Why Firms Should Look For The ‘Personal Touch’ In A New CEO
A new CEO will have a huge impact on the strategic direction and culture of the business, as well as the company-wide adoption of any new systems and processes.
New research, which examines the benefits to business of having a digitally connected leader, indicate that there are demonstrable commercial benefits to be enjoyed with this in mind, businesses should look to employ leaders who adopt a digitally connected leadership style which enables them to enjoy meaningful two-way conversations with consumers and staff via digital channels online.
The research examines how the CEOs of FTSE 350 companies are embracing digital technology and the benefits of this approach, known as the ‘Personal Touch’ leadership communication style. This is a two-way communication process, which places business leaders in direct contact with consumers and staff for the purpose of their brand, image and reputation management, through digital methods such as social media platforms or a blog. CEOs that employ a two-way communication approach, are enjoying higher levels of revenue and profit growth for their companies than those that do not.
In fact, the performance of firms with CEOs who are embracing this leadership style since 2009/10 have exceeded all other firms in the FTSE 350. This is demonstrated by annual growth rates in turnover and compound annual growth rate (CAGR) in turnover and profit. Additionally, Personal Touch firms recorded a CAGR of 27% from 2009 to 2012 and a rate of 30% for 2010 to 2012. This compares to a rate of just 9% from 2009 to 2012, and 13% from 2010 to 2012 by the next best performing group; corporate two-way firms, compounding the commercial advantages of the Personal Touch leadership style.
Most leaders who are already embracing this digitally connected leadership style joined their company in the last five years, demonstrating that the benefits of using this approach can be realised in a short timeframe. In contrast, CEOs using a one-way leadership approach, where they are emitting information but not responding on an individual basis, have typically spent six years or more at their company.
Organisations looking to appoint a CEO must recognise that their new leader should not be immune to rapid developments in technology and acknowledge the potential for growth that the various digital channels offer. Senior business leaders should interact directly with consumers and employees, and embrace a public presence in order to make their actions with stakeholders more relevant and engaging by actively listening to what is being said and responding in a one to one dialogue. Aside from encouraging customer loyalty and driving employee engagement, this type of communication is a great way to communicate with staff and inform them of any publicly-announced changes to the running of the business they should be aware of, such as new initiatives being introduced or developments within the business proposition.
Additionally, businesses should recognise the importance of an effective digital strategy and specifically appoint leaders who can capitalise on the opportunities that arise from the digital landscape in which they operate. A new CEO must understand that digital is no longer a tool solely at the disposal of the marketing department and recognise the significant gains that can be made in terms of stakeholder engagement and generating competitive advantage if a business leader is digitally connected.
The benefits of appointing an individual, who is willing to be the online figurehead for the company and maintain a digitally connected leadership style, should not be under-estimated. Leaders should interact with audiences, both customers and staff, to help them achieve their business objectives; however, it is important to note that accompanying characteristics such as charisma, sociability and authority are also essential.
Ultimately, it is imperative that any business looking to appoint a new CEO should be looking for leaders which possess the Personal Touch mind-set as it is the most digitally-connected, responsible and reactive businesses that will succeed moving forwards.
To download the full Personal Touch study, please visit: Sitecore.net/PersonalTouch