This piece was written in collaboration with Walter Montgomery and first appeared in the Science of Communication publication on Medium
A CEO’s to-do list is exhaustive, what with overseeing the operation of an organization, setting its strategy and direction, allocating capitol to fund its priorities and modeling its culture and values. Now add one more item to the agenda: helping stakeholders make sense of an ever more complex world.
For enterprises of all kinds it is, literally, no longer business as usual. In an age of digitization many of the perennial principles governing corporate behavior, such as GDP, productivity and economies of scale are coming undone. At the same time, rapid advances in technology are bulldozing conventional barriers to entry, forcing companies to take on rivals that were never previously competitors. Industries under siege include automobiles, advertising, television and finance.
Were these the only issues up for interpretation, that would be daunting enough. But management’s words and deeds are also being judged in the context of political, social and even environmental concerns. With their elected officials either unable or unwilling to tackle an expanding array of troublesome problems, citizens are looking to business to pick up the slack. According to the latest Edelman Trust Barometer (an annual gauge of institutional credibility), nearly two-thirds of global respondents say CEOs should “take the lead on policy change instead of waiting for government.” Some higher-ups are already feeling the heat. In reply to a PwC survey earlier this year, 38 percent of CEOs reported catching more pressure from employees and customers to take political and social stances
As difficult as it may be for top brass to wrap their minds around contentious matters, such controversies can be seemingly incomprehensible to diverse stakeholders. In a climate of uncertainty, anxiety, and sometimes fear, people are bombarded with far more information than they can process; much of it highly subjective or downright false. A 2017 Gallup/Knight Foundation survey found that a majority of Americans queried believe it is harder to be well-informed despite access to more news sources than ever before. One reason, argues neuroscientist Daniel J. Levitin, is that the torrent of news, notifications and social posts undermines peoples’ aptitude for critical thinking.
These then are complex circumstances CEOs must thoroughly understand and cogently explain to both internal and external audiences. Albeit some bosses are willing to directly address such situations, most are still not inclined to do so.
Complexity, after all, does not conform to executives’ need for control; nor to their preference for predictable outcomes. Those who earned their stripes in relatively stable environments are skilled at managing discrete problems that can be easily isolated and clearly defined. Thus, they have tendency to treat challenges as if they emerged from a single factor in a rather straightforward way. Yet they are not necessarily as adept handling the ambiguities of a hyper-connected and nonlinear world where colliding events can lead to intractable and unforeseeable consequences.
For others, it is a matter of perspective. Every CEO’s time and attention are finite, obliging them to laser focus on the most pertinent and positive input. Consequently, they may appear out of touch with much of society. In its latest annual survey of chief executives, PwC found that, based on their own companies’ improving prospects, a majority of business leaders are “enthusiastically bullish” on the state of the economy. This at a time when wage growth in the United States is anemic (paychecks grew 0.1 percent in April while inflation rose 0.2 percent) and an increasing number of men in their prime earning years are dropping out of the workforce. Moreover, fewer than one-in-five respondents believe their firms have lost the public’s confidence, in contrast to Edelman’s research, which calculated a 37 percent decline in trust across all institutions.
Given the apparent disconnect between what CEOs perceive and the context in which they do so, it is essential they get out of their comfort zones; if not physically, then at least psychologically. Aside from day-to-day operations that consume much of their thinking, leaders must consider what goes on outside the corner office to identify social, political and technological opportunities and threats. As economist Friedrich Hayek noted nearly 75 years ago: knowledge at the center of an organization is better coordinated and more efficient; though knowledge from the edges is more accurate and up-to-date.
But whom information and ideas come from is as important as where. With stakeholders increasingly defining themselves in terms of race, gender, age, education, income and ideology, executives ought expose themselves to the broadest possible array of outlooks. Nonetheless, it is not necessary to venture too far, as much can be learned from those on the payroll. Today, nearly a third of American employees work remotely more than 80 percent of the time, subject to values distinct from corporate culture. Even more detached are the millions of contingent workers, whose numbers have risen as full-time employment has fallen.
Most importantly, however, CEOs have to appreciate that current circumstances compel a more comprehensive way of understanding and explaining a perplexing world. To that end they need to adapt a sense of, what has been labeled, integrative complexity. That is the capacity to embrace multiple disciplines and mindsets, and incorporate them within a flexible framework for doing business.
The good news is that is process is already underway. Some companies, for example, have begun experimenting with bringing together experts in behavioral science to effectively share knowledge across the enterprise and translate that into effective action. Concurrently, breakthroughs in neuroscience are making it possible to discreetly explore the human mind to recognize how and why people react to disparate forms of information.
Of course, it is incumbent on senior executives to not simply entertain these and other approaches but, when appropriate, also embrace them, even when they challenge beliefs, biases and conventional wisdom. Going forward they may have little or no choice. The world will certainly become more complex, and with it, so will business. And enabling stakeholders to make sense of it all should be near the top of every CEO’s to-do list.