1The New Rules of Engagement for the C-suiteACHIEVE COMPETITIVE AGILITYSTRIKING BALANCE with Whole-Brain LeadershipLong steady states of market growth and performance are interrupted by significant, disruptive ones that fundamentally reset “business as usual.” Think steam engine. Or mass production techniques. And more recently, AI and machine learning. Today, were in one of those periods of frame-breaking change. Leaders across all industries and geographies are being challenged to solve complex business problems in new ways, with different constituents, at a new pace and scale, and with bigger consequences than ever before for getting it wrong. Its business as unusualTHE NEW RULES OF ENGAGEMENT FOR THE C-SUITE2The New Rules of Engagement for the C-suiteAbout the AuthorsPeter LacySenior Managing Director Accenture Strategy Peter leads the Accenture Strategy business in the UK and Ireland. He is a member of the Accenture Global Leadership Council and leads Accentures relationship with the World Economic Forum and its Digital Transformation of Industries program. Peter advises leaders of Fortune 500 companies and public organizations on issues related to strategy development, digital transformation, innovation and acquisitions. Peter is based in London. Alberto ZamoraManaging Director Accenture StrategyAlberto leads the Accenture Strategy business in Spain, Portugal and Israel. He advises clients on the development and implementation of new business strategies and operating models, as well as digital, cost management and customer transformations. He has worked across a range of industries, including consumer goods, retail, infrastructure, transportation, utilities, and oil and gas. Alberto is based in Madrid.Katherine LaVelleManaging Director Accenture Strategy Katherine leads the Accenture Strategy Talent & Organization business in North America. She helps organizations develop and implement workforce transformation programs to improve employee performance and deliver bottom line results. She specializes in merger integration, operating model and organizational design, HR strategy, sales and service performance, and business-driven learning. Katherine is based in Washington, DC.3The New Rules of Engagement for the C-suiteBring balance for successThis change is being driven primarily by the exponentially sinking cost of data and the simultaneously rising need for advanced analytics capability on one side. And on the other, a demand for more human-centered approaches required to tap into the full potential of employees and consumers. At an enterprise level. These two spheres the scientific on one side and the humanistic on the otherare what conventional wisdom refers to as “left” (scientific) or “right” (creative) brain thinking. Although neuroscience deems those labels too facile, its safe to say that todays business landscape demands nothing less than a “whole-brain” approach. Just as companies can no longer afford to excel on one parameter operationallytodays market conditions make it “a must” that they focus on growth, profitability, sustainability and establishing trust with stakeholdersleadership can no longer remain unidimensional when it comes to the orientation of their skills. They need to be adroit at the “art” of people and the “science” of business. Or pay a price. In fact, our research with more than 200 C-suite executives and over 11,400 employees and consumers in China, France, Germany, Italy, Spain, UK, and the US found that leadership teams that actively acquire, deploy, demonstrate and embed diversifiedwhole-brainthinking across the enterprise fare better financially than those that dont. How much better? When it comes to revenue growth, 22%, and 34% when it comes to profitability growth, as measured by EBITDA1. And we identified accelerators to achieve that new state.In our research, we focused not on the “why” or the “what” of disruption, but on the “how” leaders need to respond. We see these tensions playing out in the C-suite regardless of industry, market or demographic. At stake for leaders: retaining relevance and credibility as individuals and as teams. Our research set out to test a hypothesis: that there are personal and bottom-line benefits for leaders who proactively reskill and bring in outside talent to achieve the end goal of honing a well-rounded set of leadership skills. Todays operating environment is more complex. There is a compounding effect of market conditions, political stress and regulatory intervention that takes the complexity to a considerably higher level than we operated in lets say 10 or 20 years ago.Board Member, Banking / UK4The New Rules of Engagement for the C-suiteOne of the clear indicators that we are facing a profound moment in time: pressures are compounding and converging on the C-suite like never before. Emerging technologies. Shifting customer demands. New market entrants. While these pressures are not new, the C-suite reports that the complexity and intensity of disruptive forces are increasing. It is this combinatorial effect that is making this time in history so uniqueand so very challenging.The disruptive impact of new technologiesthe ever-present, evergreen issueis increasing in impact and intensity according to 85% of the C-suite executives we spoke with. Nearly three-quarters report that the disruptive impact of constantly shifting customer demands and new market entrants has increased over the past three years. And adding to this constellation of pressures, our research reveals a further potentially destabilizing force that if embraced could be an accelerator and guide to the type of change being demanded of the C-suite: a “supergroup” of employees and customers. We call them “Pathfinders.” (Figure 1)85%Say disruptive impact of new technologies has increased72%Say disruptive impact of new market entrants has increased 74%Say disruptive impact of constantly shifting customer demands has increased62%Say investors are among their most disruptive stakeholders49%Say employees are among their most disruptive stakeholdersFeeling the pressureThe view from the C-suite:I would say, overall, the world is moving and changing more quickly than in the past, and that is impacting pretty much all industries. I see that as a big thing. Were encountering faster change everywhere. Institutional Investor / USA5The New Rules of Engagement for the C-suite“I value what benefits society.”EMPOWEREDNOT EMPOWEREDME WE“I can challenge companies.”“I cant challenge companies.”