The Rise of the Superhero CEO

The Rise of the Superhero CEO


by Gianmario Verona, Rector, Bocconi University

Approaching 2020, all CEOs are forced to ponder how current megatrends will impact on production processes of the companies they lead and on the consumption patterns of the markets served by the business model implemented during their leadership. Big Data, AI, Generation Z, corporate and environmental sustainability, geopolitical shifts all create a level of complexity that is far greater than what previous generations of executives had to face.

Actually, the entrepreneurial trend is the absolute novelty of the current business scenario. Until recently, all that a chief executive had to do was to manage the business organization and execute the corporate strategy. Today, however, top managers must learn how to continuously innovate. CEOs are becoming increasingly aware of the fact that business firms are going back to square one, when large companies emerged at the beginning of the last century in the crucible of the Second Industrial Revolution.  They must ultimately recover the primordial mission of any enterprise: to create value from organic sources, either by developing existing businesses or by starting new ones from scratch. This happens after years of consolidation and Fordist bureaucratization, fueled by a positive push towards globalization that, until recently, seemed irreversible. This made us forget that the raison d'être of any company lies in the achievement of a Schumpeterian combination that addresses an existing supply gap with a technologically and economically viable product or service.

Put this way, the job of the contemporary CEO is to be a superhero, rather than a manager. There is the feeling that emerging styles of successful leadership in disparate industries are leading to a change of paradigm with respect to the CEO’s role, something that is a Copernican revolution, to borrow a term from the history of science.

In the past, the company revolved around the CEO and his/her management team. This was a Ptolemaic conception of the CEO, placed at the center of the universe like the Earth was imagined to be before Copernicus. The CEO (almost always a man) and his team were put at the center of the corporate universe. It was a technical and hierarchical staff, in love with control and verticality. In fact, the CEO was a de facto supreme commander, surrounded by generals who ran bunker-like divisions and whose separate information assets were brought together only in the war room during joint chiefs of staff meetings.

Access to information was limited and opacity correlated with corporate power: "Information is power," as Edgar J. Hoover was fond of saying. It is no coincidence that the early theoretical references for management were inspired by manuals of military strategy. Experimentation was relegated to a single corporate function, R&D, which, save for rare cases mainly related to technology industries, was perceived as a necessary cost rather than an opportunity to create value. The consumer was seen as a mysterious psycho-social black box, which companies sought to understand through costly market research, and seduce with expensive advertising stratagems conveyed via a limited number of news sources and TV channels in a simple media environment.

All this led to a construction of complex organigrams which were hard to comprehend from a functional point of view. Such complicated hierarchy gave untrammeled power to the CEO, who constituted the main axis of the company system. In the late 1980s, business schools, which had historically been led by economists and consultants, started to hire cohorts of psychologists and sociologists to provide plausible alternative explanations for the organizational structures of companies and find a logic in their functioning, which seemed less and less rational from a purely economic perspective.

In contrast, today’s companies are simplifying their organizations to deal with the growing complexity of markets. Thanks to access to plentiful data, they have the opportunity to develop continuous innovation, and satisfy, with new services and products, the increasingly personalized tastes of multitasking, hyperinformed consumers. The integration of skills necessary for creating innovations, and the speed with which they must be produced, is unprecedented. Therefore managerial hierarchy gets flattened, and the integration of business processes becomes an absolute necessity.

The CEO must make this new context his/her own. Team work is essential, not in a rhetorical sense and not limited to the management team, but in the concrete sense of motivating every single member of the organization to act. It is a question of quickly making decisions to identify new growth paths, persuade consumers and sell at high prices, in a world where the market for information is perfectly competitive. This implies being able to negotiate the risk and financial resources necessary to adequately address the new complexity. In essence, the chief executive as superhero is the child of the Copernican revolution that has changed companies. It is the manager who must now rotate around the company’s business model, the true center of the corporate universe. To do so, a CEO must be able to innovate and nurture a culture of innovation within the company, whose resistance to change is the real enemy to be fought. He or she must believe in the business model and know how to narrate it with passion and conviction.

The coming superhero is a Schumpeterian manager, an executive entrepreneurial more similar to the Henry Ford of a hundred years ago who sought to put a car in the garage of every American household, rather than the Ford that in subsequent decades built the organizational bureaucracy we have come to term Fordism, in order to conquer world markets. Entrepreneurial management is a decidedly arduous task, but one that is likely to give satisfaction to aspiring superheroes and superheroines at the helm of corporations, as well as the stakeholders who support them in interpreting their new executive role.

Read more about this topic:
The Relationship Between Salary and Value
No Longer a Family Matter

Breaking the Rule of the Firstborn
The Political Influence of CEOs

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