In 2009, Manres conducted its first CEO Study. The goal was to gain a CEO’s perspective on the current state of transformation and aspects related to implementation. Ten years and six surveys later, we have accumulated a wealth of information that provides us with unique insights into the challenges of transformation over the past decade, and how leaders have approached these issues over time. Which aspects of the transformation process have changed in recent years, according to CEOs? And which topics have remained constant as time goes by?
The past CEO surveys unanimously point to one constant. No matter what type of change the CEOs are facing, what the current state of the economy is or even what the current “leadership zeitgeist” is, it is always one of the key tasks, if not the most decisive task, of leaders to provide everyone involved with guidance based on a clear picture of the goal. To be effective, this picture has to be clearly communicated throughout the company. A shared goal has the power to focus everyone’s attention in the same direction and provide them with a purpose. Persuasiveness, perseverance and persistence are a big help in getting others on board and actually putting the transformation into place. After all, the transformation may require an extra level of engagement (for example, learning new skills or phasing out old, familiar processes). It’s also important to have a high threshold for frustration whenever someone makes a mistake or a setback occurs. Employees often encounter periods of uncertainty during transformation projects. They may ask themselves whether their own skills will be enough going forward. Or whether their job will even exist or have a place in the new structures. They may even question whether the additional work is even worthwhile, or whether the entire project might fail. If these questions go unanswered for too long, people may start leaving the company. High-performers, who are also crucial for the successful implementation of the transformation, have plenty of options on the job market thanks to their strong qualifications. To mitigate the risk of losing these key employees during unstable times, it is essential to foster their trust in the organization as a whole and in the decisions of the CEO. One important factor for fostering trust is for the company’s leadership to act with integrity. Employees need to see that their leaders are practicing what they preach. This allows them to trust in their bosses’ words and decisions.
All of the findings from the past ten years paint a consistent picture when clustered into cultural/psychological and content-logical task areas. On average, both areas are seen as crucial to the success of the transformation. By comparison, however, the cultural/psychological competencies and task areas of a CEO are considered somewhat more important. This means that they are treated with slightly more priority as tasks in the day-to-day work of a CEO. The surveys from the past ten years all show that transformation can only succeed when not only content-logical aspects but also interpersonal aspects are considered and worked on. Or, as Alois Vinzens, former CEO of Graubündner Kantonalbank says,
A transformation must not be understood and directed purely in technical terms, but must be seen as a change of mind.
CEO Graubündner Kantonalbank
Even ten years ago, change processes were as fundamental a topic to CEOs as they are today. This is clear from looking at the percentage of company employees who were involved in transformation processes at the time of each survey. Over the past years, there has been a continual increase in the number of companies in which 60 percent or more of the employees were affected by ongoing transformations (see Figure 5).
In the years from 2013 to 2017, there was also a general increase in the number of companies that were involved in a transformation of any kind. However, this trend did not continue in the 2019 survey (see Figure 6).
The scale of the transformation (in terms of the number of people involved) seems to depend largely on the extent to which the company’s current situation is viewed a stable (see Figure 7). Looking back on the past six years, the findings are relatively stable. Around 40 percent of the CEOs surveyed said during this period that they perceived their company’s situation as “fairly to very turbulent.” This means that the majority perceived their situation as “fairly stable to stable,” regardless of the fact that the number of employees involved in transformation processes has continued to increase over the years.
In this regard, it is clear that directing change processes is part of day-to-day work for top managers. Urs Schaeppi, CEO of Swisscom summarizes it as follows:
Actually, transformation is a process that never ends.
By looking at the reasons for transformation, it is clear that these have remained similar over time. Since we started surveying CEOs in 2009, the reasons for transformation primarily fall into the categories of process optimization, digitalization, adjusting to changes among competitors, and restructuring. Therefore, it is no surprise that ongoing changes occur and must occur even when the situation is largely perceived to be stable. In terms of the need for digitalization, standing still is not an option. The same can be said of competitiveness: it is in a state of constant change. Keeping up with the times requires for constant adjustments to processes and structures, and the changes in mindset and behavior that go along with these. In the words of Albert Einstein, “We cannot solve our problems with the same thinking we used when we created them.”
The high priority that CEOs assign to directing transformation processes in their everyday work can also be seen in the large amount of time that CEOs have invested in their work on change projects over the years. Even in 2011, a year that most of the CEOs surveyed perceived as “calm to very calm,” the company leaders still invested 20 percent of their time to transformation processes. For all the other years, this figure was around one quarter of their total working hours or more. Meanwhile, the financial investment during the past ten years was at least one-sixth of net profit (17-27 percent), except for 2011 when it was 12% (see Figure 8).
Therefore, it is unsurprising that many CEOs are investing increasingly in the specific transformation competencies of their leadership teams. In 2009, only half of the CEOs surveyed said they were making their leading employees fit for leadership positions through coaching, training or mentoring programs. However, that number continued to grow, reaching up to 90 percent by 2015 before settling around 80 percent over the last four years. This shows that the need for all levels of leadership to master certain transformation competencies has grown from being a matter of “common sense” to being a matter of “common practice,” and that it is worthwhile to invest in training. In order for a leadership team to be ready for the future, it must be equipped with the right tools for directing transformation processes. It must also know how to use these carefully to overcome any challenges that arise.
The findings of our past surveys make clear how essential the work of the company’s leaders and members of the top executive board is during periods of transformation. Which specific competencies can help leadership teams to successfully direct restructuring and optimization processes? The answers to this question lie in the CEOs’ responses to our questions about which core competencies and tasks they found to be most crucial for success. The insights from the past ten years identify two leadership tasks and four core competencies that all of the CEOs agreed belong in the top-five criteria for success.
Most important leadership tasks in times of change:
Core competencies of CEOs in times of change (surveyed starting in 2011)
By focusing clearly on these tasks and adequately applying/working carefully with these personal competencies, the many CEOs we surveyed have said that they can maximize the chances for lasting, successful transformation.