Senior Executives at Today’s Leading Enterprises Increasingly Focus on Developing People and Enabling Collaboration

In my research as a professor at Harvard Business School, I’ve been interested in the shift from top-down hierarchical controls to more fluid team-based structures for a long time. This shift is especially relevant in fast-paced, competitive markets where companies increasingly must rely on their employees’ ability to team up across functional and regional boundaries to innovate more effectively to serve increasingly demanding customers in new ways. I have argued that cross-functional teamwork, long recognized as vital to innovation, is today more about teaming than about creating formal teams. Teaming involves coordinating and collaborating in fluid configurations – rather than in well-bounded stable teams, which are often impractical in global, 24/7 operations. 

Building on this prior work, I recently had the opportunity to collaborate with researchers at IBM on the Global C-Suite Study 2017, which surveyed 12,800 CxOs across diverse, competitive industries about their priorities and views on the future. One key finding is that executives from leading companies were significantly more focused on developing people and cultures, compared to their counterparts and to their own views in the past.

Specifically, the study finds that forward-thinking CxOs are especially committed to creating organizational structures and operations that support collaboration and experimentation. By recognizing the limitations of top-down control in highly uncertain and dynamic environments, these leaders are shifting to structures that foster autonomy and enable employees to shape their enterprise’s strategic direction. A key focus of these market leaders is indeed the creation of fluid work structures to enable cross-functional teaming. They understand that this only happens when the company as a learning culture that supports speaking up and taking risks.

These forward-thinking executives (27 percent of the population surveyed) report that they outperformed their peers in both revenue growth and profitability over the past three years and lead their industries in innovation. Called Reinventors in the report, they were far more likely than their counterparts (called Practioners and Aspirationals) to recognize the value of talent and ideas to their future success. They cite a renewed focus to re-train employees and help them become more willing to experiment, fail fast, and feel empowered. Specifically, they are more likely to report emphasizing a dynamic vision, an open culture, and agile operations.

In fact, “people skills,” including the hiring and training of talent, was the biggest single riser in the survey—jumping from fifth to third place in its importance in only two years. Notably, the analysis of IBM’s C-suite studies from the past 13 years pointed to a recent substantial rise in valuing people skills. Where business leaders were once more concerned about skills gaps, such as technology skills, they are now more concerned with people skills.

Many of these market leaders are restructuring their organizations’ cultures so employees have a greater opportunity to help shape the enterprise’s strategic direction. In short, the study suggests that leading companies are focused on restructuring work and culture in ways that promote talent development. One factor that distinguishes the Reinventor segment is their focus on culture. Notably, they believe that reducing bureaucratic layers of management and rewarding fast failure is crucial to helping employees explore and experiment.

The study points to the need for more research to show how developing people skills can be structured in organizations, and to measure the results of such interventions more effectively.

It sends a powerful and clear message – that people and culture matter – and provides welcome support for senior executives seeking to increase their own companies’ investments in interpersonal skills and cultural transformation as a key strategy for success in more challenging business environments.