People + Strategy Journal

Winter 2021

In First Person: Barry Salzberg

Barry Salzberg, former Global CEO of Deloitte and former professor at Columbia Business School, speaks about how to plan for an uncertain future, the way companies foster inclusion, and the success factors for CEOs and CHROs.

By Jeanette Gorgas
In First Person: Barry Salzberg

Overcoming the Fragility of Future Planning

Barry SalzbergBarry Salzberg is the former Global CEO of Deloitte Touche Tohmatsu Limited and a former Professor of Professional Practice at Columbia Business School. Salzberg spoke with People + Strategy Guest Editor Jeanette Gorgas about how to plan for an uncertain future, the way companies foster inclusion, and the success factors for CEOs and CHROs. 

P+S: What evolutions have you seen in the planning processes that boards and management have used over the last decade, even before the pandemic upended how many companies operate?

Barry Salzberg: If you go back to the start of the last decade, while strategic planning was a big part of a company’s operation, it was not comprehensive. It wasn’t embedded in the overall operations. There are significant, inherent issues associated with a process of that nature, including uncertainty—and a lot of people think it causes more chaos than it does good. 

Over the course of the decade, strategic planning processes were fine-tuned, improved and made more comprehensive. It became a significant hallmark of business operations—to the point where you would probably see over this decade many more corporate strategic planning officers being appointed. Scenario planning also became integral to strategic planning. This is a very different activity than strategic planning, but it is part-and-parcel of the corporate function of strategic planning. 

It became critical over the course of the decade to deal with competitive environments and changing regulatory landscapes, among other things. Embedded in both of these—strategic planning and scenario planning—was sensing and forecasting. This is a mechanism to assess what is happening—in the market, in the economy, in the environment, in the competitive landscape, et cetera—to proactively position the company to thrive in that reality. 

P+S: What aspects of planning and management processes are the most important ones for the challenges we’re facing?

Salzberg: Strategic planning, scenario planning, sensing and forecasting remain very important activities. However, when you are in the midst of crisis, whether it’s COVID-19, whether it’s racial inequality and the consequences of that to your organization and to society at large, contingency planning becomes a significantly important process. 

Many individuals don’t like contingency planning because it requires a lot of time and effort, maybe even money, and you’re always thinking that there is only a remote possibility of the circumstances you’re anticipating happening. With COVID-19, racial inequality and other complex challenges, contingency planning is extremely important to help make the right choices to achieve desired outcomes. What do we need to think about as an organization? What could happen to us? In the COVID-19 world, what would happen if we had a big outbreak again? 

Another process that is paramount today is talent workforce planning. You can put it in the context of strategic planning, contingency planning or scenario planning. The whole function of thinking about your people and the implications of everything on your people, on the workforce, on the workplace is probably taking highest priority. 

P+S: As a board member, if you don’t have those plans in place, how can boards assess performance of a management team in a situation like this?

Salzberg: In the absence of those plans, goals and objectives—and by the way, I can’t imagine many companies today not having plans and processes in place that are measured by the board—but where they either fall short or don’t exist, you could look at external metrics and data points to validate performance of both the company and the individual executives without looking specifically at plans. 

Those metrics and data points could include stock price, competitive data and 360 assessments of the management team. We’ve seen more of the latter recently, because valuable insights come from peers providing feedback on the performance of the CEO or other senior leaders, both to them and to the senior person who ultimately is responsible for evaluating them. 

P+S: Many strategic and contingency plans had to be thrown out the window over the course of the last several months. You’ve seen examples of the fragility of planning in your former role as Global CEO of Deloitte. What lessons did you learn from those experiences? 

Salzberg: Here are some of the reasons why planning is fragile. First, it’s fragile because the future is uncertain, and no matter how much planning you do, the data associated with what the future will be is unlikely to be the data when the future comes. You start off inherently uncertain about what it is you’re doing. That’s very uncomfortable. Therefore, it’s important when you’re doing strategic planning to focus on the broad parameters of your future—competitive, regulatory, economic, business, et cetera, and then fine-tune as best as you can. You have to remember that the fragility of planning is in the uncertainty of the process itself. 

Second, the aim is to think about your business in the future, not the precision of the planning process itself. Sometimes people try to hone in on a precise future in which they will be operating, but they should instead focus on broad factors and conditions that most impact the business—positively or otherwise. Then, when conditions shift, it’s easier to assess and adapt. Don’t aim for perfection, as that’s impossible. 

The third point is to focus on staying true to the mission and vision of your company. Many start the planning process with the right focus, and then they get mired in the numbers that the process gets dominated by those numbers, rather than guided by the concepts, desired outcomes and potential actions to shape and achieve the company vision. 

