May 14 2013
The AESC and BlueSteps recently had the opportunity to speak with Clarke Murphy, CEO at AESC member, global executive search and assessment firm Russell Reynolds Associates.
BlueSteps: Hi Clarke, we last met up in May of last year when you and Peter Felix, AESC President, joined in a discussion for the AESC’s podcast series on the executive search industry. You had recently stepped into the role of CEO at Russell Reynolds Associates. How has the past year been for you and your firm and what is your outlook for the year ahead?
Clarke Murphy: This has been a defining year for Russell Reynolds Associates. From the launch of our Digital Transformation Practice to the establishment of our China Desk—two of our industry’s first such initiatives—we are seeing an increased need for resources that transcend traditional categories. Today’s business opportunities and challenges are far more complex and we are responding in kind. We want to make sure that we continue to help our clients build the most effective boards and leadership teams to leverage the opportunities and meet these new challenges.
One of the biggest drivers of growth for our clients is digital. Digital innovation and technology continue to transform virtually all businesses across all regions of the world, and we are seeing an imperative for our clients to acquire and develop digital expertise at the highest levels. I am pleased that we have taken a leadership position in this space and look forward to continued growth in 2013.
BlueSteps: As you mentioned, Russell Reynolds Associates has just launched the search industry’s first fully integrated Digital Transformation Practice. What was the vision behind this new practice?
Clarke Murphy: Digital expertise is no longer optional for corporate leadership. Every conceivable industry sector is compelled to leverage digital technology as a means to communicate and interact with their customers, create new supply chains to deliver products and services, harness data and information about customers and outcomes—it touches every aspect of business. As a firm, we have seen this translate to tremendous growth as demand has grown for leadership with expertise in digital’s key drivers—social, mobile, big data and cloud computing.
Our vision for the Digital Transformation Practice is simple—to help our clients understand the digital revolution as it applies to their specific business goals and strategy, and help them recruit, develop and retain digital talent that can successfully lead them through their own digital transformations.
BlueSteps: What specialty and functional areas does the new practice include?
Clarke Murphy: The digital transformation itself has no boundaries, unlike our industry’s traditional sector approach. Our clients’ desire was that we integrate our expertise in digital board and C-suite leadership across all of our sector and functional practices. We are seeing demand from traditional, non-digital sectors including healthcare, automotive and financial services, as well as pure-play digital areas including digital media, e-commerce, mobile technology and social media.
In terms of assignments, we are seeing increased demand for senior executive roles to help define the digital strategy at most companies, including Chief Data Officers, Chief Digital Officers and Chief Technology Officers. At the board level, there is demand for digital expertise to help provide oversight and help define the organization’s digital strategy.
BlueSteps: What does the word “digital” really mean for businesses today?
Clarke Murphy: We think digital defines business today. It is a transformation that cuts across every aspect of how companies engage externally and operate internally. It is innovation in the form of social media, mobile devices and apps, big data and cloud computing that rewrites the fundamental rules of business.
“We are seeing increased demand for senior executive roles to help define the digital strategy at most companies, including Chief Data Officers, Chief Digital Officers and Chief Technology Officers.”
Sellers can target buyers with new levels of specificity, and buyers benefit from greater transparency and access to information in the buying process—in both consumer and business-to-business environments. Allies become competitors and competitors become collaborators. What was once sold is given away, and what was once given away becomes a liquid asset. Digital innovation provides growth opportunities for companies of all sizes, from every conceivable sector.
For example—one of our clients is an international insurance company who recognized that leveraging their vast stores of data could be the key to transforming their business. They had valuable information scattered across different business lines that could be used to make important underwriting, risk management, marketing and relationship management decisions. We worked with them to find a Chief Data Officer who could drive the data analysis initiative across the firm. This digital leader came from outside of the traditional insurance/financial services space—the successful candidate had spearheaded the use of data and analytics to improve patient outcomes for a healthcare organization. The insurance company is now building out their data and analytics capability with several additional senior hires with expertise to help drive the broader digital strategy.
BlueSteps: Digital transformation is of course not just about the technology sector. What industries and what functional roles are being impacted most by digital disruption?
Clarke Murphy: While transformation is taking place across the board—sectors like education, healthcare, and automotive provide clear examples of the type of change we have seen in the past year.
“The influence of mobile and social on organizations has created the imperative for senior marketing officers to possess a keen understanding of digital marketing channels and how to apply data and analytics to branding, marketing and customer service initiatives.”
The fundamental infrastructure of education has been transformed by digital technology. Online and mobile are driving comprehensive, disruptive change from pre-kindergarten through high school, university and life-long professional education.
In the healthcare industry, digital technology is ideally suited to address the complexities of performance and outcome-based payment models that require healthcare providers to seek analytics and track outcomes. Digital technologies are essential to achieving increased quality at lower costs. There is a pressing need in healthcare for leaders that can integrate these capabilities successfully in an industry historically resistant to change.
The automotive industry is leveraging digital technology to develop sophisticated “connected vehicle platforms”—the combination of GPS, wireless and other technologies that bring new entertainment, communication, navigation and safety features to car buyers is essentially turning cars into mobile devices.
Successful transformation requires enterprises to fully embrace digital across all levels and titles. It is a leadership discipline, not merely a specialized department. Top-level executives must embrace digital transformation. CEOs must be conduits for digital leadership, effectively communicating the digital strategy to the entire organization, investors, analysts, customers, and extended stakeholders. Boards need to be fluent and experienced in digital, to provide effective governance in what is now a strategic imperative for the business.
BlueSteps: What are some new functional roles emerging out of the digital transformation?
