The C-Suite’s missing element – The Chief Entrepreneur
Guest post By Rob Davidson
Forty per cent of companies are dying, they just don’t know it.
At least this is what Cisco’s outgoing CEO John Chambers claimed in his recent keynote speech and the reason, well no surprises there, digital technology.
Add to this the recently released report by the Committee for Economic Development Association (CEDA), which said 40 per cent of jobs in Australia are at serious risk of disappearing in the next decade and a concerning picture emerges.
Forty per cent of companies and at least 40 per cent of job types, gone in the next decade, how is a business meant to plan for the future in the face of those cheery predictions?
Chamber’s answer to this question is go digital or die.
His prediction is that 70 per cent of companies will ‘attempt’ to go digital, but only 30 per cent will succeed. The key message is that companies could not ‘miss a market transition or a business model’ or ‘underestimate your competitor of the future – not your competitor of the past.’
Cisco’s own response should send a shiver down the spine of many incumbent executives. As Chamber’s reshaped Cisco to become ‘future fit’, 24 of 92 leaders were let go and 41 per cent of client-interfacing executives were ‘changed.’
A conspiracy theory
So what’s a business owner or a board to do?’ Sweet Fanny Adams’, is the sad truth in many cases. I have my own conspiracy theory running as to why this might be. I call it the ‘Squeak Through’ generation.
Most CEOs, board members and senior executives are in their 50s and beyond. They’re not uniformed, they are well aware of the tsunami of change bearing down on them. We know this to be true. We recently ran a series of focus groups with QUT to test the level of awareness. The results were clear – business leaders are well aware of this threat but they are not responding in any meaningful way.
Why? Well this certainly did not come out of the focus group research, but my private view is the real issue is that for most business leaders, there is no serious personal threat. They’ve got enough superannuation and assets stashed away. They’ll just ‘squeak through’ to retirement before this wave comes crashing down. It’s the next person’s problem.
Cynical, I know but, you’d be amazed at the number of senior people I speak to, who in private, and off the record, admit this is a real issue.
A Chief Entrepreneur
Thank the gods for Alexander Osterwalder and the Harvard Business Review (HBR). HBR published an article by Osterwalder recently. Osterwalder proposes the best solution, I have heard to date.
The missing element, he believes, is that the C-Suite needs a Chief Entrepreneur.
“CEOs need a partner for innovation inside their companies, someone who will create and defend processes, incentives and metrics that encourage radical ideas and find new areas for growth. It’s an executive who can help large companies reinvent themselves while they are still successful.
“You could call this person the Chief Entrepreneur (CE) – someone who can lead the future of the company, while the CEO takes care of running the existing business.”
This role sits alongside the CEO and reports to the board.
I would argue that it is not just large companies who need this role. SMEs have as big a need or more so. In our own case, at Davidson, we have attempted to address this issue by realigning my role to Director of Growth, reporting to the board, and we’ve also appointed a highly successful entrepreneur as Chairman.
Most CEOs are simply too busy in the operational side of the business to have the time or head space to think creatively. The biggest impact has been the injection of genuine entrepreneurial talent at the board level.
I think companies of all sizes would do well, to consider the CE role, whether as a full-time executive or in the case of SME’s as an advisor or director.
Osterwalder kindly paints a very clear picture of the competencies required for this role; he even drafts a job advertisement for the position. In summary, the advertisement seeks to attract a person who:
- Is passionate about building businesses – with a proven and impressive track record;
- Believes anything is possible;
- Is comfortable with uncertainty; and
- Is tremendously diplomatic
The responsibilities of the CE include:
- Build the future of the company
- Guide and support your own team of entrepreneurs
- Design/construct a space for invention
- Introduce innovation accounting
- Establish and nurture a partnership with the CEO
- Report directly to the Chairman and the board of directors, this prevents the CEO vetoing potential ideas in order to preserve resources to underpin the existing business model.
In my view this role will become essential for every company that is serious about survival. It’s going to be a challenge to create this role, to find these people and to attract them to your company. These talented individuals will have options – many options.
There is a large piece of work to be done by the board and the Chair in particular to ready the company and the CEO for the possible disruption and potential disharmony this function could create.
But then that may well be a pittance, compared to the disruption and disharmony which will erupt when Silicon Valley comes to your industry and you have not properly prepared.