Good news for today’s MBA grads: The share of large company chief executives with graduate business degrees has grown nearly 50 percent in the past 10 years. But don’t start decorating your corner office yet. There’s a lot to learn before you’re ready to take the CEO chair.
Digitization and globalization will change industries in ways we can just begin to imagine today. Everything will move faster — people, teams, trends, portfolios, and competitors. Companies will find it harder to meaningfully differentiate themselves, and they will need to make complex trade-offs when deciding where to invest for growth.
Future CEOs will have be comfortable working in a reconfigured C-suite. A new role, that of chief resources officer, will probably evolve from today’s chief human resources officer. This person will help the company respond to shortages of natural resources, shifting demographics in the workforce, and all other non-financial resources. And tomorrow’s CEO is likelier than ever to be female: We anticipate that about a third of 2040’s incoming CEOs at large public companies will be women, up from just 3 percent today.
The average CEO starts the job at 52. If you’re 27 — the average age of a Harvard MBA — that gives you 25 years to prepare. Here’s what we think CEOs will encounter in 2039, as well as five areas in which you can start building skills to help you succeed as one of the CEOs of tomorrow:
Develop a strategy and execute it
Possible strategies will come and go quickly. Many will be unfamiliar, so it will be harder than ever for CEOs to find the right balance between attractive opportunities and those their companies can win.
Most companies don’t align strategy and execution well at all. It will be your job to fix this. The most successful strategies are built on what your company is able to do better than any other — its handful of differentiating capabilities. Learn how to define your company by what it does, not what it sells. Identify the capabilities core to that identity, use them as a filter for choosing opportunities, and ensure that the entire organization delivers on that promise.
Manage resources as strategic investments
A company can’t thrive without putting resources toward what matters most—and that’s not happening today. As CEO, you will need to realize that allocating resources equally across the board is not a winning formula. Treat costs as investments and budgeting as an opportunity to align your company more closely to your strategy. Outsource or team up to accomplish the many tasks your company doesn’t need to do better than others. Learn to focus more money and time than your competitors do on the few differentiating capabilities that matter most to your success, and cut back drastically everywhere else.
Build strong, flexible, teams from across the enterprise
Every distinctive capability relies on contributions from many different functions, such as sales, marketing, IT, distribution, legal, and so on. Think of Apple’s (AAPL) intuitive interface and design capabilities or Amazon’s (AMZN)distribution and data analytics. Integrating all these functions is a huge task and one most companies struggle with today.
As CEO, you and your executive team will need to ensure that your people work together in a coherent system and continuously deliver on and improve your company’s few distinctive capabilities as the marketplace changes. All this will require you to master the architecture of collaboration, calling on empathy, emotional intelligence, and long experience on different kinds of teams.
Be a great connector
The vast majority of executives say their company’s overall business strategy isn’t well understood across the company and that it only moderately guides decision-making.
To get your company out of that hole, you’ll need to be a master communicator. In a more transparent, always-on world, with more stakeholders interested and invested in what your company is up to, you’ll need to communicate extensively. You’ll need to build wide-ranging partnerships and other links across enterprises. These might be formal links with other companies that contribute to your products or services, longstanding partnerships with non-governmental organizations to provide social goods, or building relationships with your industry’s regulators around the globe. Doing all this will require extraordinary listening, speaking, writing, and engagement abilities. Hone those skills in every activity you undertake.
Deploy technology as a competitive advantage
Technology is already a disruptive force changing the structure of most industries. It will only become more powerful. You, as a CEO, will need to have a deep understanding of IT across the enterprise—far greater than any present-day CEO. You’ll also need to be expert in flexible digital business models that allow you to constantly test, improve, and change your offerings, consumer technologies that shape customer engagement, and data analytics that surpass today’s Big Data.
Luckily, many of you are already steeped in technology. The key here is to stay that way and to ensure you are expert in the technologies most crucial to your company’s differentiating capabilities and most likely to disrupt your industry.
Being a CEO is a big job, and by 2040 it will only get bigger. Focusing on developing skills in these five areas should prepare you well for the corner office.