Clarke Murphy: The digital transformation of business has created the need for more specific areas of expertise, regardless of industry sector: The rise of the Chief Digital Officer is perhaps the most rapid, and the most influential role—these leaders work closely with the CEO, the board and the senior team to define the digital strategy, and to help integrate digital throughout the organization. Chief Data Officer is a pivotal role that sits at the intersection of IT, Marketing, R&D and the organization’s supply chain, responsible for leveraging newly available data and analytics for customer insight, revenue, growth and profitability. Another key role is the Digital Marketing Officer. The influence of mobile and social on organizations has created the imperative for senior marketing officers to possess a keen understanding of digital marketing channels and how to apply data and analytics to branding, marketing and customer service initiatives. In the last year, all of these digital experts have solidified their roles in the C-suite.
BlueSteps: Everywhere we look these days, in the news, on the blogs, it seems we are hearing about or reading about big data? What is the effect of big data on the search industry?
Clarke Murphy: The promise of big data is to help companies better understand and interpret customer interactions. In the search industry, we are seeing a definitive increase in demand for leaders that not only understand data management and analytics, but who can leverage this information in real time to make decisions that best position the enterprise for sustained growth. As with all digital positions, this imperative is also having a ripple effect, driving demand for analytics-focused talent beyond the C-suite. For example, our Retail business has grown enormously, but now Retailers seek senior leaders who are technologists, not traditional merchants or store operators.
BlueSteps: Explain to us how digital innovation is now an issue of strategy, and not just about using new technology platforms to improve processes.
“It is critical that board members help lead the digital transformation and engage with the CEO to develop the most effective digital strategy and talent—and a corporate culture that will support it.”
Clarke Murphy: Digital innovation has moved beyond process improvement to fundamental changes in how businesses generate results. Digital tools have dramatically altered how buyers and sellers interact, allowing for targeted outreach and unprecedented amounts of feedback. Also, tools such as cloud-based infrastructure have evaporated long-standing constraints on scalability and barriers to entry. Managing these changes effectively now defines how a company acts on a strategic level.
BlueSteps: The Russell Reynolds website displays the statistic that 72% of executives cite competitive pressure as a reason to begin a digital transformation. What tools and expertise are required of today’s senior leaders in order to handle digital transformation?
Clarke Murphy: The composition of each digital skill set may vary, but adaptability is essential. For many industries, e-commerce and transactional expertise is the price of entry for digital leadership. Marketing executives typically require a higher degree of expertise in social media and online marketing/SEO, with an emphasis on driving digital brand awareness.
Overall, a big prerequisite is the ability to understand and work well with transformative products and technology. Traditional ways of doing business are constantly changing because of digital, and leaders need to be knowledgeable and flexible enough to overcome challenges and take advantage of digital opportunities.
BlueSteps: Explain how digital has impacted boards of directors.
Clarke Murphy: It is critical that board members help lead the digital transformation and engage with the CEO to develop the most effective digital strategy and talent—and a corporate culture that will support it. Ultimately, boards will need to be able to understand the impact of digital transformation and expertise on the CEO evaluation and succession process.
Boards must therefore possess the relevant competencies, experiences and perspectives to execute their governance duties in the era of digital transformation. This has led to increased demand for “digital directors,” leaders with experience at pure-play digital companies, or digital experts who have helped lead non-digital companies through a digital transformation.
BlueSteps: What might be some emerging new functional roles in the next few years to come?
Clarke Murphy: Again, adaptability is essential throughout this transformation. Many of the functional roles rising out of today’s digital transformations have not been fully defined and will continue to change as best practices develop. It will be particularly interesting to see what roles develop in non-digital sectors such as energy, industrial, healthcare and automotive, as well as the next iteration of digital media.
As a search professional, this underscores the critical need to understand and leverage the value of human capital—perhaps the only element that remains constant throughout this digital transformation.
Thank you, Clarke, for providing a closer look at the new Digital Transformation Practice at Russell Reynolds Associates. We wish you and Russell Reynolds Associates great success for the year ahead.
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About Clarke Murphy
Clarke Murphy is the Chief Executive Officer of Russell Reynolds Associates and serves on the Board of Directors. Prior to his appointment as CEO, he was the Global Leader of the firm's CEO/Board Services practice.
While at Russell Reynolds Associates, Clarke has conducted a number of significant projects in the industry, including Board of Director searches for Wells Fargo, UnitedHealth Group, MSCI, and Calpine Corporation. He has also conducted CEO assignments for MasterCard, Harley Davidson, ARAMARK, Walgreens, and The Hartford, among others. In addition, he has led notable searches in the private equity industry including searches for the Carlyle Group and Warburg Pincus.
About Russell Reynolds Associates
Russell Reynolds Associates is a premier provider of senior-level executive search and assessment, serving clients globally for 40 years. We advise our clients on recruiting and retaining outstanding and impactful leaders, and help them mitigate the risks associated with senior level appointments.
About the Association of Executive Search Consultants
The Association of Executive Search Consultants (AESC) is the worldwide professional association for the retained executive search and leadership consulting industry. The AESC promotes the highest professional standards in retained executive search and leadership consulting through its industry recognized Code of Ethics and Professional Practice Guidelines. The AESC also serves to broaden public understanding of the retained executive search and leadership consulting process and acts as an advocate for the interests of its member firms.
BlueSteps is the exclusive service of the AESC that puts senior executives on the radar screen of over 8,000 executive search professionals in more than 75 countries, including China. Be visible, and be considered for up to 75,000 opportunities handled by AESC search firms every year. Find out more at www.BlueSteps.com.