A recent article on CNBC.com by Bob Moritz, Chairman of PwC, reported on the results of PwC’s 20th CEO survey. The survey of global business leaders identifies, and delves into, the top issues for CEO’s around the globe. In the article, Moritz summarizes the “four concerns that keep CEOs awake at night” in a world full of uncertainty and shifting circumstances.
Let’s take a closer look at the issues, discuss their implications, and explore the business hacks/solutions CEOs can implement to make their company more resilient and successful in a rapidly changing world.
“Being Ready to Flex in a World of Flux”
The Issue/Challenge
It’s getting increasingly difficult to predict what’s going to happen in the future. On top of this, there’s growing complexity and shifting ground associated with doing business in a global marketplace. Just to add to the challenge, it increasingly seems that external forces are acting in total opposition, making it difficult for companies to find the optimal balance. It’s no wonder that CEOs rank geopolitical and economic uncertainty as their top concern.
How Some CEOs Are Responding
Some CEO’s are focusing on strengthening their corporate purpose and are collaborating with government to tackle systemic change. Other CEOs are mitigating risk by changing the mix of the markets and geographies they are looking at when considering business expansion.
Here’s the Business Hack
While taking steps to mitigate risk is a wise move, the degree of uncertainty in the external operating environment makes it difficult to cover all bases effectively. CEOs who want to worry less need to put two processes in place in their company: one to gather timely and relevant information about the external environment and potential impacts, and another to determine if, and how, their company should respond (e.g. tactical or strategic changes). Because running these processes will be an ongoing requirement for success moving forward, it’s critical that CEOs focus on building internal capability and capacity to do this work – it’s not sustainable or advisable to routinely farm the work out to consultants. Organizational ability to pro-actively detect change and respond appropriately to uncertainty is a new critical core competency for business success and longevity – CEOs must begin directing investments towards building, strengthening, and leveraging this internal capability right away.
“Building Trust”
The Issue/Challenge
A growing decline in public confidence and trust in institutions is being felt by companies as well. Today, trust is a critical factor for business success – you just can’t have it without it. Gaining and retaining the trust of customers and employees is a critical challenge largely because the definition, and drivers, of trust have changed over time. For example, in the past, being friendly and welcoming might have been enough to build a loyal relationship with customers. In contrast, being able to assure and demonstrate the privacy of personal data and information may be the starting point for gaining customer confidence and trust in today’s digital environment.
How Some CEOs Are Responding
In many cases, businesses that effectively articulate their purpose, act transparently, and stand by their values excel at building and maintaining customer, stakeholder, and employee trust. In addition, businesses that understand that their role in society must be a key part of their mission, and take action by collaborating across sectors, borders, and markets, are more successful in engendering high levels of trust and support.
Here’s the Business Hack
It’s easy to say that business leaders must make integrity and transparency core values to live by – how do you actually do this? Be sure to put all business decisions through a company values “test” and make sure that the process, and rationale, for company decisions and actions is clearly articulated in discussions and communications. However, this alone isn’t good enough. These days, people generally want to be involved in the process of making the decisions that will have an impact on them. It’s no longer good enough to make decisions behind closed doors and expect people to accept and/or implement them with no questions asked. As a result, it’s important for companies and CEOs to begin engaging employees and customers in meaningful ways during the decision-making process and then show them where, and how, their input helped shape the ultimate decision. Giving people a seat at the decision-making table doesn’t mean ceding decision-rights inappropriately. What it does do is give CEOs the opportunity to bring more diverse insights into the decision-making process which usually leads to higher quality decisions, greater acceptance, faster implementation, and, ultimately, better business results.
“Tackling the Talent Challenge”
The Issue/Challenge
We’ve all heard about the “war for talent” but something is new. While most CEOs agree that they expect to face a skills shortage it isn’t in the areas you might expect. It turns out that the skills required for innovation include problem-solving, creativity, and emotional intelligence and these are the hardest skills to find and hire for.
How Some CEOs Are Responding
To find employees with the skills they need, CEOs are tapping into a more diverse hiring pool and looking across borders. However, the ability to tap into a global workforce may become increasingly difficult in a more protectionist environment. In addition, increasing gridlock in our cities can make attracting qualified talent an increasingly bigger challenge.
Here’s the Business Hack
Though business leaders say that they want to hire people with the key innovation skills, a quick look at job postings tells a different story. The emphasis continues to be on functional knowledge when hiring and less on transferrable capabilities and the three innovation-critical skills. Companies must make this critical shift in prioritizing skills and the CEO is the only one who can make it happen by clarifying expectations and providing executive sponsorship of the effort. In addition, making a successfully transition requires investments in the necessary infrastructure. This includes things like on the job employee training and professional development programs, informal mentoring opportunities, protected employee innovation and collaboration time, and collaboration technologies that help you engage people, and tap into their talents, no matter where they are.
“Re-imagining the Leadership Model”
The Issue/Challenge
Simply put, businesses and CEOs that ignore or fail to leverage people power and human potential, and don’t engage with multiple players to create solutions, will experience sub-optimized business growth.
How Some CEOs Are Responding
This is one of the biggest business challenges most CEOs face. Migrating to a leadership model that features collaboration and decentralized decision-making represents a massive paradigm shift that only a few companies have made successfully. With few models and roadmaps for success available to them, making the change can feel risky and hard to do for CEOs.
Here’s the Business Hack
Making the shift to a collaborative leadership style across an organization isn’t as easy as deciding that it’s time for a change. Organizations that fail to make fundamental changes in the way the business operates from an accountability and decision-making perspective will be unable to make the shift successfully. Once a CEO has made the decision to shift the leadership model, it’s critical to do an inventory of what else needs to change in the “system”. For example, will leaders require new skills to practice collaborative leadership? Will the business need new communication processes and vehicles for two-way dialogue? What changes are required to the governance model? Do role accountabilities and job descriptions need to change so that people deeper in the organization have new decision-making power? CEOs must gather and lead a team to complete this inventory and then develop the implementation plan that’s required to support the shift in leadership style. Implementing a focused set of metrics to measure and manage the roll out of the implementation plan, and evaluate the impact it’s having on enabling the leadership model shift, will be critical for making the change successfully.
In my experience, an unprecedented level of uncertainty is the #1 thing keeping CEOs up at night these days. While many of the circumstances driving uncertainty in the current business environment are beyond even the best business leader’s control, it is possible for any executive to take steps that will give them the confidence of knowing that their company is prepared to handle external volatility more pro-actively and capably. These high priority business hacks include:
- Making organizational ability to pro-actively detect, assess, and respond to changes in the business environment a new core competency;
- Engaging employees and customers in meaningful ways in decision-making processes;
- Re-prioritizing employee recruitment to focus on hiring for innovation-critical skills rather than functional skills first; and
- Developing and implementing a sound roadmap for making a successful shift to a collaborative leadership style across the organization.
Any CEOs who invest in putting these four transformational business solutions into place this year will sleep better at night soon – guaranteed!
Comments