What Keeps CEOs up at Night
February 6, 2017
Recently, PwC published its annual CEO survey, and the themes contained in it echo many of the same things that I’ve been writing about the past few weeks – issues of trust, leadership, culture and change.
Besides running huge, global businesses that demand continuous growth in an ever changing competitive environment, CEOs and corporate leaders are increasingly concerned about these four challenges:
- Being ready to flex in a world of flux. With so many “for sure” predictions having been blown away the past year (e.g., Brexit and US Presidential election), it’s harder and harder to know with certainty what awaits companies down the line. Accordingly, CEOs ranked uncertain economic growth and geopolitical uncertainty among their top concerns. Increasingly, issues such as income inequality, increasing digital connectivity, concerns about globalization, and climate change mean that CEOs are now dealing with multiple value systems, institutional frameworks and trading blocs – not to mention conflicting regulations and diverse employees. CEOs are focusing on strengthening their corporate purpose and collaborating with other institutions to tackle systemic problems. (See my prediction that there will be more focus on global corporate values as guideposts for local company action, and more business alliances formed to compete in the global marketplace in CSR Trends in 2017, January 9, 2017.)
- Building (not busting) trust. 58 percent of CEOs worry that a lack of trust in business could harm their company’s growth, up significantly from 37 percent in 2013. A significant number of CEOs think that gaining and retaining trust is harder in the digital era with information leaks and data breaches, and widespread skepticism among consumers. CEOs need to fully grasp the ethical and moral implications of their business decisions, and will have to communicate those decisions with honesty and integrity. According to the survey, the days of the CEO of a company being rarely accessible and receiving sanitized feedback are gone, as are the days of the uninformed consumer and the meek employee. (See my prediction that companies will be expected to lean into advocacy work, and that the days that companies can hide from controversies are gone in CSR Trends in 2017, January 9, 2017, as well asTrust in Corporate America, December 12, 2016.)
- Tackling the talent challenge. Three quarters of CEOs surveyed voiced concerns that skills shortages could hinder their company’s growth, but 52 percent plan to hire more employees over the next year. To achieve their talent goals, CEOs are increasingly looking across borders and tapping into a more diverse talent pool. While technological changes will make some jobs obsolete or redundant, CEOs are increasingly looking for workers who can manage and direct these changes in a positive way. One CEO stated, “Machines can be programmed to do the next thing right, but only humans can do the next right thing.” (See my prediction that companies that focus on the recruitment, retention and engagement of their employees will be those that succeed, and that the search for talent knows no borders in CSR Trends in 2017, January 9, 2017.)
- Reimaging the leadership model. These global issues require CEOs to rethink the role of business in society, and to better balance their social obligations with the long-term and short-term performance of their companies. Giving and receiving feedback, collaborating widely, and leveraging more decentralized decision-making will be core attributes of successful leaders, and these behaviors will drive cultural changes. (See Shaping Organizational Culture, January 23, 2017.)
Bob Moritz, chairman of PwC, concludes with the assertion that, “Leaders that live their values and scale them will create organizations with the resilience to navigate this complex, rapid-fire, disruptive world.” This statement is similar to the conclusion of the GEO Report in Shaping Organizational Culture, which suggested, “It [culture] is something that matters, and it has real impact on the ability of our organizations...to get better results.” Good words to live by in 2017.
If you have a question or comment, please follow me on Twitter at @timmcclimon and start a conversation there. Thanks for reading and sharing this blog posting with friends and colleagues.
P.S. I was honored to be named as one of the Top Thought Leaders in Trust by Trust Across America for the third time this year. The complete list can be found at www.trustacrossamerica.com.