Good morning,
The role of a C-suite exec continues to evolve.
“The job of an executive, I’m not just going to say CEO, has dramatically changed over the last few years,” Tim Ryan, U.S. chair and senior partner at PwC, told me. “We don’t think that’s temporary.” The change will continue over time, Ryan says.“The skill sets, the experiences, the approach needed in the C-suite today is very different,” he says.
So, what qualities do C-suite execs need to lead in the current macro environment and beyond? Ryan shared his top three:
-“Functionally understanding human capital is hugely important.” That includes recruiting, development, and “the importance of meeting employees where they are,” he says.
– “The next one is very simple,” Ryan says. “It’s the humility to embrace the fact that the world is changing and be okay with it. There’s way more than one way to meet the needs of customers.”
– “The last one is the courage to change the inside of companies,” he says. For example, large companies with more than 5,000 employees will strategically identify what they need to do, but he says they must pivot from decades of doing things the same way. C-suite leaders must have the courage to connect with every level of the company, use technology, and lead their executive, middle, and line management through “a change that honestly makes them nervous,” he says.
Building trust
Ryan spoke with me about the firm’s latest survey on trust that pointed to the need for these skill sets. The research showed a disconnect— 87% of business leaders think customers highly trust their companies when just 30% of consumers do. Meanwhile, 84% of leaders say employee trust is high, compared to 69% of employees. Consumers and employees are looking to the C-suite to lead more on trust.
This disconnect has been building over time. “The C-suite has been slow to see the changing preferences of consumers and employees,” Ryan says. An example? “Many of PwC’s clients are involved in making the ecosystem better,” Ryan explains. “They are involved in trying to make society better. And that clearly is important.” But what employees and consumers are concerned about right now is their day-to-day, he says.
Consumers appreciate ESG efforts. But at this time, the survey found it’s not a top driver of trust, Ryan says. However, “I wouldn’t recommend that companies stop investing,” he says. As affordable products and services are ranked as a top priority right now amid high inflation, companies must be transparent, he says. “What is their philosophy around cost?” he says. “What is their philosophy around profits in the short term and the long term?” Communicating that information helps build trust, he says.
Meanwhile, employees are focused on what it’s like when they walk into the office or show up virtually for their employer, Ryan says. “If they’re struggling to get the experience they’re looking for, I worry you’ll frankly get a false positive,” he explains. “That means they show up for work, whether that be virtually or physically, but their hearts and minds aren’t in it.” PwC recently announced its My+ People Experience for U.S. employees, he says. The $2.4 billion investment over three years in technology, benefits and wellness will allow employees to make personalized choices about their career journey and manage it on a smartphone.
The PwC survey also pointed to a shift in treating employees like customers. “Millions of people leave the workplace every year because they either can’t get what they want or presume they can’t get what they want,” Ryan says.
See you tomorrow.
Sheryl Estrada
sheryl.estrada@fortune.com
Quick note: The Trust Factor, a Fortune newsletter written by my colleague Jacob Carpenter, is launching on June 26. On Sundays, it will be a weekly examination of the critical role of trust in business and provide actionable steps for executives working to build and restore trust in their companies, industries, and communities. Here’s the signup page.
Big deal
Bank Director, an information resource for directors and officers of financial institutions nationwide, released the results of its 2022 Compensation Survey. About 98% said their organization raised non-executive pay in 2021, and 85% increased executive compensation. Of these, almost half believe that increased compensation expense has positively affected their company’s profitability and performance. The survey found that 74% of respondents said they increased starting pay for entry-level positions. Meanwhile, 64% said they increased pay for roles that are difficult to fill. And 59% promoted the company's brand and culture on the bank's social media platforms. The findings are based on a survey of 307 independent directors, chairs, CEOs, human resources officers and other executives of U.S. banks below $100 billion in assets.
Going deeper
4 Types of Business Transformation, a new report in Harvard Business Review, explains that transformations can take many forms and often occur simultaneously. Still, companies need to understand which approach to take. The authors clarify "four types of business transformation based on two dimensions: Is the transformation driven by internal organizational needs or external forces? And, what is the pace of the transformation?" according to the report.
Leaderboard
Blaine Davis, CFO at Protara Therapeutics, Inc. (Nasdaq: TARA), a clinical-stage company developing therapies for the treatment of cancer and rare diseases, will be leaving the company to pursue other opportunities. Davis' last day will be July 15, 2022. "Davis’ departure is not related to Protara’s operations, financial reporting or controls," Protara said in a statement. "As of March 31, 2022, the company had cash, cash equivalents and investments of $119M expected to fund operations into mid-2024."
Anselm Wong was named EVP and CFO at Janus International Group, Inc. (NYSE: JBI), a provider of access control technologies for self-storage and other commercial and industrial sectors, effective July 1. Wong will bring his 25 years of experience in finance leadership and strategy roles. He joins Janus from General Electric, where he served as CFO of GE Digital. Wong previously served as VP and deputy CFO at Resideo Technologies, where he was responsible for building a finance organization in connection with its spin-off from Honeywell International. Before that, he served in finance leadership roles at Honeywell for most of his career and held CFO positions for some of Honeywell’s business units.
Overheard
"Central banks should use their powers to drive the markets, and economy like a good driver drives a car—with gentle applications of the gas and brakes to produce steadiness rather than by hitting the gas hard and then hitting the brakes hard, leading to lurches forward and backward."
—Billionaire investor and Bridgewater hedge fund founder Ray Dalio wrote in a LinkedIn post on Tuesday, Fortune reported.
