The Making of a Modern CEO

The new normal in this economy is shaping up to be anything but normal. Businesses that have thrived for decades as industry icons are now permanently upended by the forces of the Web, social media, and new technologies that are crashing over the economy like a tidal wave.

Industries are experiencing systemic failure as a result of the digital revolution, coupled with an economy stuck in reverse. As noted in the book Macrowikinomics: Rebooting Business and the World [1], many industries have simply come to the end of their natural lifecycles, and business is going to have to be reinvented around a new set of principles including transparency, integrity, and collaboration.

As a result of these changes, the role of the CEO must evolve as well. The next generation of business leaders [2] will require new talents and a different set of skills to successfully grow business over the next decade. A modern CEO will focus on creating a business culture that's expansive, mapping a social purpose to the creation of goods and services. The new CEO will also change the way we think about leadership, and create a bulwark against the tide of business challenges coming our way over the next decade.

Here are three key characteristics for the modern CEO:

1.No Fear Communications-- The Modern CEO must shake off the "analysis paralysis" and listen and engage with social media. While it sometimes seems impossible to manage the fire hose of information, social channels provide what CEOs need most - unfiltered feedback. What's more, social media is the gift that keeps on giving. It's an early warning system, an instant feedback loop, and a brand sentiment barometer. Although CEOs are increasingly discussed in online venues, few are actually using social media to spread their own message. In a Weber Shandwick [3] Study, nearly two-thirds of CEOs were not engaging online at all, yet those who are enjoyed a better reputation with customers. CEOs need to blog, tweet, fan, follow, and friend their way into the hearts and minds of stakeholders.

2.No Fear Ambition-- A Korn Ferry [4] Study challenged organizations to identify future CEOs by distinguishing between blind ambition and true potential, the latter often being harder to identify. Today's CEO has to be comfortable in the digital realm, with ambitions to embrace mobile and social technologies and be willing to take a company in new directions. TechCrunch [5] notes that it is critical that Chief Executives have the right kind of ambition. That is, ambition for the success of the company rather than ambition for themselves. In 2011 we need to take this one step further. A Modern CEO needs to have ambition for the success of its employees, suppliers, the company, the community, and the planet.

3.No Fear World View -- To achieve success today, CEOs need to cultivate an external world view which guides the company in the broader context. For the Modern CEO, The Triple Bottom Line has become the ubiquitous measure of success: People, Planet, and Profits. The Edelman 2010 goodpurpose® Study [6] provides excellent insights into the rapid globalization of Corporate Social Responsibility (CSR). Consumers in developing countries are leading the way in their drive to buy from companies that are sustainable, and demonstrate a global consciousness. Consumers in Brazil, China, India and Mexico are all more likely to purchase and promote brands that support good causes, outpacing peers in the west. U.S. companies can take lessons from these emerging markets, where eight out of ten consumers expect brands to donate a portion of their profits to support a good cause.

The characteristics of a great CEO will continue to evolve as society changes, and for a while it will be rough sledding. There is no doubt that a change is imminent however, as consumers and shareholders demand it. Right now 64% of consumers believe that it is no longer enough for corporations to give money; they must integrate good causes into their everyday business. While CEOs still need to set vision and strategy, going forward that vision will be mapped to the social purpose that the company actually serves. These are the realities of a global, interconnected world.

Leadership: Vigilantism 2.0

Imagine that you're the CEO of a Fortune 500 company, running a multi-billion dollar organization with its many moving parts. One day your Google alert shows an article stating that your company's operations in Asia are employing child labor, with young children working long days in harsh conditions. By the next morning there are 62 articles and 305 mentions of this story. By afternoon there's a Facebook boycott with 10,000 fans. The Twittersphere has lit up with Tweets and hashtags like #slavelabor, #boycott, and #savethechildren--terms that are now unfortunately tied to your brand. You've been "Inter.outed," a term used to describe how a company is "outed" on the Internet for doing very bad things.

We've all heard the horror stories about how brands can be derailed through negative social media. Remember the Domino's Pizza nose-picking YouTube video, and "Motrin Mommies" digital disaster? Last week, The Gap was caught with its khakis down in a logo design backlash. In less than 48 hours of social pressure, the Gap withdrew its new logo. There are also more serious examples. Whole Foods suffered a Facebook, Twitter, Flickr, and YouTube boycott as well as bloggers who labeled them "A-Hole Foods" after the CEO stated that not everybody deserves health care. British Petroleum now has a worldwide Facebook boycott of more than 600,000.

While these boycotts can damage a brand, up until now business has not yet experienced the full force of Internet vengeance. There exists certain lawlessness on the Web, and individuals are only starting to understand the mighty influence they wield when they mass together in groups. Internet communities are still in their infancy, and users have yet to grasp the full depth of the power they have on the Web.

The New York Times reported on "cyberposses" in China, who dole out online vigilante justice by hunting down and punishing people. Internet vigilantism is often activated not for illegal behavior, but for socially reprehensible behavior. "The Kitten Killer of Hangzhou," for example, became the target of cyber sleuths who tracked her down and outed her. She lost her job, her apartment, and was made to leave town.

It's not much of a stretch to imagine that Internet vigilantism will soon cross over from individuals to organizations. Social activists use every media channel available to express disapproval for unfair or dishonest business practices. Users could easily turn to online vigilantism to punish companies who have attracted their wrath. The web is a great repository for track records, and has a long memory. If resentment over exorbitant Wall Street bonuses juxtaposed against illegal housing foreclosures ever boils over, vigilante groups could easily launch cyber-attacks on the banks they deem responsible. If a company employs sweatshop labor, is toxic to the planet, or mistreats its employees, tech-savvy users can crash servers, take down websites, and disrupt e-commerce business. Moreover, they can wage a ferocious battle for the hearts and minds of consumers to damage brand reputations.

So what is a CEO to do?

In this brave new world, CEOs need to prepare for the era of total transparency. Here are five steps a company can take to protect itself by strengthening its relationship with stakeholders:

• Clean house. Make sure your company is acting in good faith with customers, partners, and suppliers.

• Examine the supply chain, and make sure you are in compliance with all environmental and employee issues.

• Elevate your corporate social responsibility (CSR) programs to front and center. Integrate socially responsible initiatives directly into the core DNA of your company.

• Humanize your brand. Use Twitter, LinkedIn, and blogging to address issues directly, take user concerns seriously, and respond quickly and thoughtfully with no marketing spin.

• Always tell the truth.

On the web, all transgressions are trackable, and no corporate misdeed will ever be forgotten. Companies must embrace the new culture of transparency for survival, since Netizens are willing to fight hard for anything they believe in--even if it's just a logo.

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