Vistage’s Chief Research Officer, Joe Galvin, presents Vistage’s Q2 CEO Confidence Index Survey recapping our members’ opinions on the economy, financing, and the prospects for their own business. You can see the report here – “The First Steps of the Hard Climb to Recovery Begins.“
The survey shows that while CEO Optimism was one of the three lowest ever recorded, most CEOs are experiencing an increase in activity with the lifting of lockdowns. However, the survey data is before the initial wave was increasing in the South and West. I feel that we are “At the end of the beginning, rather than the beginning of the end.”
CEOs identified the most significant leadership challenges they face today, which fall into the following four categories:
- Morale. The most common theme shared by CEOs was maintaining and building morale with their leadership team and employees. It has been a very stressful three months for everyone, personally and professionally. The next three months won’t be any easier, which will challenge leaders to motivate a workforce with diverse needs. Priorities for leaders include keeping employees focused and positive, avoiding executive burnout, and inspiring the organization for the hard climb.
- Back to Work/ Work from Home. The pandemic has changed the workplace forever. CEOs have to redesign the workplace with physical health and safety as a priority, and also creates a feeling of protection for those employees returning to that workplace. Compound that with the broad acceptance of remote working as a proven option, which forces leaders to adapt their culture and communications to incorporate remote workers, engage in hybrid meetings, and accept that work-from-home is a permanent fixture in the new reality.
- Growth. Leaders need to crank the growth engine back on from a cold start. For 80% of businesses, revenue is down at some level since customers shut down or postponed non-essential purchases over the last three months. Creating new demand, re-engaging with customers, and rebuilding opportunity pipelines are all prerequisites to rebuilding business volume. Quickly adjusting to changed customer behaviors and shaping messages that connect to their new reality will accelerate the return to the growth curve.
- Uncertainty. Undercutting everything is the uncertainty leaders feel and face in every direction. There has never been a business scenario like this except in classrooms. Uncertainty about the pandemic’s length, the economic outlook, and the unknown impact on their markets are some of the difficulties facing leaders. Forecasting has become a black art once again, as pre-COVID financial models have lost relevance. The absence of data or clear direction will force leaders to rely on their instincts and judgment to make the best decision and be prepared to adapt quickly.
“Why don’t they use common sense?!” You may have said this phrase yourself, or heard it with your managers, when discussing an employee’s actions. However, the frustrated appeal to “common sense” doesn’t actually make any meaningful change in your organization. We all make decisions based on the information we have and the guides we have to use. So if the wrong decisions are being made in your organization, it’s time to examine the tools you give decision-makers.
You can only determine profitability when you know your costs. I’ve discussed before that you should price according to value, not hours. However, you still need to know your costs to understand the minimum pricing and how it is performing. Do you consider each jobs’ profitability when you price new jobs? Do you know what you should be charging to ensure you hit your profit targets? These discussions about a company’s profitability, and what measure drives profit, are critical for your organization.
If you were starting your business today, what would you do differently? This thought-provoking question is a valuable exercise, especially when it brings up the idea of “sunk costs” and how they limit us. A sunk cost is a payment or investment that has already been made. Since it is unrecoverable no matter what, a sunk cost shouldn’t be factored into any future decisions. However, we’re all familiar with the sunk cost fallacy: behavior driven by a past expenditure that isn’t recoupable, regardless of future actions.
Bringing clarity to your organization is a common theme on The Disruption! blog. Defining your business model is a worthwhile exercise for any leadership team. But how do you even begin to bring clarity into your operations? If you’re looking for a place to start, Josh Kaufman’s “Five Parts of Every Business” offers an excellent framework. Kaufman defines five parts of every business model that all flow into the next, breaking it down into Value Creation, Marketing, Sales, Value Delivery, and Finance.
Bringing in new ideas, thoughts, understanding, and logic is key as your organization faces the challenges of a changing environment. But when you do an ideation session in your organization… how does it go? For so many organizations, many times, after a few ideas have been thrown out and rejected, the thought process slows down very quickly, and a form of hopelessness takes over. How does your organization have better ideation? I’ve come across a new approach with a few teams lately.
An uptick in business has begun this quarter, and companies are rushing to hire to meet this surge in demand. What amazes me is how many are so unprepared to hire. Continual recruiting is key to the survival of a company. It isn’t the same thing as hiring—continuous recruiting is building a pipeline of people that you would hire if you needed to fill a position, or “A players” you would hire if they were available.
If your organization is focused on obscurity over clarity, whether intentionally or not, your “A” player employees are vulnerable. There is a looming talent crunch. As we start to emerge from COVID, demand is increasing, and many are scrambling to fill positions to meet that demand. Headhunters and recruiters are soon going to be calling your key “A” employees. Have you been giving them a reason to stay?
As Leonard Bernstein put it so well, “To achieve great things, two things are needed: a plan and not quite enough time.” Your meetings can be shorter, more fruitful, and engaging, with better outcomes for the organization, employees, and managers. It’s time to examine your meeting rhythms and how you set meeting agendas. This week, I break down daily, weekly, monthly, quarterly, annual, and individual meeting rhythms, with sample agendas for each.
Let’s start here: Why should your company be scalable at all? If your business is scalable, you have business freedom–freedom with time, money, and options. Many business leaders get stuck in the “owner’s trap”, where you need to do everything yourself. Sound familiar? If you want a scalable business that gives you freedom, you need to be intentional about what you sell, and how.
Companies are gearing up to hire. Unfortunately, many are competing within the same talent pool. Some experts are currently predicting a strong economic recovery starting in May or June. But as the economy booms, there is going to be fierce competition for talent. How will you fare in the looming talent crisis? Your organization should be creating a plan, now, so you can attract the talent you need in the year ahead.