This is an excerpt of AESC's report Leading Transformation: Shaping the C-Suite for Business. In the excerpt, AESC member executive recruiters how they believe the C-level leaders will need to evolve to compete in Business 4.0.

CEOs Must Drive the Culture Change

“If you would like to invest in technology and innovation, and actualize the digital transformation, you need to start from the top, and that is the CEO,” stated one consultant in the life sciences sector. “You need a CEO who can shape organizational strategy, be an advocate for solutions and build the trust of the board that they know what they’re doing,” stated another consultant based in Australia. “Then you need a CEO who feels sufficiently comfortable that they can hand over their agenda to more technical executives who have more substantive skills to lead the innovation agenda. The CEO needs to be comfortable in their skin and prepared to hand over some discretion to people who have more of the technical skills within this area. And the CEO really needs to know what innovation can deliver to make their organization more effective. They do have to have a vision. You could throw around a lot of money, fashionable ideas, but you need to have a very strong point of view about what you want to achieve and what you think you can achieve by engaging with the 4.0 opportunity.”

A consultant specializing in financial services stated, “CEOs have gone from being people that sit behind desks and delegate to actually being doers and those who have to lead by example. CEOs have to become a lot more savvy with digital technology. They have to understand technology and how that can impact the business. How to use new innovative technologies is something a CEO has to have. We see a lot of organizations here in the Middle East replacing their CEOs because they lack that ability to understand digitization, artificial intelligence and how to infuse those technologies within their organizations.”

“CEOs must be increasingly aware of digital channels and digital connectivity to customers,” stated a consultant based in Australia. “You talk to CEOs here in Australia and it’s all about customers. It’s not about products or channels, it’s all about the customer being at the center of everything—how do we think about and engage with them and understand what they want. CEOs now also need to be able to harness the power of digital and AI—digital in terms of, again, how do we connect and engage with customers, that’s the cornerstone of their thinking. And AI, really, they need to be able to harness the power of data and how does it drive customer strategies as well as driving cost optimization and efficiency of operation. So, while CEOs have all their same focus and deliverables as before, that switch to customer at the center of everything is new.”

“The mantra of the CEO is that it is lonely at the top. That doesn’t change,” shared a consultant based in the UK. “But more than ever before, the CEO needs to be the director of the orchestra and promote the C-Suite collaboration and continuous learning. The CEO must be looking at innovation in processes, in interactions, in offerings and promoting creative thinking and lateral thinking.” Another consultant commented, “Crisis management is also becoming more critical for CEOs and they have to be more aware of cybersecurity. Today a breech can go viral in 24 hours. That’s a big change from the past.”

CHROs Must Lead a Business 4.0 Talent Strategy

CHROs must embed the workforce of the future. The CHRO will have a tremendous responsibility in changing organizational culture and facilitating new ways of working. Managing changes in technology that impact people significantly will need to be navigated by CHROs. “CHROs will need to enable more continuous learning than ever before,” shared a consultant serving the technology sector. “CHROs will need to become much more strategic and identify the traits and competencies required to affect significant change in the organization to transition to a Business 4.0 approach.

“Digitalization will affect CHROs the most, since a huge part of the workforce will become redundant one way or another. CHROs must prepare for this and develop alternative employment models,” shared a consultant in Germany. CHROs will need to be open to finding talent with skills that don’t fit the traditional mold. They will have to look beyond the current qualifications and find people with diverse skill sets that will help achieve the organization’s innovation goals.

CHROs will be key to putting in place tools, processes, organizational structure and talent pipelines to support transformation. “As the level of sophistication increases among organizations about how their people can truly accelerate the performance of their business, the need for change among CHROs will be enormous. I could see the role of CHRO and Chief Data Officer converging, leading to sophisticated people analytics that will drive business performance,” shared a consultant specializing in the industrial sector.

CFOs Must Support Innovation Through Long-Term Investment

“The CFO will also need to be fluent with new automation technologies,” shared a consultant specializing in the technology sector. “The CFO has become a much more strategic role, with a focus on critical thinking and problem solving. The evolution of technology also impacts the investment approach and so CFOs need to be able to devise technology-related business cases. They need to help the organization manage all the financial implications of an ongoing technology investment.”

“CFOs are too much in their comfort zone,” shared a consultant in the technology sector. “CFOs need to change especially as their departments are at risk of automation,” shared a consultant in the UK. CFO roles will need to explore and consider threats and opportunities and ensure these are incorporated into strategy, enabling other functions including HR, marketing and technology. They will need to understand the future company direction and translate that understanding into meaningful change related to tools, processes, and capabilities. CFOs will be on the front lines when it comes to driving and supporting the change organizations need to make.

One consultant with clients in financial services commented, “The CFO role is changing, somewhat less because of the influence of digital and artificial intelligence, and more because organizations now need finance talent that is not your typical accountant but a much more strategic CFO. CFOs now often bring other industry experience, ex-bankers for example, rather than a traditional accountant.”