5 Critical Challenges Facing Every CEO
Companies face multiple challenges, all of which come down to these basic questions. How can the company address the challenge of growth in a marketplace defined by rapid technology challenges and a shifting cultural landscape? How does the company remain relevant and continue to bring value to your customers and the marketplace? How can one build and manage effective, accountable sales and marketing organizations that drive dynamic revenue growth? How does one develop a collaborative culture of success?
Put another way, how do I grow value in my company? CEOs in 2021 are faced with five critical challenges.
Finding Growth
Balancing and Taking Calculated Risk
Leveraging Technology to Drive Efficiencies
Pursuing Innovation to Remain Relevant in the Marketplace
Developing a Culture by Design
Finding Growth
Growth is a high priority for most CEOs. According to the KPMG Global CEO outlook survey, the majority of CEOs surveyed said growth was even more important than achieving cost efficiencies.
The IBM Global C-suite Study found that CEOs of more successful companies are highly focused on growth, including launching new products or services, finding new business models, cultivating deeper customer relationships, pursuing innovation as a long-term strategy, expanding geographically, and creating deeper ecosystems.
The risk of standing still is greater today than any earlier time. Standing still as the marketplace moves forward means your company is going backwards.
Balancing and Taking Calculated Risks
CEOs see danger in just maintaining the status quo. To achieve growth, CEOs believe they need to be more aggressive about taking on risk. In fact, according to KPMG, one in three CEOs think they are not taking on enough risk as it relates to their growth strategies.
Competitive threats from both new market entrants and established competitors are compelling CEOs to have more appetite for risk, including finding ways to move more quickly into new product and services areas and regions. In many cases, the risk of standing still may be greater than the risk associated with change.
Mobile, social, and cloud technologies were cited as those having the greatest impact on their enterprises.
Leveraging Technology to Drive Efficiencies
CEOs report that technology is a critical differentiator, regardless of what industry or segment they work in, according to the IBM study. Mobile, social, and cloud technologies were cited as those having the greatest impact on their enterprises. In the KPMG study, CEOs cited disruptive technology as the third-most important issue facing their companies. In addition to opportunities, CEOs are concerned about disruptive technology from competitors upending existing business models.
More than two-thirds of CEOs surveyed by PwC view data and analytics as technologies they need to adopt more broadly—and that will drive the most benefits. Still, CEOs haven’t fully mastered how to best make use of data to drive business outcomes, and report they’re looking to their teams to leverage information to make better decisions.
According to PwC, “Winners in the innovation game . . . will be those that harness technology and innovation to deliver products and services that are cost-effective, convenient, functional and sustainable.” Technology is the avenue to reach additional markets, gain market and customer intelligence, and better engage with talent, and CEOs look to technology more for finding growth than cutting costs.
Pursuing Innovation to Remain Relevant in the Marketplace
CEOs report that transformational innovation within their own companies must be a high priority, especially in an environment where new market entrants can quickly rise up and challenge existing business models.
IBM found that 58 percent of market-leading CEOs pursue disruptive innovation, not purely incremental improvements. According to its study, “pioneers aren’t simply tweaking existing products and services; they’re reinventing their firms.” These CEOs also value agility and experimentation and are more willing to accept failure as a precondition to success.
Increasingly, transformations need to happen simultaneously across multiple parts of the business, requiring organizational agility, a willingness to change, and embracing innovation as a core competency. CEOs view innovation as a long-term strategy, not a short-term way to “fix” parts of the business.
To get the right people attracted to their organizations, CEOs realize culture must also be a priority.
Developing a Culture by Design
CEOs cite hiring the right talent as a priority. In the KPMG study, 78 percent of CEOs said they expect to increase headcount over the next three years. Yet they also worry about finding the right skills, and potentially having to retrain existing teams to develop new talents.
Yet to get the right people attracted to their organizations, CEOs realize culture must also be a priority. According to the KPMG study, “Having a purpose that employees can align to, providing the skills and opportunities to learn and grow, and building an inclusive culture are all critical to attracting and retaining the best talent, which in turn helps drive innovation initiatives that drive the business forward.”
Culture can also impact the bottom line. Suppliers and customers are looking at how companies behave in the wider social context and will make business decisions based on a broader set of criteria than traditional metrics of functionality or cost, reports KPMG.
There is an underlying challenge facing every CEO. They are limited by their own perspective and those of their executive team. Hence, the need for almost every CEO to garner the perspective of their peers and professional management consultants. Trial and error is a steep and rugged road to take to business transformation. It is costly and often leads to failure.
