In times of uncertainty and turbulence, CEOs face unique challenges that require strategic focus and resilience. To steer their organizations through these turbulent times successfully, CEOs must identify and prioritize key areas of focus. In this article, we explore six essential priorities that CEOs should consider to navigate turbulent times effectively and lead their organizations towards resilience and success.
In recent years, the business world has undergone unprecedented changes. The COVID-19 pandemic has resulted in a new reality, with new and potent disruptions that seem to arrive every other day. Managing complex organizations is now much harder than it was just a few years ago, and CEOs face the daunting task of deciding what needs to be done now and what can wait. In this regard, McKinsey has spoken with hundreds of CEOs this year and identified six priorities that feature prominently on CEO agendas worldwide. These priorities are the moves that leaders are taking to shore up defenses and gain ground on rivals, which is very different from the purely defensive agenda that many companies are following.
The first priority centers on an old-fashioned virtue: courage. With lots of indicators flashing red, business leaders may be tempted to pull back, postpone some initiatives, and scale back on growth plans. But the best leaders are ambidextrous, prudent about managing the downside while courageously pursuing the upside. These leaders are thinking about the next decade, not the next month. Many are spurring their organizations to rethink opportunities and reset the strategic gameboard in light of the current volatility.
HATCH NEW BUSINESSES
The second priority is venturing into entirely different sectors rather than going for greatness within a company’s industry. More than half of top executives consider business building as a top-three priority. They begin by setting the bar high and then protect the new business from business as usual. The most promising field for new-business building is in green technologies, with trillions of dollars set to be invested in the coming years. To claim a leading position in these value pools, CEOs need to endow new businesses with the assets needed for success.
The third priority involves mastering tech trends to find growth in software, build new businesses, and transform old ones. CEOs seeking to get maximum value from their digital transformation should build the necessary technology.
The fourth priority is staying the course for net-zero emissions. There is no doubt that the dependence on fossil fuels is far from over. The net-zero transition is taking off, and business leaders need to adapt, mitigate, and knit these concepts into a vehicle that goes from zero to net zero.
REBUILD THE EMPLOYEE EXPERIENCE
The fifth priority is to re-engage employees. The contract with workers has become a little too transactional in recent years, and CEOs need to find a new plan of engagement. CEOs need to think hard about the office of the future, a place workers want to be—to see friends, riff on new ideas, and find enough meaning in their work to get them through the next week of pallid video calls.
Finally, every CEO's overriding question today is, 'how resilient is your company?' The pandemic has asked companies to move much faster, and now inflation seems to be here for the duration, causing companies to deploy their newfound speed across all six dimensions of resilience: finance, operations, technology, organization, business model, and reputation. US and European companies are responding slightly differently.
In conclusion, following these six priorities can help CEOs navigate through turbulent times. By being both bold and prudent, building new businesses in green technologies, taking advantage of technology, staying the course for net-zero emissions, re-engage employees, and focusing on resilience, CEOs can achieve long-term success and prepare their organizations for a better future.