Most CEOs and boards name succession, both for the CEO and for business unit leaders, as their biggest strategic challenge. While this leadership challenge exists for every industry, it is particularly acute in the consumer sector, where many of the successive waves of disruption first hit.
Amoco, Anheuser-Busch, Chrysler, Motorola, Wrigley. Great Midwestern companies that failed to adapt to global competition and ended up being acquired. Many others have suffered the same fate or declared bankruptcy, and now the ongoing disruption from globalization and technological change is putting our legacy companies under further pressure.
What’s holding many of today’s best executives back from true success? It’s likely not skills or competencies, both of which have often been honed through years of development through ever-more challenging roles.
Egon Zehnder CEO Rajeev Vasudeva recently hosted a dinner for board members, CEOs and chief human resources officers whose operations in China and India give them a strong interest in developing local leaders in these emerging markets. The lively discussion generated the following observations.
Growth is the Holy Grail of corporate strategy. Not only do high-growth companies deliver significantly greater shareholder returns than the average, they are also five times more likely to survive as independent entities than their low-growth counterparts.
For businesses in every sector, Africa offers exciting prospects. Aggregate annual growth exceeds 6%, amongst the highest of any region, with the continent’s collective GDP forecast at $2.6 trillion by 2020. Africa is blessed with abundant natural resources and is seeing tremendous investment in oil and gas, mining and agriculture.
Family owned and promoter run organizations are often the best custodians of long term value creation in India. Yet, many of these organizations have had a mixed record in attracting and retaining high quality professional talent from the outside.
Egon Zehnder organized a roundtable discussion on 21 March 2014 in Chennai, India, with senior HR leaders across industries to discuss the leadership-related challenges faced by the companies in Chennai.
In the cover article of the June 2014 Harvard Business Review, Claudio Fernández-Aráoz argues that potential—even more than skill and experience—must be the deciding factor as companies recruit and promote executives in a fast-changing, talent-scarce world.
Over the past year Egon Zehnder has conducted an extensive research project involving direct interviews with more than 25 CEOs of major airlines around the world, and with leading industry thinkers. Our findings speak to a new competitive landscape.