The next C-suite pivot is from a DEI to a DOGE mindset—and leadership roles are in for a shakeup

A decade ago, a typical C-suite lineup would include the Chief Financial Officer, Chief Operating Officer, and Chief Technology Officer (in addition to the CEO). For financial institutions, it could also include the Chief Investment Officer or Chief Risk Officer. Sometimes, a Chief Marketing Officer would be added to the mix.

The corporate landscape is different today. From 2018 to 2023, C-suite roles within the environmental, social, and governance (ESG) function increased 230%; communications and public relations roles increased 133%; legal roles increased 127%; and strategy roles increased 94%. This growth is not surprising, given the increased popularity of Chief Sustainability Officers or Chief Diversity, Equity, and Inclusion (DEI) Officers.

We understand why this happened, also understanding that many companies have started pulling back or pulling out of initiatives that were commonplace in 2020. BlackRock and Meta are just two prominent examples, with ESG- and DEI- related initiatives not proving to be what shareholders want or making them better off.

But what about the next trend to come? Will the C-suite have to shrink?

I wouldn’t bet on it. As a four-time CEO, companies I know face a much more complex challenge today: The business environment, which has generally been supportive and benign, is getting bumpier and more dangerous. The U.S. Economy is overdue for an “adjustment” and perhaps even a recession. The path through government debt and deficits, a rearrangement of global trade, and new technological trends is unclear. Artificial intelligence will create entirely new categories of winners and losers, forcing people to add new skill sets and cope with displacement. In the process, C-suite leadership becomes all the more important.

Clarity in C-suite roles

Business advice is a dime a dozen, but not necessarily right. Most prescriptions lean into fuzzy buzzwords like “increased collaboration” without addressing the lack of role clarity in overlapping job responsibilities. Adding a Chief Human Resources Officer to the C-suite to rearrange the skill mix is another common prescription, but solutions need to be crisper and driven by the urgency that it will take to get ahead of the current waves—and not be capsized by them.

Leading a “non-linear” change agenda is challenging, but there are three key principles that must work in parallel:

1. Bring clarity to the outcomes necessary for survival; communicate broadly about the plans, strategies, and milestones as you and your teams commit; and keep the sense of urgency high.
2. Define C-suite roles unambiguously and with authority, so accountability for success or failure is attached to individuals, and allow those leaders to determine the level and form of collaboration needed—without presuming one style fits all.
3. Define all roles exclusively in terms of output, not process.

There are only two types of output that matter in the C-suite:

1. Making the product competitive while growing the customer base and satisfaction.
2. Building capabilities that prepare for where the world is heading.

On the first point, profit centers can be based on geography, customer type, or product groups, but the leaders in charge should have the profit and loss responsibility that sums to the company as a whole—they live at the front of the battle lines, seeing wins and losses in real time. On the second point, the most significant change will come down to dividing the Chief Technology Officer role (technology is a process, not an output) into three distinct jobs:

• The technology needed to match competition on product features and customer share, service, and connection.
• The technology needed to improve workforce and product productivity, and finding the skilled people to do that, determining which part of the existing workforce can be reoriented and retrained to contribute to that outcome.
• The technology needed to keep data and processes secure, reliable, and capable of meeting the current and anticipated demands for compliance and transparency related to risk threshold.

Southern Company is a case study for this kind of organizational clarity. Leaders of geographies—electric and natural gas utilities—have substantial autonomy as well as accountability. They are supported by two other line units: One in charge of power generations and another that operates transmission, storage, and backup for renewable energy. And they avoid common support functions so each line unit is tailored to their own challenges and cultures.

Put it all together, and the C-suite’s current challenges have little to no historical precedent. Most current executives have grown up in a “peacetime” economy with consistent tailwinds and protections from the most destructive forms of competition, and Americans have had consistently better weaponry —including technological superiority—at our disposal than most rivals.

The result? We could afford to take on process-focused tasks related to DEI or ESG that were unconnected to winning.

Leadership strategy

Looking ahead, the C-suite should recall U.S. Military organization when faced with a world war. Generals were assigned responsibilities for specific theaters of operation to engage the other side, and other generals were tasked with building the winning weaponry to protect our troops and our territories (infantry, armor, artillery, air power, and so forth) so that the field “chiefs” and commanders could pick the right mix to survive and win.

In a time of rapid, discontinuous change, the proper mindset is to “try it, fix it, try again.” Leaders running process-based functions have a mindset that, if the process is followed, the solution will follow too. And that may work when known problems are being solved. But, war presents unknown problems, and only the line managers know what’s working and what isn’t. 

The days of peace are over, so it’s time to refocus the C-suite. That means putting it on a war footing.

The opinions expressed in Coins2Day.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Coins2Day.

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