Every CEO encounters obstacles depending on their industry and the specific challenges their businesses are facing. But, while each business leader holds a unique position, there are similar issues that apply across every sector.
As the world’s largest CEO membership organisation, we have identified the key issues keeping business leaders up at night. These issues are also among the most pressing for a CEO to address if they want to ensure they are leading the business in a way that supports ongoing growth.
1) Talent management – Are the right people working for you?
Most CEOs are well aware of the issues they face when it comes to talent management. As industries have become increasingly complex, the demand for individuals who can fill vital positions has increased.
It’s not just performance where talent management has become a major concern for CEOs – there is also the importance of finding staff with the right personality to match the culture of the organisation.
Regardless of whether these talent management efforts are aimed internally or at external experts, finding the right people that suit your businesses thinking is essential.
TEC speaker Trudy McDonald suggests employing Pareto’s 80:20 rule; devoting 80 per cent of the effort involved with talent management to upfront work defining what skills a business is looking for and the remaining 20 per cent to subsequent screening and interviews.
Making this step a priority can ensure hiring and promoting the right people who fit the company culture. Trudy also emphasises that great companies understand that people are their largest asset and a major factor for ongoing business growth.
2) Rate of change – Is your business meeting the technology standards of the future?
Digital disruption and new communication channels are now an engrained part of the business landscape. For leaders, this change presents a significant challenge as businesses look to adjust their performance in light of new threats to their business model.
Social media is just one example of this shift, and one that didn’t even exist a few years ago. Risk management has become increasingly difficult for companies to undertake as information can now be spread instantly by many users.
This only adds further fuel that technology is an increasingly dominant part of companies’ overarching strategies. With this rate of change continuing to increase, the scope for issues to arise for a company is going to rise in kind. However, the increasing rate of change also presents an opportunity for companies.
This was explored recently by consulting firm McKinsey & Company, which argued that companies in the future will build “digital hives” to manage this technological growth. These hives allow businesses to harness clusters of knowledge from multiple levels within a company and channel them towards broader organisational goals.
3) Globalisation of markets – Are you taking advantage of the global market?
The world has certainly become smaller in recent decades and overseas markets are now closer than ever before. With the Australian government entering into multiple free trade agreements in recent months, the scope for issues to arise with businesses is only going to increase with time.
As overseas companies have even-greater access to Australian companies, the challenge is now for businesses to be competitive on a global scale, not just a local one.
At the same time, local firms are now looking for new strategies to expand overseas in order to develop new growth potential.
This was underscored by the Australian International Business Survey, conducted by the University of Sydney and the AusTrade. The most recent edition of the study reported that 74 per cent of respondents are planning on expanding to two or more overseas markets in the next 24 months.
These twin challenges of globalisation – pursuing an international growth strategy while also preserving local market share from international competitors – are going to continue to shape the performance of Australian companies.
4) Innovation – Are you operating in an innovative mindset?
It used to be that product quality and customer service were the primary factors that separated an average business from a great one. Now, companies that are truly successful are also those that are innovative and can find new solutions to the issues they are facing.
However, the number of innovation-active businesses in Australia is actually declining. According to the Australian Bureau of Statistics, the number of companies pursuing new products and services declined between 2011-12 and 2012-13, from 46.6 per cent of firms to only 42.2 per cent.
Innovation cannot be overlooked, with new ideas and insights improving the efficiency and effectiveness of a business. The challenge is more than developing an innovative product or service; but finding a course in this new business environment and then adjusting course when necessary to set your business apart from the competition.
5) Decision-making – Are you making the most informed decisions on behalf of the business?
Finally, decision-making is one of the largest and most enduring issues that CEOs face. Having to make-or-break decisions everyday when it comes to running a business; even the smallest decisions have profound implications. There are a number of personal biases – how quickly a person makes a decision for example – that can influence how well a business leader performs.
Good decisions are made when CEOs equally weigh the pros and cons, rewards versus risks, and probability of success versus failure. Out-of-the box decisions can sometimes be a recipe for disaster.
Unfortunately, many leaders are in the box when they should be out of it; and out of the box when they should be in it.
These are certainly the issues that are weighing on the minds of CEOs – are they keeping you up at night?