The Evolving Executive

​A century ago—about the time that the concept of the "company executive" took root in America—the typical chief executive officer was practically a monarch.

He (and back then it was almost always a "he") wielded near-absolute authority with the help of a relatively tiny team. Very likely, he'd "grown up" in the organization, working his way from lower positions to the top ranks, which gave him intimate insight into nearly every company operation. 

He probably had deep roots in the community where his enterprise was headquartered—worshipping at the same church as his subordinates, sending his children to the same schools, attending the same local fairs—which meant he forged close bonds with his workers.

Today, America's C-suite looks more like a democracy than a monarchy. Today's CEOs may have the final word, but they collaborate with a host of other executives—chief human resource officers, chief operating officers, chief financial officers and others—and their power is far more tempered by shareholders, boards of directors and even their own employees than in times past.

Many of them are what we now call "professional executives." Unlike company leaders of decades past, they might not have any roots in the organization, the industry or the community in which they work. They're likely to have come from outside the organization—hired not so much for familiarity with the operation or its workers, but more for connections, social capital, strategic mastery and an ability to anticipate change and turn on a dime to accommodate a work world that's rapidly changing.

"They are akin to politicians—crafting a public image about the company," says Timothy Quigley, an associate professor of management at the University of Georgia whose doctoral dissertation examined the role of the company executive going back many decades. "They're being told to go out there and make big decisions, take more risks, turn more knobs, twist more levers. And so, the decisions [executives] make today have more impact than they did years ago."

The era in which we now live and work is very different from the industrial era that characterized the 20th century until at least the 1980s. The collapse of the Soviet Union, the formation of the European Union, the rise of China, the digital revolution, globalization, climate change, the social revolutions in many countries, the financial crisis in the first decade of the 21st century and, most recently, the COVID-19 pandemic have cumulatively created an environment that is essentially a new world.

And that new world requires a new type of business leader.

What's required of today's executives? What will be required in the years to come?

More Transparency

Many executives can attest to the importance of surrounding themselves with other talented leaders who have expertise they may not, or outsourcing jobs too complicated or time-consuming for in-house employees. That means ceding control, and that leads to flatter, less hierarchical organizations where power is more diffused across a company than it might have been decades ago.

"It's not so much about power now, it's more about partnership," says Mari Kemp, senior vice president at Ease, a San Francisco-based provider of HR platforms for benefits administrators. "Years ago, when a CEO wanted to make a change, he did it and it was done. Now, it's more of a conversation, more about getting buy-in, because if workers don't buy in … people wind up quitting."

Today's organizations also tend to become flatter because of generational demands and social media advances. With a simple computer search, a worker or job applicant can discover what salary he or she should be earning compared to his or her counterparts in the marketplace, whether a company backs up its "sustainable energy" talk with action, and if current and former employees feel happy and valued at the organization.

As a result, lower-level workers increasingly have a voice in company decisions.

If they don't like what they discover about their employer or what they experience at work, they can walk—or they can take action that quickly reverberates around the globe, as some 80 Apple employees did last summer when they wrote an open letter to CEO Tim Cook objecting to his return-to-the-office mandate. Their argument? "We feel like the current policy is not sufficient in addressing many of our needs."

A few months earlier, more than 500 employees of Google wrote an open letter to Alphabet and Google CEO Sundar Pichai, demanding the company stop protecting harassers and provide workers with a safer environment.

"I can't fathom employees, two years ago, writing letters to Tim Cook, or Google employees challenging the CEO," says Peter Messana, CEO of San Antonia-based Searchspring, which builds search technology for online retailers' websites.

What does this mean for the company executive? Increasingly, it means he or she is now required to be more transparent—about the organization's finances, its investments, its social and environmental responsibility. Executives are now keenly aware that who they hire, groom and promote—and whether their decisions track with the expectations of an increasingly diverse workforce—will be monitored closely not only by their boards, but also by an ever-watchful public that's attuned to social media and can turn a company's fortunes in an instant.

It means that concepts like "empathy" and "work flexibility"—terms hardly common in corporate circles several decades ago—have now become part of corporate America's DNA.

In other words, to succeed as an executive in today's work world has a lot to do with relinquishing the role of the monarch.

"If you aren't evolving, you're in trouble," says Johnny C. Taylor, Jr., SHRM-SCP, president and chief executive officer of the Society for Human Resource Management in Alexandria, Va. "When I talk to a leader who says, 'I've been doing the same thing for 20 years and it's worked,' then I think, 'You're already behind.' "

More Humility

Shortly after Dick Burke took over Chicago-based immigration-services provider Envoy Global in 2015—fresh from having run a successful apartment-finding business—he decided to create a new line of work: helping immigrants move their families to the U.S.

He hired new employees to launch the service, soon discovered his vision wouldn't pan out, and had to fire those workers about a year later.

"So, this total [outsider] hires a bunch of people and has to fire them," says Burke, who described that year as "very difficult for me." "[Employees] were critical. They were not trusting. They were like, 'Who is this guy?' I was brought in as a professional CEO, and I hadn't built up a reservoir of goodwill."

To regain the trust of those remaining on his team, Burke said, he realized he needed to make some changes.

"I don't have a private office," Burke says. "I sit on the floor. I know everyone's names. I am deliberately self-critical in public so people can speak candidly about what works and what doesn't—to be an approachable human, acknowledging frailty and weakness—all to make up for the fact that I didn't come up through the organization for 20 years."

Transparent. Humble. Vulnerable. Relatable. These aren't adjectives one would have associated with the executives of years past. Today, however, one increasingly hears those terms used to describe successful company leaders.

