Reading an article on 2022 priorities for CEOs and the board by McKinsey recently reinforced my view that this is not just for large corporates, as so many people think. The priorities are equally valid for SMEs, too – especially those looking for growth in the years ahead.
So, what are these 5 priorities, and how might they apply to your business?
Sustainability – investors and shareholders are increasingly looking at sustainability issues before investing in a business. This, together with ESG reporting becoming widespread means it is now an essential consideration for business and is also a key component of the next point, Purpose.
Considerations include not just core elements of the business, particularly in higher-carbon environments, but also how to reduce carbon footprint throughout the organisation, as well as looking at other environmental and social concerns. All levels of staff should be encouraged to provide input on these areas so an overall strategy can be developed to address the key areas. The greatest success is found when companies look at sustainability issues at a topical level, rather than just having a very broad company overview.
No matter what your size today, it’s time for sustainability to be moved from the Marketing and PR home into the boardroom to ensure it becomes a core consideration with all strategy discussions.
Purpose – closely tied to the ESG issues mentioned above, what has become clear since the pandemic is the need for companies to operate a Triple Bottom Line of profit, people, planet.
In recent surveys, almost two thirds of US-based employees said the pandemic led them to reflect on their purpose in life with almost half saying they are reconsidering the work they do because of this. Some 70% said their own sense of purpose is defined by their work.
Worryingly, although 85% of executives and upper management agree they can live their purpose in their day-to-day work, among frontline managers and employees, only 15% agree, showing the massive disjuncture here.
With employees at purpose-driven companies being four times more engaged at work – a clear competitive advantage for these companies – it’s evident that having a clearly defined and lived business purpose, where companies match actions to words, can significantly boost profits while reducing costs associated with staff churn and lack of productivity.
There are examples of different approaches to creating purpose everywhere – here are three to illustrate this:
- Tesla might be an obvious one, having led the electric car drive and so having a clearly-stated purpose from the beginning. Initially it started as a luxury brand, but by introducing the Model 3 it moved electric vehicle ownership into the middle class, too, democratising it, in effect.
- BP is less obvious and shows how a company can change dramatically. An energy company for over a century, facilitating the use of petrochemical-based energy, it is now about “reimagining energy for people and planet” and has not only exited its petrochemicals businesses but announced a plan to shrink its legacy oil and gas businesses by 40% by 2030, to scale up its low-carbon businesses and become a net-zero carbon emitter by no later than 2050.
- Patagonia, the outdoor equipment and clothing company, is an example of how a company can continue to expand its purpose and sustainability. Although always vocal about how it avoided waste and pursued a green agenda, it has taken this a good deal further with its initiative “to save our home planet.”
Think about your business’ reason for being. What would the world lose if your company was not there? How does it contribute positively to the world today and what is your vision for this in the future – remembering that Triple Bottom Line of profits, people, planet?
Then ensure you have alignment of purpose with your people and company culture – it cannot just be words written on posters around the building, but must be integral to the culture. Processes, systems and performance metrics must all be tied in, too.
Digital Transformation / Cloud – much has been written about this over the past decade, but it’s still often viewed as something for big companies. In fact, smaller businesses can benefit even more than the big ones by moving into the cloud. There are no longer complicated issues like disaster recovery, cybersecurity, fail-safe networks and keeping your infrastructure updated to worry about as the cloud providers can ensure this for you.
This means reliability of your systems is improved, so greater productivity and customer satisfaction.
Your costs are reduced overall, too, as you are sharing facilities (and, often, hardware), you need less staff for your IT functions, less space (no more server rooms, etc.) and use less energy, too. You also improve flexibility as you can quickly and easily upscale as your business grows, or even downscale if you hit a bump in the proverbial road.
What this all means is smaller businesses get enterprise-level technologies, and so can operate on a technology par with their bigger competitors.
So, if you’re not already cloud-centric, look at doing this quickly, and take the opportunity of doing so to ‘clean house’ too – replacing old, creaky systems with those designed for your business today and tomorrow.
Talent Development and Retention – again, much has been written on this topic, especially this year with ‘The Great Resignation’ so firmly underway. For the past few months, resignations in the USA have consistently topped 4 million people per month and there’s no sign of this slowing (in fact, the monthly numbers have grown consistently each month since early this year). In many sectors, vacancies considerably exceed job seekers, and this talent shortage is going to continue to grow with the retirement of more Baby Boomers.
So, keeping your team motivated is key, for not only is replacement expensive in so many ways, but nowadays, is going to be tough to find. As Sir Richard Branson said, “Train people well enough so they can leave. Treat them well enough so they don’t have to.”
Speed and Agility Muscle – just as top athletes constantly train to keep in top form, so businesses need to keep their ‘muscles’ in tune. In the fast-moving times today, speed and agility are key for any business as what used to take a week a few years ago now needs to happen in a day.
To keep nimble, decision-making needs to be devolved, team sizes need to be kept small and flexible, and leadership must set and communicate throughout the organisation clear objectives and goals so that everyone knows where the business is headed.
Of course, plans must be flexible and consider the prospect of many potential scenarios to ensure you can capitalise on whatever comes along.
Keep these five areas clearly in mind when planning your business for the years ahead to ensure you’re well-positioned for the challenges you’ll face. And, as always, remember the board needs to be actively involved in all of this: it is legally responsible for business strategy and a strong board can add considerable advantage to the business and the CEO, too.
#BusinessFitness #2022 #Board #CEO #Governance #Growth #Leadership #Pandemic #Planning #Resilience #Strategy #VUCA
Some of my other, related, posts you might find useful:
- 3 Things You Must Do to Keep Your Top Performers and Your Company in Great Shape for the New World of Work
- Will Your Business Survive “The Great Resignation?”
- “Expect the best. Prepare for the worst. Capitalize on what comes.” – Zig Ziglar
- Is Your Strategy Fit for Purpose?
- How Independent NEDs Can Catapult Growth in a Small Business
- Know Your Company Role(s)
- “Opportunity doesn’t make appointments, you have to be ready when it arrives.” – Tim Fargo
- Pointers to a Successful Future for Your Business
- Leading Your Business Successfully in a VUCA World