Mastering disruption: A CEO’s path to market leadership in 2024

Reprinted with permission from Fast Company after originally published on May 07, 2024.

Today’s CEOs face countless challenges—and opportunities—as they navigate changing market dynamics while maintaining profitability and embracing innovation. Tuck Rickards, managing director and global co-head of technology practice for Russell Reynolds Associates, outlines three key stages for the CEO  to survive and thrive in 2024.

Survive: Protect the Core Business

Your immediate focus as a CEO starts at home, Rickards says. It’s critical to prioritize profitable growth and margin improvement across all industries, especially technology businesses. The enormous market pressures of 2023 are continuing and expectations for businesses to change their operating cadence and pivot to more profitable growth, particularly from investors, will continue to ring in CEOs’ ears. Leaders must prioritize strengthening the core aspects of their businesses and driving efficiencies internally.

Beyond those immediate priorities, there is a new pressure emerging to accelerate growth through product line innovation. Rickards stresses that a critical layer to protecting the core business is to accelerate and diversify its growth rapidly. Looking at the data, the valuations of many software companies were more than cut in half, but the companies that have focused on improving margins and making necessary investments in their next-gen product offerings and platforms, such as Microsoft and Salesforce, have nearly doubled since their lows.

For CEOs aiming to survive beyond the immediate market complexity of 2024, it is crucial to develop a roadmap that includes strategic product changes, operational optimization and the integration of AI technologies. By embracing these approaches, CEOs can position their organizations for success in a rapidly evolving market.

Drive: Challenge the Future and Navigate Paradigm Shifts

The second critical layer to the CEO survival roadmap is planning for a future in a radically disruptive market. As AI continues to transform business in countless ways, companies have to plan for fundamental business model changes and long-term investments.

“AI is a very real, existential threat that CEOs need to own,” Rickards says. “They can’t outsource this like they did during the digital transformation.” Some companies have made this transition successfully, such as Microsoft under Satya Nadella’s leadership. Nonetheless, developing a comprehensive transformation agenda that extends beyond short-term objectives will be critical.

Rickards predicts that early adopters of AI will thrive as sector landscapes change radically and stragglers struggle to keep up. “Five years from now, the gaps and valuations are going to be enormous between those who played their cards well versus those who played them badly, or didn’t play them at all.”

“I’m very optimistic for the potential for value creation and reinvention of businesses for people who lean into this and pay attention to it,” Rickards concludes. “But I’m also very realistic about how hard it is to do in the context of managing end-to-end business transformation while flying the plane.”

Strive: Embrace the Bigger Picture

In addition to core growth and transformational agendas, true vanguard CEOs will be remembered for their leadership on broader societal and global issues, Rickards says, emphasizing the importance of toggling between operational performance and strategic initiatives. “The best leaders in the world aren’t walking away from important topics like climate change and DEI,” he says.

Businesses have an imperative to address societal and environmental concerns; companies that prioritize sustainability and diversity will be better positioned to attract top talent and drive innovation. By aligning corporate objectives with societal goals, Rickards says, CEOs can create a culture of responsibility and resilience that benefits not just their organizations, but also the communities they serve—and be remembered for it.

Along with all the opportunities, there are still challenges in balancing immediate profit pressures with long-term strategic moves. By elevating discussions around paradigm shifts and making incremental decisions within business constraints, CEOs can help ensure their businesses aren’t being left behind.

Thrive: Looking Ahead

CEO legacies are often most defined by transformative impact and positioning a team and organization for the future. Rickards points to thoughtful succession planning as a critical indicator of a business prepared for the future by its CEO. Through fostering a pipeline of potential successors through hands-on experience and collaboration, CEOs create an organization that’s built for impact and mastered disruption.

Authors

Tuck Rickards leads Russell Reynolds Associates’ Technology practice and is an Executive Board member at Fast Company. He is based in San Francisco.