WHAT’S ON THE MINDS OF CEOs TODAY?
Today’s CEOs have a lot on their minds. Buffeted by the Covid pandemic-now-endemic, they have led companies through significant economic, political, and social disruptions. As business and society become more intertwined, corporate leaders are having to address social challenges such as ESG/sustainability, DEI, and others. The CEO job description has expanded beyond day-to-day business and keeping the Board and shareholders happy, to include a wider list of stakeholders – employees, customers, suppliers, governments, and activists.
Pandemic is a Wakeup Call, Transformation is Imperative
In the EY 2022 CEO Outlook Survey of 2,000 global CEOs in 51 countries across 13 sectors, 86% report being significantly impacted by the pandemic. These leaders understand the imperative to act boldly, transforming their companies, so they do not fall behind in the race for market-leading growth. CEOs are looking beyond short-term pressures to invest in long-term value creation. Strategies include future-focused reconfiguration for resilience in the face of unforeseen crises, investing in existing businesses for organic growth, and active M&A to enhance assets in the areas of technology, talent, innovation, and ESG/sustainability.
Phillip Price, Managing Partner of IMSA Search Global Partners UK, says senior executives are challenged at every level every day, having to navigate the tensions between the short and long term. “We speak with CEOs and CFOs all the time. Recognizing and acting upon this dichotomy has and always will be the key to sustainability, growth, and longevity. Part of the downside of the constant drive for positive shareholder/stakeholder returns is that it may push a short-term approach.”
Looking Beyond the Company, Leading the Ecosystem
Demands on CEOs are increasingly complex given a constantly shifting business environment, competing needs of an expanded stakeholder list, accelerated innovations in technology driving new products and new markets, global political tensions and outright conflict, and the growing demands for social change. To be successful, CEOs must influence the ecosystem in which they operate.
Based on a survey of 105 board directors from 311 North American companies in 11 industries, HBR.com (6/9/2022) suggested some strategies for stewarding the ecosystem:
- Mentor and empower senior executives to shoulder more of the day-to-day
- Understand key contributors to the broader system and their interdependence
- Identify and unite ecosystem members around a shared objective
- Build public-private partnerships to connect the ecosystem for impact
- Anticipate the risks associated with engaging in social and political areas of interest
Optimism on the Decline
According to Fortune/Deloitte’s Summer 2022 CEO Survey of 116 global CEOs, optimism is on the decline and expectations for growth are lower than a year ago. Over 80% expect inflation to disrupt business strategies in the coming year, and the top concern is labor and skills shortages (59%). To combat the Great Resignation, CEOs are employing more human strategies, such as flexibility in work times and locations, and more career development and reskilling/upskilling, instead of financial strategies like increased pay and expanded benefits.
The End of Globalization?
The pandemic was disruptive on multiple levels. Manufacturing shutdowns, travel and trade restrictions, supply chain issues, product shortages pushed businesses to become more self-reliant. Multi-national companies and businesses with international supply chains have struggled with these issues for years in the face of rising nationalist movements, trade wars, and other restrictions. In a letter to shareholders, BlackRock CEO Larry Fink wrote that “the Russian invasion of Ukraine has put an end to the globalization [of the] last three decades.” (3/24/2022)
According to Phillip Price, “The Ukraine war, commodity shortages, and other negative effects are accelerating the pace of deglobalization. We are at the early stages of a decades long shift. We counsel clients about the importance of hiring senior talent experienced in leading through change. Recognizing that now will help businesses get ahead of the curve and set themselves up for future success.”
Stagility and Other Leadership Lessons
CEOs must manage many details simultaneously, with different elements emerging as urgent at different times. Like all of us they make mistakes. The best CEOs acknowledge them quickly, recover, correct course, and move forward, always with an eye to the future. McKinsey.com (2/23/2022) calls this “Stagility” – being stable and agile at the same time. Also, McKinsey’s survey of 67 CEOs suggests those who demonstrate resilience and humility, grounded in purpose, are able to reach out, learn from others, build a team that speaks truth to power and makes decisions together as a strong unit. The CEO is the leader of the team, sets the bold vision, yet values input that builds collective ownership.
Other leadership lessons include: Embrace the Board as a partner and source of expertise with multiple perspectives and experiences, not as a stakeholder group to be managed. To Be is as important as To Do, particularly in a remote work environment; be openly authentic, share your passions and fears, bring your entire self to work. Connect with big societal issues which align with your business; people are expecting you to lead society in addition to your company. Manage energy and avoid burnout, your own and your employees; in this era of 24/7 connectivity, AI, robotics, the pace is faster than ever; after every “sprint” make time to recover, recharge, regroup.
About IMSA Search Global Partners: With 50+ offices in 25+ countries on 6 continents, our 300+ Executive Search experts span the globe to identify the right candidates to successfully lead teams and organizations locally, regionally, and globally.