CEOs, Here’s How to Lead in an Era of Constant Change
Change is difficult — and managing through it might even be more challenging. Yet, with today’s pace of change, CEOs have no choice but to be even more aggressive with their change efforts in order to stay competitive. To successfully lead their companies through change, today’s CEOs must take four actions: 1) Prioritize what matters most; 2) Invest in building trust with your stakeholders; 3) Simplify your portfolio; and 4) Prepare for shareholder activism.
Every year I have the privilege to meet with hundreds of CEOs and leadership teams to discuss their business. In the past year, nearly every leadership team I’ve sat down with is grappling with the need to make changes and drive transformation.
Inflation, geopolitics, supply-chain issues, labor costs, divisiveness, unsettled equity markets, and stakeholder expectations seem to “change the game” daily. These factors all make for uncertain times. Leaders are looking at their initiatives and broader business plans and exploring where adjustments and even larger changes are needed. In recent months, many CEOs I’ve spoken with feel as if they are focusing more on “downside risks” than “upside opportunities.” And leaders seem a little less confident and more skeptical about where the economy is headed.
Leaders are right to observe the changes afoot and recognize the need to manage through them. While the upside opportunity may not always be clear, it is definitely time to lean into change. Today’s pace and complexities will not wane; in fact, I predict they will only intensify. The leader of the (near) future must focus on how to change ahead of pace and how to bring their people along with them.
However, that is much easier said than done. Change is difficult, even when you’ve invested in large initiatives and put in the time and resources to align your operations and communicate to your people. The types of changes we see right now run the gamut and include: integration and breaking down silos; changing operating models to drive revenue growth and efficiencies; automating for efficiencies; and moving to the cloud to drive new revenue streams.
To be successful in this evolving environment, a CEO not only has to change their organization, they also need to be highly skilled in leading people through change. This requires four actions:
Agility is key in the shifting landscape. Engaging in scenario planning around key issues (think: China, Covid-19, supply chain, price elasticity, inventory levels, and other common boardroom topics from the first half of 2022) can help leaders position their organization to pivot quickly in a new direction when needed. Too many priorities are the enemy of focus and run the risk of doing a lot of things poorly or “just okay.” Even if it means pulling back on initiatives or pivoting the mindset of the company to focus on the right things, leaders have to prioritize what matters most to their stakeholders and do it well.
Trust is one of the most valuable assets a company can have during these complex times, and businesses are being challenged again and again on their trustworthiness.
