As we enter the Fourth Industrial Revolution,
hyperconnectivity
is emerging as the defning
characteristic of the era — with profound implica-
tions for CEOs, senior leadership teams, and
entire organizations. In a hyperconnected world,
incremental improvement is not enough to stay
ahead of disruptive competitors. Winning requires
continual transformation.
Technology that has enabled the always-connected
consumer is generating massive economic oppor-
tunity for nimble, asset-light organizations. Uber,
Alibaba, and Airbnb now have a combined implied
valuation exceeding $300 billion. Each of these
innovators has been able to quickly achieve scale
with platform business models that efciently
match supply and demand to create value for all
parties. The result has been major disruption
to established brands in formerly capital-intensive
industries that seemed impervious to rapid change
because of high barriers to entry. CEOs around
the world are now asking, “Can that happen in our
industry” or, more pointedly, “How can we
disrupt our own industry or create a new one”
The technological catalysts for transformation in
the Fourth Industrial Revolution are already
emerging. “Pervasive computing” exists in a world
where the cloud, sensors, and mobile devices
all intersect, enabling an Internet of Everything that
makes machines smarter and people more
capable. Driverless cars, 3-D printing, smart homes,
smart factories, and smart cities demonstrate the
Leading transformation:
Five imperatives for CEOs
The transformative CEO in a hyperconnected world defends the core market
and
plays ofense as a disruptor.
range of possibilities ahead. Clearly, the hyper-
connected world is ripe with opportunity. It is also
fraught with risk. Competitive risks associated
with disruption can quickly leave a market leader
irrelevant. Risks of a malevolent nature, such as
identity theft on a massive scale, cyber-piracy, and
cyber-terrorism, can cripple an organization and
threaten stakeholder trust.
Five imperatives for CEOs driving transformation
Make no mistake: transformation can be more
difcult than disruption. Disrupters are often entrepre-
neurial upstarts, playing ofense all the time. By
contrast, transformation of an established enterprise
with a substantial asset base and ongoing capital
requirements calls for a strong defense as well as an
aggressive ofense.
From our work as a trusted talent and leadership
advisor to CEOs and boards at many of the world’s
most successful and infuential organizations, we
ofer the following fve imperatives for transformative
CEOs today. The frst three specifcally address our
hyperconnected world; the fnal two have stood the
test of time but have additional urgency in an era
of constant change.
1.Strengthen the core
and
embrace disruptive
change.
The transformative CEO in a hyper-
connected world defends the core market
and
plays ofense as a disruptor. The CEO must
work diligently to continuously improve the com-
petitiveness of the core business beyond
introductionThe transformation mandate: Leadership imperatives for a hyperconnected world
incremental improvements to quality and cost,
while simultaneously pursuing a strategy to
reinvent the business. A healthy and growing core
operation provides a stable platform (and neces-
sary cash fow) to launch disruptive ventures with
value-creating potential.
2.Invest with courage in both the short and long
term.
Winning CEOs move fast to act decisively
on pressing priorities while maintaining progress
on longer-term initiatives vital to sustainable
success. Long-term investments can put pressure
on current margins. Activist shareholders ratchet
up the pressure for immediate returns on their
investment. The forward-looking CEO thinks like
an activist investor without being prompted,
demonstrating a compelling case to clients, inves-
tors, and other stakeholders on the promise of
value to be realized down the road.
3.Accept that the life cycle of a winning strategy is
shrinking.
Gone are the days of strategies defned
in years. In today’s economy, it is no longer solely
what one knows but what one is prepared to learn.
Agility is now as important as strategy because
the playing feld is continually shifting. Strategic
plans must be adapted to seize opportunities
when fresh information points to emerging trends —
as well as to defend against heightened risks.
Winning CEOs embed a culture of innovation and
a low resistance to change into the organization.
4.Defne an enduring purpose as your compass.
We all want to be connected to something
meaningful. A well-articulated purpose serves not
as strategy but provides a sense of “true north,”
guiding the CEO — and the entire organization —
through ambiguity and rapid change. Constancy
of purpose provides a bedrock for the organization
that would otherwise be unsettled by the constant
change inherent in transformation.
5.Attract outstanding talent.
The diference
between good and great talent is orders of magni-
tude. The winning CEO’s passion, energy, drive,
and vision serve as a talent magnet, attracting top
talent from various backgrounds and geogra-
phies. Humbled by the scale and scope of hidden
opportunities and unseen risks, the winning
CEO draws strength from a truly diverse senior team,
comprised of talented individuals who each
bring a unique line of sight to the challenges ahead.
The successful CEO in a hyperconnected world
will demonstrate, model, and cultivate each
of these imperatives across three dimensions: the
leader personally, the senior leadership team,
and the entire organization.
The frst of these dimensions — the individual
leader — forms the structure for the insights that
follow. (For the full compendium from which these
insights are drawn, click here.) We hope that our
perspective informs and inspires your own thinking,
sparks candid and productive conversations among
your teams, and encourages your organization
to both embrace and fulfll its purpose, bringing
positive change to the world.
Tracy R. Wolstencroft
President and CEO, Heidrick & Struggles
Heidrick & Struggles3
Like every preceding industrial revolution,
the Fourth Industrial Revolution has caused massive
growing pains for businesses as they have moved
through the initial shocks of disruption to a more
recent, if uneasy, understanding that constant
acceleration is now, in fact, “normal.” Ready or not,
leaders must grapple with the subsequent chal-
lenges: the impact of technology and the digital world,
new and unprecedented socioeconomic implica-
tions, and signifcant geopolitical upheavals. All of
this forces companies and their leaders to reexamine
the
whys
and
hows
of their businesses — and to
do so at a much faster pace than ever before. It also
forces leaders to reexamine themselves.
How today’s leaders navigate and lead in such a fast-
changing environment is a dominant theme
of
The CEO Report
, the product of a research partner-
ship between Heidrick & Struggles and the Sad
Business School, University of Oxford.1 Our research
fnds that the complexity of the new dynamics
requires a changing approach to leadership. The days
of leaders having complete command over their
organizations are gone. Today’s leaders must be inspi-
rational yet calming, visionary yet down-to-earth,
“right” and yet not afraid to “not know.” They must
be monarchs but also very human and able to
navigate their organizations through multiple, often
paradoxical dem