In the past, the role of a CEO was to lead a company. That’s still true today, but in an interconnected world, a chief executive’s sphere of influence is wider than ever. As Harvard Business Review claims, “Today’s CEOs don’t just lead companies. They lead ecosystems.”
The challenges facing today’s CEOs are arguably more varied than those their predecessors faced. What do CEOs have to contend with? Here’s a look at the many facets of executive leadership today.
CEOs Answer to More People Than Ever
Being a CEO has never been easy, but yesterday’s executives at least had fewer people to answer to.
In the past, a company’s CEO primarily had to answer to two groups: the board of directors and company shareholders.
However, major companies now have a huge range of stakeholders, and those stakeholders are distributed across all levels of society.
Keeping all of these people satisfied with the company is a Herculean task, and it’s one that requires a good bit of emotional intelligence.
Technology Is Constantly Evolving
The evolution of technology impacts more than just companies in the tech sector. Newer technologies can improve business processes, make employees more efficient, and help businesses extract meaningful insights from customer data.
These are all good things. But in all the excitement surrounding new technology, it’s easy to forget that adapting takes time and energy. Today’s CEOs need to keep an eye out for new technology and then decide whether the benefits are worth the cost of implementing it. Often, as soon as a business adopts a new technology, an upgraded, more efficient technology comes out.
It’s Difficult to Create a Connected Workforce
Every CEO wants to foster a positive company culture. A healthy culture draws in quality employees and encourages existing ones to stay. A negative company culture can have the opposite effect.
Today’s companies are larger than ever, so CEOs have a difficult time creating any unified work culture at all — let alone a positive, supportive one.
This challenge existed in past years, but the rise of remote work has made developing culture and connection even more difficult. Many companies want to offer hybrid and remote work options to better suit the needs of their employees. However, when all (or even just a few) of their employees are telecommuting, CEOs have a much harder time creating a sense of connection.
Customers and Investors Care About Sustainability
In the not-so-distant past, investors primarily cared about one thing: returns. But now, there’s a steady rise in investors who seek out socially and environmentally responsible companies. If a company wants to succeed, it needs to show a genuine commitment to sustainability.
Environmental, social, and governance (ESG) scores attempt to quantify a company’s dedication to ethical operations. There’s no single organization responsible for ESG metrics; several different independent organizations publish their own scores.
Energy efficiency, diversity initiatives, tax transparency, and supply chain labor standards are just a handful of factors that might influence ESG scores. If today’s CEOs want to keep investors interested, they must be constantly mindful of ESG efforts.
Not many customers look up company ESG scores, but an increasing number prefer to give their business to more sustainable companies. This means that CEOs need to do more than approve sustainability initiatives; they need to make sure customers know about them, too.
Market Conditions Are Especially Unstable
Nothing is certain in business. But recent years have been uncharacteristically tumultuous. The COVID-19 pandemic had far-reaching effects on worldwide commerce. The war in Ukraine has disrupted international politics. Nearly every industry has faced some kind of supply chain disruption.
With all of these variables, it’s no wonder that CEOs are faced with incredible uncertainty. Delivering results is challenging enough in a predictable market. But in times like these, CEOs have the added challenge of inspiring confidence in their employees, stakeholders, and customers.
Despite Long-Term Challenges, Short-Term Decisions Still Need to Be Made
If you’ve just received a life-altering medical diagnosis, you need to decide what your next steps will be. But you also still need to be able to make mundane decisions like what to have for dinner.
Likewise, while CEOs plan how to help their companies weather long-term challenges, they still need to make the everyday decisions needed to run the business. CEOs need to be agile decision-makers — they must quickly assess both short-term and long-term situations and decide on the best course of action.
It’s Difficult to Stand Out in a Crowded Market
Some sectors are more competitive than others. But every CEO faces the challenge of remaining competitive, even when customers have a dazzling array of alternatives.
Paradoxically, many CEOs have found that it’s harder to distinguish their companies when they’re too focused on the competition.
Instead, CEOs of today need to strike a balance between monitoring their competitors and looking inward.
By reflecting on their companies and zeroing in on what makes them truly unique, CEOs are more likely to devise new, innovative ways of setting their brands apart.
Social Media Fuels Scandals
Social media can do a lot of good for a company. However, recent years have shown how it can turn a mishap into a long-lasting scandal. In the past, a CEO might have spoken to a TV station or newspaper to comment on a current event. But social media users want an immediate response.
As a result, CEOs must have at least some level of social media savvy — they need to know what to say, how to say it, and when to say it. These decisions need to be made quickly, and often when the CEO is also doing damage control on other fronts.
A New View of Leadership
In years past, great business acumen was often enough to land a C-suite role. However, today’s CEOs don’t just need business smarts; they also need social and emotional intelligence to relate to stakeholders, customers, employees, and board members.
As the economic landscape continues to rapidly evolve, we’ll see what’s in store for the CEOs of tomorrow.
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