‘A MASSIVE LEADERSHIP TRANSFORMATION’

‘A MASSIVE LEADERSHIP TRANSFORMATION’

CEOs, CHROs and other company leaders from across America gathered virtually this fall for the CEO Talent Summit conducted by Chief Executive Group. Even amid the slowdown of an economy struggling with inflation, continued supplychain difficulties, a bearish stock market, record-steep hikes in interest rates and anxiety over geopolitics, the theme was clear: Companies are still doing everything they can to add and keep great talent, and they need help in doing so. Here are highlights of what they heard.

BY DALE BUSS

LEADERSHIP AMID THE GENERATIONAL HANDOVER

WHEN HE WAS CHAIRMAN and CEO of Medtronic, the big medical-equipment supplier, Bill George became known for leading in a transformative way that was emulated by many leaders of the boomer generation. Now, as coauthor of his updated book, True North, George has some ideas for today’s business

Bill George, Author chiefs as they contemplate how to lead new generations of workers—and in many cases, leaders who themselves are members of the millennial cohort that is ascending to the top of the leadership pyramid in American business and society.

“We’re going through a massive leadership transformation,” George told the Chief Executive summit. “Boomers have been in charge for the last 30 years, largely with a command-and-control focus on primacy. Things are changing dramatically now [and there’s] an opportunity for a new generation to step up to all the top roles.”

Empathy, a values base and authenticity are the winning characteristics of the new generation of leadership, he said. “If you want to be a great leader now, you need to integrate brainpower and analytical skills with heart and qualities like compassion, passion for work and the courage to make bold decisions—and also have empathy. You can’t just be the smartest person in the room.”

George urged leaders to adopt “servant leadership,” a leadership philosophy that has been gaining traction. “You work with people individually and spend a lot of time, get to know them and their hopes and dreams, and see if you can find alignment between an individual’s purpose and the company’s purpose and values,” he said. “There are many worthwhile purposes in organizations that can bring them together.”

He expressed little patience for the “quiet quitting” that seems to be a new approach for disgruntled workers. “It’s a terrible idea,” George said. “If you hate your work, quit. If you hate your supererior, find someone else in the company to work for.”

And company leaders should facilitate that approach from the top down. “Top management has tolerated self-interested people,” George said, “and we need to get them out.”

THE “HOW” BEHIND MAKING HR A STRATEGIC FUNCTION

COMPANIES CAN now gather, massage and analyze data for greater advantage than ever in recruiting and managing talent, retaining employees and assisting them in their journeys within the corporation—or even their Samantha Hammock, Verizon career paths outside of it. “HR should be run with the same discipline and rigor as any other business group,” Samantha Hammock, executive vice president and chief human resources officer for Verizon, told the summit. “Our mission is to attract the right talent for our future, develop them to their full potential and inspire them to build a career at Verizon.” In fact, the telecommunications giant has been transforming its approach to make human resources “a data-driven function to deliver for the business,” she said. “It has evolved more than many other functions have.”

Here’s how Hammock said she and Verizon have been going about the transformation. 1) Create a master plan. “Getting HR on an annual operating plan is key, about what your team is doing from the top down,” she said. “You need to get that really succinct and calibrated [toward] evolving business needs. And make it clear.” Adopting a longer-term “strategic workforce plan” (SWP) is important, too, as the company decides, for instance, whether it wants to “buy” or “lease” talent and decide “where we’re going to build up our talent capabilities for the future” as well as “where we’re going to divest” capabilities. 2) Illuminate priorities. HR chiefs must “circle back to the business leaders and the executive committee and say, ‘Here’s what we are prioritizing.’ Equally important is [to say] what you’re not prioritizing.” And, Hammock said, CHROs shouldn’t allow their bailiwick to become “catch-alls” for functions that may not fit easily elsewhere.

3) Devise helpful tools. Verizon put huge effort into creating a data-based tool it calls Talent GPS that helps its 120,000 employees worldwide create and pursue their own career paths within and even outside the company. It simplifies jobs into just a relative handful of “families,” provides standardized titles and definitions of roles, outlines the skills required, shows reporting relationships within the company and more. “It’s a way of putting our people in the driver’s seat of their career,” Hammock said. “The only way of doing that is to provide the right tools and transparency.” 4) Simplify terminology. Career paths can be zig-zaggy and even seemingly illogical, especially in large organizations with a “matrix” approach, where development and promotion aren’t always linear. “Role clarity can get tricky, so having [titles and roles] really clean [in Talent GPS] is very important,” Hammock said. “That doesn’t mean we’d never add a job title. But we also might decommission some titles. It’s very important to keep this updated as you create jobs in the future. It also provides a [roadmap] for reskilling and upskilling” employees. 5) Don’t be jealous. Verizon ensured that its simplified job goals and job titles in Talent GPS would “translate externally as well,” Hammock said. “Employees need to be able to market that. We do want our people to be marketable, and not just to us. This also creates amazing demand and attraction for others” to Verizon. 6) Stay on top. Confirming the centrality of human-capital management in a company means ensuring alignment with the CEO and engaging with peers in the C-Suite. At Verizon, “I go to [board] committee meetings,” Hammock said. “There’s no place the rest of the executive team is sitting that HR is not.” And on a quarterly basis, she reviews SWPs with each functional head “in alignment with their own goals and strategic imperatives.”