“I value whatbenefits me.”Agitators PathfindersDisenfranchisedIndifferentEmployees: 31%Customers: 31%Employees: 18%Customers: 21%Employees: 15%Customers: 19%Employees: 35%Customers: 30%Figure 1: The Pathfinders are a ”supergroup” of employees and customers that emerged from our research based on their motivations and perception of self-empowerment when dealing with the companies they work for and buy from.Who are the Pathfinders?6The New Rules of Engagement for the C-suiteThe super group with super powersIn our research, employees and customers broke out rather predictably in three quadrants that company leadership is familiar with and is adept at managing: “Agitators,” the “Disenfranchised,” and the “Indifferent.” And then there are the Pathfinders. The Pathfinder group emerged in that all-important upper-right-hand quadrant, a potential flash point framed by self-perceived empowerment and changes in motivators. Pathfinders are remarkable both for their characteristics and influence (Figure 2). For starters, their composition flies in the face of tropes about the new workforce and new-age consumers. Because theyre not all Gen Zers or Millennials. In fact, around half are 40 and older, placing them squarely among Generation X and Baby Boomers. Theyre balanced in other ways, too: 52% are women and 48% men. They are 50/50 customers and employees. They are significant in numbers, comprising a third of the total group of 11,000+ customers and employees we surveyed. They are defined by a mindset rather than simple demographics. They are future leaders and high performers. This group is expectingand demanding a very different leadership style at the individual leader and enterprise level. Ready to partner and help write the blueprint of the futureor ready to walk. This challenging group could be an onramp to the necessary change curve.Leaders who ignore this supergroup will do so at their own peril. New technologies have given them a disproportionate voice that is difficult to ignore. Seventy-nine percent of Pathfinders say social media has increased the power of their voice in the companies where they work. And 71% say social media has increased their ability to influence the behavior of companies they buy from. The transparency that new technologies enable has given them more choice. Eighty-seven percent of Pathfinders say its easier to find out about an organizationand the individuals they work for or would consider working for. Seventy-three percent say they have more options in the companies from which they purchase.The C-suite is not oblivious to the potential of this supergroup. Nearly three-quarters of Pathfinders believe they have the potential to destroy company value in the long term. The best way to fight fire is with fire. Taking the lead from the Pathfinders versus resisting or trying to out-maneuver them could provide leadership with the type of fire break they need to position themselves and their companies for success. And to make important new allies in the process. 7The New Rules of Engagement for the C-suiteNot generation specific48%40Both customer & employee49%Customer51%Employee52%Female48%MaleNot gender specificTheir composition defies conventional wisdomA group you cannot afford to ignoreHave clear and different expectations of leadership>2xas employees more likely to be on the fast track to leadership and possess critical skills84%as consumers more likely to be in the top 10% of household incomes57%as employees more likely to place a particular emphasis on working for companies who have a clear purpose they can relate to67%as consumers more likely to place a particular emphasis on buying from companies who contribute to societyThe supergroup: New best friend of a savvy C-suiteFigure 2: Pathfinders are defined by a mindsetnot traditional categories or demographics. This influential group poses both a challenge and opportunity for the C-suite.8The New Rules of Engagement for the C-suiteAfter all, Pathfinders possess significant power and influence. They are 84% more likely to be in the top 10% of household incomes, with massive spending power as consumers. And are 67% more likely to buy from companies who contribute to society. As employees, Pathfinders are twice as likely to be on the fast track to leadership and have the critical skills that enable them to choose the companies they work for. They are 57% more likely to work for companies that have a clear purpose they can relate to. And Pathfinders expect different things from leadership. They have a clear view of what they think are important skills and behaviors for C-suite leaders to possess. And they expect a well-balanced set of skills across both the right and left braina whole-brain engagement and management style. That style balances traditional, left-directed skills that draw on data and analytics with non-traditional, right-directed skills that focus on human-centered capabilities such as empathy, self-awareness and intuition, as shown in Figure 3. Aside from the generally accepted skillsets that we feel are required for the kind of senior positions that we have, the next thing that is high on the list is cognitive diversity. All the evidence says if you can get a better level of cognitive diversity you get a better outcome. You get better profitability. You get a better perspective on each problem that you are trying to solve.Board Member, Banking / UK When faced with a storm, a tree that doesnt bend becomes wood.” anonymousOur greatest strengths can often become our greatest weaknesses. The backstory of the majority of todays C-suite leaders isnt exactly a surprise: business school. Science. Tech. A whopping 89% hold left-directed degrees. Its a skill set that worked well in a world that was more linear than not. Driven by well-studied market forces. They mastered the science of management. Critical reasoning, effective decision-making and a results orientation are lauded characteristics of most of todays leaders and will remain valuable skills and capabilities. But not in and of themselves. Welcome to the “and” paradigm.Pathfinders have great expectations“9The New Rules of Engagement for the C-suiteAbility to influence, coachand empower othersCreative thinking andexperimentationAbility to synthesize diversethinking and viewpointsCreating an inclusive teamenvironmentBeing vigilant to theexternal environmentEmpathy and self-awarenessWillingness to embraceand enact changeIntuitionAbility to lead othersData analysis andinterpretationCritical reasoningResults orientationUnderstanding of new tech& having the right techskills to advise teamsHaving a clear vision andstrategy for the teamMaking tough decisionseffectivelyFigure 3:As employees, Pathfinders indicate that whole-brain skills and behaviors are important for C-suite leaders to have.Pathfinder “must haves” for C-suite leaders10The New Rules of Engagement for the C-suite