I’ve learned from practice in planning that I need to do these three things. I anchor myself in the fact that the future is uncertain; I make the process data-driven as best as possible without getting stuck in precision; and I stay focused on the mission and vision of the company. Going through this process and evaluating and predicting opportunities and challenges creates the value—not a step-by-step action plan. 

An important point in this process is inclusion. Diverse perspectives and inclusivity of people from within the organization at all levels is imperative in the planning process. You can’t just tell people the outcome of a planning process; they need to be engaged in it. While more companies are doing this, I’ve learned that you have to be patient; it’s challenging to involve lots of people in a process, particularly for senior executive leaders that want to take action. Including diverse perspectives is inherently a huge advantage of a well-executed strategic planning process.

P+S: Equal rights are in the spotlight now, as they deserve to be. Yet, this topic has been a focus for organizations for decades. Where did we fail in this effort, despite the right intentions, so that we can use those lessons to make lasting change?

Salzberg: There are many companies that truly focus on the value of diversity and equality—value to the organization, to its people, to its customers and to society at large. I do believe that all of us have implicit bias. Managing a large organization, with lots of perspectives, and striving to eliminate implicit bias from your thinking is no easy task. Let’s consider racial inequality. If you think you can just say something to resolve this long-standing issue, that’s ridiculous. 

First, companies have failed to keep their foot on the pedal on this topic. If you identify implicit bias, you must proactively address it over the long-term. You can’t declare victory. You can’t say, “Oh, we did this intervention and we’re great.” You’ve got to keep the organization clearly on a path so that the issue is front-and-center all the time. To do this, some organizations set goals and objectives and include diversity in a CEO’s goals. But you must embed diversity and inclusion into every aspect of operations in your organization. By doing this, it becomes part of who you are as a company and how you do business. When it is part of how you operate; you don’t have to stop and say, “Well, what should we do?” 

If the companies don’t get it right, they are not going to win. Their best people will leave or people won’t join them. 

P+S: What are your final thoughts on what it takes to be a successful CEO? 

Salzberg: Workplace and workforce planning are number one. I would be focused on what the new workplace is going to look like. I would consider—given the current state of things—how we redefine the workplace. How do we redefine our talent pool and manage that talent pool going forward to be even better than before? The companies that do this and invent the “workplace of the future” will be the winners. 

This includes considering the aspects of the office that make people most effective; the importance of relationships and how people work together; how to train and develop people when a good chunk of the workforce is operating and may continue to operate virtually; how to ensure that quality standards are met when the supervision is all technology-driven; how does artificial intelligence play into this, and more. Workforce planning and workplace definition is the new big thing.

P+S: What attributes have been added to your list of must-haves for CEOs? 

Salzberg: Because of what we’re dealing with now and what we can anticipate the future holds, you’d want a CEO to be adaptable, resilient and an evolved leader of people. 

You’d want them not to be fixated on the present and capable of—as the phrase in hockey—skating to where the puck is going, not where the puck is. That was always important, but I think being adaptable takes on heightened significance today. 

The second attribute—resilience—is equally important. Think about all the companies that are having operating challenges and even close to failing. Think about the challenges that global companies have when people are not able to fly or there’s a growing nationalistic attitude in many countries. Complex challenges abound. 

Finally, you’ve got to be an evolved leader. How you take care of people, how you manage and motivate people, how you drive diversity and environmental, social and governance (ESG). I know this attribute when I see it in a leader, and it is essential for any CEO today. 

P+S: What does a CHRO need to bring to the table that can help the organization achieve its long-term goals? 

Salzberg: Companies today need to engage CHROs as part of the business planning process, rather than as a support function. That is the way of today and increasingly should be the way of tomorrow. You need a CHRO who is not just “a people person” and able to manage compliance and other aspects of the HR function, but one who can be a meaningful contributor to the business planning processes—and be an equal business leader to help drive all of the many things that we talked about earlier. 

If I were hiring a CHRO today, number one on my list would be the ability to design and execute a business plan for human capital that accelerates the company strategy. 

Second, this person should also have the business savvy and sophistication to be an equal with other leaders in the company. The CHRO also has to be an out-of-the-box thinker; the most successful CHROs will be the ones that come up with new ideas and new visions for the workplace, in partnership with the leadership team. 

Finally, the ability to execute is high on my list. I love strategists, and certainly a CHRO has to be a strategic thinker, but they have to be able to lead every aspect of people operations—from hiring to performance management to training and development, diversity and inclusion. This is a broad remit, but at the end of the day talent is what drives the success of the company. The CHRO is our people expert and they need to be focused on moving the talent pool to the new world order, to the future of work. They’re at the very pinnacle of making the company itself successful. The significance of the CHRO role is completely heightened today.