Turmoil and transition characterized the corporate c-suite again in 2023. New data from Russell Reynolds Associates, the leadership advisory firm, show CEO departures globally last year topped their 2019 levels at publicly traded companies.
Russell Reynolds attributes that to the complexity of the CEO role, and says the turnover means that corporate boards are looking for top executives who are less celebrity monarch and more understated team leader—so there’s bench strength and stability even as other leaders come and go.
To discuss further the changes over the past few years in how companies are being run, we caught up with Russell Reynolds CEO Constantine Alexandrakis on the sidelines of Davos. Here are excerpts from our conversation, edited for space and clarity:
Given the intersection of AI, flexible working, and inclusion, how is the management playbook different than it was a few years ago, and how is the work of running a company different than it might have been a few years ago?
I’d add into those variables the social-media mentality that is increasingly affecting how people ingest information and communicate information.
The playbook has made communications people and communication strategy even more important than they ever were. Everyone needs to, within their domain, have a really smart and continuous communication strategy. All those need to fit really neatly together, like puzzle pieces, to support what the company is doing. The playbook has been heavily driven into a need for much more strategic communication at multiple leadership levels. That is how people come together, what they know, what they don’t know, how they feed information to one another. It’s the bloodstream of the organization. That, top of mind, would be the biggest change since 2018.
What are CEOs doing these days?
We’ve seen from our business over the last six, 12 months, companies are really driving more technical expertise. I don’t mean technology expertise, although that’s part of it, but more expertise around finance, around treasury, around risk, around compensation and benefits. These kinds of jobs that are always out there and popular, but are never particularly spiking in any way, have been spiking.
Why are companies hiring more such people with deep expertise in specific areas?
It’s because of these CEOs being in fortification mode and saying, ‘Okay, how do we strengthen the fundamentals of how we manage risk, how we reward and retain our people? And how do we find new ways of rewarding innovation given the pace at which everything’s running?’
What else are they doing?
Over the last 12 months, they’ve been spending a lot of time on team optimization. We’ve seen a surge in demand for team effectiveness, culture reviews, team development, all those things. It probably comes under the umbrella of optimization, but it’s not about bringing change. It’s about bettering what we have and helping ensure the team is ready to tackle what it’s trying to do.
The theory was that the chief human resources officer (CHRO) role assumed greater strategic importance over the last few years….
It did during the pandemic for sure.
Where is the role of the CHRO today?
Since the late nineties there’s been this big push about HR transformation, changing HR from being transactional to being strategic. That trend has continued and continues, but it’s not linear. The pandemic was definitely a spike where a lot of CEOs and their CHROs were tied at the hip to figure out what was going on. I think CHROs did well. There was quite a bit of turnover just after the pandemic. Things have now stabilized there.
CHROs are permanently more strategic and are even more important lieutenants to the CEO than they were. There’s no going back. At the same time, if they don’t get on technology, if they don’t show that they can leverage AI for improving the people analytics of the company, for preventing turnover, all those sorts of things, they’ll fall behind. So they’re in a race to maintain their relevance as well.
Charter Pro members can read a full transcript of our discussion, including more on a rise in CEO optimism, DEI and ESG in the c-suite, and the state of AI strategy at US companies.