When Teresa Hopke first became an executive 15 years ago, her training focused on "how to be calm, cool and collected, to exude confidence." Vulnerability in an executive was rarely encouraged.

Today, as the Americas' CEO for Talking Talent—a global coaching firm that focuses on making workplaces inclusive—Hopke has learned that allowing herself to be vulnerable actually inspires employees to feel more connected and loyal to the company.

Recently, for instance, Hopke had a call scheduled with an employee shortly after dropping her 9-year-old twins off for their first day of school. She'd spilled coffee all over her walls and carpet. She and her husband had argued about their teenage son's phone use. When Hopke got on the call, she confessed to her employee just how badly her morning had gone.

"By telling her, 'I'm a little frazzled today,' [she felt comfortable sharing] some things going on with her personally, and we ended up having a deeper connection," Hopke says.

She acknowledges that this type of transparency has risks. "It may not feel good. And it can be seen as a sign of weakness," Hopke says. "But it creates a culture where there isn't fear of failure or a desire for perfection. That culture of authenticity allows people to bring their best selves to work."
                                                  

The business world has made strides in diversifying the C-suite. But many argue that it hasn't come far enough. Women make up 56 percent of front-line employees in the U.S. but only 29 percent of the C-suite, according to the Gartner 2021 Leadership Progression and Diversity Survey. Black and Indigenous people and other people of color make up 31 percent of front-line workers but only 17 percent of the C-suite. Meanwhile, Out Leadership, a business network that helps companies place LGBTQ+ leaders in executive positions, reports that fewer than 1 percent of Fortune 500 CEOs publicly identify as LGBTQ. The top reason HR managers gave for this lack of diversity in leadership roles was "not having enough diverse leadership talent in the pipeline," according to Gartner, whose researchers also interviewed more than 100 corporate HR leaders. The people who fill those leadership pipelines get there thanks to a number of advantages. Among them: whether they went to college, where they went to college, whether they receive internships, the connections they make, the mentors they have, and their access to career development programs. Those advantages are often based on one's background, income and racial privilege.  Those advantages—or lack of them—struck Ryan Buchanan the day he attended a conference of business leaders in Portland, Ore., and realized that of the 90-some executives there, nearly every single one was a white man. The steps he's taken to include more women, Black and Indigenous people and other people of color, and LGBTQ individuals in top leadership roles throughout the Portland area reveal that achieving diversity in the C-suite requires change on several levels. Buchanan—CEO of digital marketing agency Thesis—co-founded two nonprofits that provide college scholarships to students from underrepresented backgrounds. He reached out to some 100 executives he knows in the area and won commitments from them to support his nonprofits by providing internships and mentorship to a diverse candidate pool. His nonprofits also provide career and leadership training for a diverse group of young professionals—who are typically 22 to 35 years old—which includes a five-week course on topics such as education, insurance products, retirement savings and building wealth through home ownership. The organizations also invest in resource groups for interns and young professionals from underrepresented backgrounds.—D.W.

More Empathy

Ben Herman can recall a time when his bosses at a Wall Street hedge fund firm would yell directions from across the room and publicly berate those who weren't performing well.

Such leaders, he recalls, didn't mince words, much less sit down with their workers for heart-to-heart talks about their future or their dreams. They may not have looked well upon those who needed time off to care for a newborn or tend to a sick relative.

"Employee engagement" might not have been a term uppermost in their minds; at the top of the agenda, instead, was the day's draw.

Now an executive himself, Herman has learned that one of the most important things to a company's success is having empathetic executives.

"Leadership, even just a decade ago, was more about brute force," says Herman, founding partner of Los Angeles-based investment firm Kin Ventures. "In today's world ... people want to be motivated and inspired by model leaders."

What is it about today's world that places such an emphasis on being an empathetic leader?

It's partly because of the current labor shortage, which underscores the pressure on companies to appeal to job candidates and hang on to existing workers, executives say. It's partly because the pandemic, racial inequality and political upheaval have forced executives to understand how stress is affecting their employees.

It's also because the gig economy has shortened the tenures of most workers, who can easily bounce from job to job, inspiring companies to dream up ways to boost retention.
It's because social media has allowed workers to insist publicly on proper treatment for themselves, as well as for underprivileged and disenfranchised people and the environment.

And, executives say, it's because rapid advances in technology have reshaped workers' expectations—especially younger employees accustomed to instant gratification, not shy about making demands and unafraid to speak up when they're displeased.

"I'm competing for top employees with every company in the world," says David Kemmerer, the CEO of Coin Ledger Inc. (formerly cryptotrader.tax), which helps crypto-currency investors prepare their taxes. "You'd better believe the employees have to be treated very well."

In the industrial era, organizations were designed "despite what it means to be human," notes Michael Lurie, a partner with McKinsey & Co. "To succeed in the digital era, we must design organizations around what it means to be human. To do this does require us to evolve as human beings. … These higher levels of consciousness have been at the core of all human progress, and fostering this evolution among leaders is among the most powerful and meaningful aspects of the leadership transformation work that we do."   

The command-and-control model of executive leadership—and the notion that one is lucky to have a job at all—may have been how corporate America grew up, notes Meg Newhouse, CEO and co-founder of Inspirant Group, a Chicago-based management consultancy. But she believes "it's evolved now."

"Humans are human, and they don't turn off what's happening when they get to the [workplace]. To expect people to do that is rather unevolved. To get the best out of a team of humans, you have to relate to them as humans, not like they're robots."

Dana Wilkie is a writer for SHRM's Executive Network newsletter, EN: Brief.

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