CEOs who play it safe will be putting themselves and their companies at risk in 2018. It will be a year of dynamic change—from keeping up with new technologies to holding on to their best and brightest.
A cornucopia of challenges awaits them and the savvy, astute CEO will be the one who is aware of this and prepared for it.
Staying on the straight and narrow just invites mediocrity because it “leaves a lot of room untapped for success,” said Karen Brown, CEO of Velocity Leadership Consulting. “It’s better to work through blind spots.”
For instance, some CEOs “do the same thing year after year,” like making decisions relying solely on data, Brown said. “They should solicit diverse input.”
Finding the next generation of leaders is a major challenge employers can expect to face.
”As boomers continue to retire and vacate high level positions, employers need to be ready to fill those roles,” said Andre Lavoie, CEO of HR software firm ClearCompany. “For some employers, building a plan might feel like a too-little-too-late situation. The truth is, the best time to develop your succession planning strategy is always now.”
Another issue, Lavoie said, is healthcare. “The changes to the Affordable Care Act are ongoing, and they’re going to impact several facets of the business, including retention efforts, employer branding, and talent acquisition,” he said. “Employers want to offer competitive health care options without breaking the bank so they can compete for talent.”
"Companies continue to grapple with soaring employee mobility: the eagerness of young talent to routinely leave their jobs in search of the next thing,” said Matt Hendrickson, CEO of Ascendify.
“In 2018, you'll see much more focus on more proactively defining employee capabilities, then matching latent skills with internal roles or even projects. These sorts of talent assessments will go a long way in retaining the wandering employees that organizations have already spent years nurturing," Hendrickson said.
Companies are all facing the ongoing challenge of driving revenue growth, particularly in a digital world, said Michelle Moreno, an investment banker with Dresner Partners. “For services businesses, retaining and finding the right employees is increasingly difficult. The chance to automate and apply technologies to limit or even reduce the need for additional personnel is often pursued at this point in the business cycle."
And for technology driven businesses, “selling solutions on a SaaS basis meets the need to relate expenses to financial periods more easily,” Moreno said. “Identifying the right technology is a challenge. Profit margins are likely to come under more pressure as each incremental revenue dollar is harder to achieve.”
One of the biggest challenges for employers today is the risk of a cyber breach—and how to prevent or manage an incident. “Data breaches can be very costly for employers in terms of time, money and resources and may damage an employer’s public image and reputation,” said Beth Zoller, legal editor at XpertHR. “An employer needs to be concerned not only about threats from third parties and organized crime, [but] from negligent or malicious employees or former employees.”
There is still no comprehensive federal legislation with respect to data breaches. “Therefore, employers need to actively work to protect confidential information and guard against them, Zoller said.
Data management needs ‘brainpower’
Data management and safeguarding are seen as key in 2018.
Companies are going to face a challenge with the compliance, security, and their risk talent pipeline, said Avani Desai, principal of Schellman & Company, a security and privacy compliance concern.
“As technology is outpacing regulations and compliance, companies are going to have to find the brain power, specifically those who are well rounded and understand the technical, legal and compliance complexity at the same time realizing the impact to the business,” Desai said.
“Organizations overwhelmingly are becoming technology companies—for instance Tesla is more than an automobile manufacturer, it is a technology company, and GE, which had refrigerators and microwaves, and now has connected devices, is also a technology company,” Desai said. “The data management and safeguarding aspect, which may have never been needed before, will need to be a top priority; however the talent pipeline is not full—and you can’t hire what isn’t out there.”
With online-only businesses, mobile devices, App stores, bots and the proliferation of the internet of things (IoT), the focus has changed to an intelligent and human-centric internet—which means speed and low latency are everything, said Jacob Loveless, CEO of Edgemesh. “Companies need to realize centralized and distributed servers—with their performance issues and high cost—can no longer cut it for online content delivery, even in a cloud environment.”
More technical skills needed
Companies should be seeking candidates at all levels and across industries with more technical skills than ever, as technology and software programming touch nearly every job, said Ashwin Bharath, chief operations and information officer at Revanture, a staff training company. “Whether a candidate is joining an IT team, a marketing department, a manufacturing operation or HR, practically everyone will need to have technical skills to do their job over the next 10 years. Smart companies will begin to hire candidates with those skills now to ensure a smooth transition to the digital future of work."
Stepped up questions of how best to support women in business will challenge companies in 2018.
In the area of gender diversity, employers face new pressures from activist investors, legislators and competitors, and frustrations caused by stalled progress and a tightening labor market “have made the issue even more combustible,” said Julie B. Kampf, CEO of executive search firm JBK Associates International.
Also, “employers who want recognition as gender diversity champions need to meet new minimum standards in the areas of board representation, pay equity and CEO engagement,” Kampf said.
Strong tactical skills
Strong business tactics will be key, with negotiations one important area, said Daniel Duty, CEO of business consulting firm Conlego. “Smart, strategic negotiation skills generate savings, value and growth for businesses.”
Companies “can widen their profit margins by developing stronger negotiations processes and tools,” Duty said. “Many executives fail to properly prepare for their negotiations and use the same old methods each time, leaving millions of profit dollars on the table.”
Business “is about creating value for its shareholders, customers, employees and other stakeholders. By engaging in more collaborative forms of negotiation, they can create value for these groups,” Duty said.
Workplaces of tomorrow
There is a shift toward more creative work spaces, blurring the edges between home and office while integrating technology into any place work is done. Employers want the office to be a destination that supports the wellness and well-being of their employees while fostering the process of creative work.
Jeff Rospond, CEO of office developer OpenSquare, said the 2018 office will be driven by four major factors:
- Culture: Culture is expressing itself in new ways in the office—from the integration of nature and the personalization of design, to a worker’s ability to express authenticity at a job that provides them a sense of purpose.
- Employee engagement: The most engaged employees create new ideas and generate more profits. Workers who are highly satisfied are also more engaged, yet disengaged employees make up about one-third of the average workforce.
- Technology: An increasing range of devices and the growing adoption of the IoT, virtual reality and artificial intelligence are not only changing the ways people work and the work they’re doing, it’s changing what is expected of the workplace.
- Creative work: Global issues require the unleashing of creative potential to solve problems, make new connections and generate ideas. This is a central shift being seen.
The result: 2018 is going to be a challenging year from virtually every standpoint. It will take all that CEOs have to navigate it.