-suite? For the purposes of this briefing, it is the board-level executive directors who have ‘chief’ in their job title.

They are the most senior executives in an organisation and there aren’t many of them. Usually, the list includes at least the chief executive, the chief finance officer and the chief people officer. Other board level executives who may also merit the title – operations, sales, marketing, strategy and IT/digital – the list is potentially long.

One feature of modern businesses is that director portfolios are broad, and it becomes more difficult for a single individual to have the depth of knowledge of all that is within their sphere of responsibility. To get to that level, you should be able to assume the highest level of subject knowledge and professionalism and as you are likely still to be at least the titular leader of a function, your direct reports will be vital to your being successful in your position as a member of the c-suite.

The c-suite’s key role is to support the CEO on business strategies, offering their own insights and contributing to key decisions. Together, the c-suite should develop a shared vision and strategic alignment covering business, strategy, culture and themselves in terms of skills building and adaptability. You should expect to delve into your competences and extend them – CFOs and risk management, workforce directors and cultural astuteness and deployment for example.

A good CEO is usually a first-rate communicator, thinker – both operationally and strategically – and collaborator, knowing when and how to depend on others for functional expertise in particular. This collective leadership should be seen to represent the integrity of the organisation with a reputation for ethical conduct replicated and embraced by the board as a whole – and of course exhibited by members of the c-suite in relation to their own direct reports. In this way the governance system as a whole has a shared ambition and code of behaviour, values, mission and purpose.

If the c-suite is to do its job properly, it needs to know that the services and functions for which the individuals remain responsible and accountable are run well. In other words, each member of the c-suite needs a posse of directors, charged with running and being accountable for their service lines.

For example:

Delegation of responsibility does not also mean delegation of accountability. C-suite members should expect at least to sponsor any item taken to the board from within their portfolio even if they do not lead the discussion. The arrangement allows the board to benefit from being briefed by a subject expert in the presence of the director with overall strategic responsibility for the area that includes the subject under review.

In other words, becoming ‘chief of’ is more than enjoying a change of title and status. The authority and responsibility for strategy and performance that post holders will assume demands a mindset change probably more than an alteration of functionality.

It is worth pondering whether this structure is appropriate in all circumstances. What is clear is that large, complex organisations are most likely to benefit from this type of structure. It might well be better for smaller and mid-sized bodies to be functionally managed. One of the main risks associated with c-suites is that of creating large silos. A chief role of will inevitably be described in terms of their main functional definition – i.e., the CFO ‘owns’ finance, the CHRO the people agenda, the CMO marketing and product development. While this might benefit overall functional accountability, the purpose of creating this layer of super directors is to enable the top of the office to think enterprise-wide and focus on the strategic, integrated, shared outcomes that will drive its ultimate success.

This may become an extended audition for a promotion – any good board director should be thinking about grooming their successor – so it is important that these directors are capable of taking over with immediate effect, at least in the short term. Preparing this group should be at the heart of any board succession plan. So, a key competence is being able to think and behave more broadly than a narrow area of expertise – and this is essential if the change is to be effective.

And in future…

While succession plans often focus on retaining the most talented members with real leadership potential, they’re also about refreshing the mix. So, part of the c-suite’s job is to keep an eye on the emerging talent in their own and indeed other organisations. This is not about spotting stars but more about identifying the team players who have the potential to add to the effectiveness of the organisation. It should consider who is ready to step up now – and who will be ready in two-to-three, or even five years.

Having identified potential successors, working out what development opportunities to offer is the logical next step. These could include stretch assignments, perhaps including being involved with the board, shadowing senior colleagues, taking part in collaborations or more ambiguous activities as well as encouraging line management skills. The idea is to assess potential as much as performance. It is of course a valuable opportunity to develop diversity and inclusion in the organisation.

In the face of so much continuing change – as Heraclitus sort of said, change is the only constant – now is a good time to reflect and act on leadership challenges and opportunities for the short and medium term.