What business challenges keep the average CEO awake at night? And what, if anything might these issues mean for HR professionals and those involved in people management?
A slowdown in global economic growth, the need to focus inwards to find ways to grow, a struggle to make sense of data and the eternal shortage of skilled talent are the what, according to PricewaterhouseCoopers (PwC), which identified these key themes in its 22nd Annual Global CEO Survey.
PwC conducted 1,378 interviews during September and October 2018 with CEOs in 91 territories. Its sample was weighted by national GDP to ensure that CEOs’ views were fairly represented across all major regions, while the interviews were also spread across a range of industries.
Although the dip in economic confidence comes as little surprise, the trend for organisations to shift their focus inward for revenue and expansion opportunities goes against the grain when globalisation has been the major driver in recent years.
When it comes to growth prospects, the top three threats were listed as being over-regulation, policy uncertainty and the availability of key skills, which had ranked as a distant fifth in 2018’s list. Caution is being turned to the ease of doing business meaning that risks such as terrorism or climate change have moved down the pecking order over the last 12 months.
This reordering is making organisations look internally for ways of driving revenue growth. Some will come from operational efficiencies or realising gains from launching new products or services, but over a third of CEOs said that they’d achieve this through mergers or acquisitions, or as 40% said, by forming joint ventures or strategic alliances.
As consolidation continues across every conceivable industry sector, company mergers and take-overs still pose a headache for HR departments with the recurring need to roll out change management programmes. As we’ve already seen with transformation planning, a lot can go wrong with 70% of such initiatives coming unstuck. However, evidence published by the ICF in partnership with the Human Capital Institute, underlines that coaches can play an important role when it comes to helping organisations prepare and implement more robustly designed and effectively communicated change programmes.
As PwC’s Survey goes onto highlight, ‘the skills gap is a particular pain point, impeding innovation and prompting higher people costs’. 55 per cent of CEOs confirmed that the availability of key skills affects their growth prospects because they are unable to innovate effectively and, in some cases, their hands are tied so they cannot pursue market opportunities and miss growth targets.
The overall skills shortage is compounded further when AI and digitisation is thrown into the mix. Addressing these gaps will be critical as the majority of the CEOs surveyed, said they believe AI will have a larger impact than the internet revolution did. Although there is no quick fix, the situation is being remedied in a number of ways.
The Survey states that North American CEOs are working around the problem by ‘establishing a strong pipeline direct from education,’ while the top brass from companies in Latin America, the Middle East, Asia Pacific, Africa and Western Europe are preferring to invest in retraining and upskilling. For HR directors it means the obligation for them will be to create corporate cultures where adaptability and lifelong learning are crucial if the benefits offered by new technology are to be truly felt.
Although AI and automation will change the functionality of many existing roles, soft skills such as empathy and creativity will be an absolute prerequisite in making people employable throughout their working lives. Education will need to be repurposed to allow HR teams and business leaders to build better workforce strategies that are more suited to the 21st century’s evolving needs. Using coaching here too will be central in helping prepare workers for technological change and also in instilling a sense of purpose and delivering a great people experience for new and existing workers.
The AoEC’s consultancy services are offered to organisations and feature a portfolio of tailored solutions and products that can serve to address a multitude of issues facing both large and small businesses today. We work at all levels within an organisation to help build a coaching culture where the emphasis is placed on improving performance, maximising your people’s potential and driving business success.