Born of a decade-defining crisis, the CEO Moment offers an opportunity to rewrite the future of business
Looking back on a year of disruption, it is fair to say that not even the most agile organisations could have anticipated the extent of operational challenges thrown up by the Covid-19 pandemic. Indeed, against the VUCA standard, an acronym for volatility, uncertainty, complexity, and ambiguity coined by leadership consultants Warren Bennis and Burt Nanus at the end of the Cold War, 2020 was a black swan year unlike any other.
Across the UAE and elsewhere, each element reached a new extreme in the face of unprecedented business conditions. CEOs have been called on to adapt more quickly than ever, to address unforeseen threats and capitalise on new opportunities, protect customer and staff health and pivot to new workplace models – all while waiting for a vaccine to set business moving again.
Patrick Pouyanné, Chairman and CEO of TOTAL, spoke for executives in every sector when he addressed the Abu Dhabi CEO Virtual Roundtable in November: “We face a lot of uncertainty. We all hope that the demand will recover as quickly as possible. How do we navigate this type of environment? I think it is back to the fundamentals. Checking the way we spend our money, checking carefully the cost of our operations.”
Certainly, the transformative nature of the moment offers a historic opportunity to rebuild stronger, more resilient enterprises capable of meeting the demands of a radically different society – a state of affairs that the consulting firm McKinsey called the CEO Moment in a recent report.
CEOs have been offered the opportunity to lead in expedient and ingenious ways, the consultancy says. In doing so, not only will they recalibrate their own organisations’ operations, performance potential, relationship to stakeholders of all kinds, but CEOs will also be able to positively influence the achievement of corporate, human, and societal potential. “This will be a true inflection point,” Rajnish Kumar, chairman of the State Bank of India, said in the report. “I think that this pandemic, in terms of implications, will be as big an event as World War II. And whatever we learn through this process, it must not go to waste.”
It is widely acknowledged that the pandemic has accelerated several trends that were already in motion – the employment shift to services, the evolution towards purpose-led companies, the digital revolution, and the consequent rise of Fourth Industrial Revolution technologies.
C-suite leaders have already begun to rewrite the future of business on several fronts. These can be described in four actionable insights.
Innovate your way to awesome
The business world is facing an innovation crisis, Tesla and SpaceX founder Elon Musk warned at the WSJ CEO Summit in early December. Rather than focus on incremental revenue efficiencies, he counselled CEOs to spend more time on product improvement. CEOs should ask themselves, “Is our product as awesome at it could be? Probably not. What could you do to make it great?” he said.
The answers lie in feedback across the board. “I just honestly would recommend to anyone listening… just spend less time in meetings, less time on PowerPoint presentations, less time on spreadsheets and more time on the factory floor or time with customers,” Musk said.
Make digital mainstream
Having been sold as the panacea to a variety of organisational problems for several years, technology has proved itself in the pandemic. Eighty per cent of respondents in a survey of 315 chief executives from eight countries had accelerated their digital expansion plans over the pandemic, according to the professional services firm KPMG’s CEO Outlook Report. That number is higher in the UAE, where 91 per cent of executive describe digital transformation as ‘business as usual’.
Accelerating digitalisation across the board will help create the next-generation operating model, according to 81 per cent of executives polled. “Companies that proactively invested in technology were better prepared for the current crisis, which demands flexibility and digitalised operations,” Farhan Syed, Head of Advisory, KPMG Lower Gulf, says in the report. “The widespread adoption of digital technologies – in addition to establishing robust cybersecurity measures – is helping to future-proof UAE businesses and opening up new customer channels.”
From people to payment, the world has pivoted to a digital model. Companies that do not pivot alongside risk being left behind.
Unlock human capital to build resilience
With the pandemic having underscored the need for organisational resilience, executives are seeking to develop human-centric strategies to better adapt to ongoing disruption. Nearly half (47%) of executives in Deloitte’s 2021 Global Human Capital Trends report released this month, planned to focus on multiple high-impact events, as against 23% before the pandemic. Over 3,600 business and HR leaders from 96 countries were surveyed.
Nearly three-quarter (72 per cent) of executives identified “the ability of their people to adapt, reskill and assume new roles” as a priority for navigating future disruptions. Yet, only 17 per cent of this group felt their organisation could help workers reskill into new roles, a telling indicator of workforce development standards.
Separately, moving on from the archaic factory clock model has paid significant productivity dividends. In the US alone, simply initiating new ways of working over the pandemic saw workplace productivity rise at its highest level since 1971 in the second quarter of this year, Erica Volini, principal and global human capital leader at Deloitte, told Reuters. “People are working differently, and therefore increasing their productivity, increasing their ability to drive new outcomes, because they’re working in ways that are natural to them.” Translation? Trust pays rich dividends.
Lead with purpose
Crises reveal our deepest values, serving an opportunity to return to basics and reacquaint ourselves with existential questions. Even pre-pandemic, UAE CEOs sought shifting from pure-play profit to also consider their purpose in society, according to KPMG’s CEO Outlook Report. Since the pandemic, however, 79 per cent of CEOs polled for the report say they re-evaluated their purpose as a result of Covid-19, up from 54 per cent at the start of the year.
In total, 77 per cent of global CEOs say clarity of purpose has helped them understand what they need to do to meet the needs of stakeholders: employees, communities, customers, partners and investors, while providing a clear framework for making quick and effective Covid-19 related decisions.