THE COMPENSATION CONUNDRUM IS GETTING MORE COMPLEX

IT’S CRUCIAL FOR companies to get executive compensation right, but it’s still “not getting any easier to retain top talent” by paying them well, Wayne Cooper, chairman of the Chief Executive Group, told the summit. Here were some key findings of the 12th annual Chief Executive Group compensation survey for private companies that Cooper and Isabella Mourgelas, research analyst for the company, shared with the summit participants:

• Median CEO pay was $445,000 in 2021, up from $386,000 in 2020, during the worst of Covid. • Wages being demanded by new recruits were the most common factor that materially impacted compensation in 2022, with 74 percent of the survey’s 1,849 respondents Wayne Cooper, putting it at the top. The need to help employees keep up Chief Executive Group with the cost of living was second, at 65 percent. • Reducing costs in other places was the most common action being taken in response to rising wages, with 67 percent of CEOs doing so.

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BECOMING AN ENGAGED and empowered leader can be a matter of closely following an acronym. “It’s not necessarily ordering people what to do but pulling the best efforts out of people,” said Zach Clayton, a millennial entrepreneur; CEO of Three Ships, a digital-marketing agency in Raleigh, North Carolina; and co-author of True North: Emerging Leader Addition with Bill George, who was the agency’s first client. “Emerging leaders in the millennial and Generation Z generations respond much better to that style of leadership.”

Clayton summed up the key acronym—COACH—for the summit.

C: “Care about your teammates. You need deep connections and personal relationships,” he said. “Do you know about their life outside of work? Out of caring relationships

comes a foundation of trust.” O: Organize people “around their sweet spots,” Clayton said. Get people working together by putting them in wellmatched roles that allow them to collaborate effectively. A: Align charges around “their mission and their work as a team,” he said. “Why does the business exist? Make Zach Clayton, Three Ships sure they understand that, beyond making money. How does it make a difference in people’s lives? Paint a vision and cascade that through the organization [in a way] that is so vivid people can taste it.” C: Challenge employees by seeking the best out of them “so they can reach their full potential,” Clayton said. Encourage them to “watch their game tape,” like a football player the day after the game, so they can do better. H: Help people by “rolling up your sleeves and getting on the same side of the table” with employees, he said. “Add value. Is there a contact you have that can be useful? Something you can model?”

AI IS HERE, SO USE IT TO YOUR ADVANTAGE

ARTIFICIAL intelligence and machine learning are advancing so fast the technology is now accomplishing feats experts dismissed as never reachable just a few years ago. But those technological leaps mean the unfolding

Andrew McAfee, Author of more occupational opportunities for humans, not the end of work as we know it, argued summit keynoter Andrew McAfee.

“We’re early in the era of weirdly fast progress in AI, in areas where it had historically been bad,” said McAfee, cofounder and director of the MIT Initiative on the digital economy and author of The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. “But should we prepare for massive technology-related unemployment? Even with all of this astonishing progress, the answer is pretty clearly no.”

Here are things McAfee suggested company leaders should keep in mind in adapting rapidly improving AI to their needs.

You needn’t be afraid. “In addition to substituting for human labor; [technology is] also a complement,” he said. “It increases demand. It helps start new companies and industries. They still need people. We don’t have a personless organization yet. I don’t expect to see a peak-labor economy in a time frame we all need to worry about.”

Obsolescence will transform IT. Existing digital tools, McAfee said, “in general are too clerical in nature and not helping us address the real challenges. I look around and actually think that people doing jobs are being poorly served.”

One of the most problematic areas of IT is enterprise software, he said. A venture capitalist told McAfee that “most of it still sucks. We should be expecting a superpower from it, letting us do something we have real difficulty doing ourselves. AI is about to disrupt lots of different kinds of enterprise software.”

Talent software is improving. The data available on human-capital measures and trends “has gone up by leaps and bounds in the last 10 years,” including not only better government data on job markets but also online platforms such as LinkedIn, Glassdoor and Career Builder that bring qualitative insights.

But McAfee and colleagues are among those developing what he calls “radar systems for talent” that soon will be able to collect and analyze clues and signals about job desires, career trajectories, markets for skills and compensation patterns that will help companies optimize their hiring, training, promotion and development.

Scale isn’t everything. Not surprisingly, Amazon, with its nearly limitless computing power and market dominance, is on the front lines of harnessing AI to create yet more dominance. But McAfee urged attendees with smaller companies—which was just about everyone at the summit—not to be discouraged by the competition for taking advantage of AI’s capabilities.

“Amazon reached out to us because they don’t have their own capabilities, or we’re cheaper,” he said. “We’ll see specialized startups that can help [your companies] with some of these questions at first, so you can get AI-based insights.”

It’s already here. Despite the limitations it still suffers, AI already has transformed many aspects of work and life. “There’s [no] reason to walk away from this burst of progress or to be frightened by it,” McAfee said. “Think of all the ways life has already been improved by it.” CE