CEOs face problems every day. What are the most relevant ones, even more so at this juncture, and what options do they have to solve them efficiently?
Pandemic, war in Europe, political intervention in markets, social upheaval, uncertainty, changes in the world of work? CEOs face challenges constantly, many of these linked to the economic and social environments, and to consumer reaction.
Different experts reveal what are the main issues that top executives must put their chests to. This year there are a few on tap. Norberto Rossi, chair of Vistage and independent director of CasaIdeas, Banco Ripley Peru and Mall Aventura, highlights the unfavorable international political situation, an internal demand repressed by the price increase and the increase in interest rates, which affects the capacity of indebtedness. Faced with an adverse context, Rossi launches three points for CEOs to manage problems. The first focuses on having and communicating clearly the business strategy. “Innovation, diversification and the continuous search for new opportunities are determining factors for the
commercial success of companies,” he says. What happens in the marketplace is not always under the control of the CEO.
But the search for efficiencies is his direct responsibility. It’s about controlling all expense lines, tightening the belt and seeking maximum efficiency. “The question is this: if you don’t achieve sales, how do you ensure profitability?” questions Rossi. The equation is not simple.
Last but not least: you have to protect cash flow, fundamentally in times of crisis. You have to achieve projected sales levels and radically reduce expenses through maximum efficiency.
The problems
All of this is compounded by a number of issues. First, maintaining growth. “Getting an organization to grow steadily is the main challenge for a CEO,” says Diego Cubas, chairman Latin America at Cornerstone. This is even more relevant in countries like Peru, where the context is often uncertain. The executive’s ability to have an agile thinking and execution structure is vital.
To do this, the CEO must identify and plan well the organizational objectives, have a defined and flexible strategy, build a high-performance culture and develop the ability to execute with excellence.
The second most important concern of the CEO, continues Cubas, is to properly manage talent. This means not only attracting and retaining the best workers, but also contributing to the development of employees so that they can assume greater responsibilities in the company in the short, medium and long term. The CEO is the main ambassador for implementing best practices in the processes of attraction, development, retention and strategic compensation.
The HR director you hire has to be a business executive with a holistic vision that accompanies the vision of the organization, Cubas stresses.
Other challenges for the CEO are to build a cohesive, high-performance talent team, and to be concerned about taking emotional care of the worker to avoid burnout and silent resignation. Cubas points out that this requires, first, defining the right composition of the dream team, as well as what exactly is needed from each employee and from the team in general. The CEO has to be aware of the importance of achieving results, but taking care of the forms and the well-being of the employee.
“You need to establish a supportive leadership, in which the employee is at the center,” says Cubas. The Cornerstone executive also emphasizes the challenge of digital transformation to generate efficiencies and value, and the importance of sustainable practices, such as reducing the carbon footprint, that contribute to building a better world. On the first point, the CEO and his management team need to identify what to digitize and what not to digitize. For that, they need to recognize how to achieve efficiencies, how to generate value and how to improve the user experience.
On sustainability, the CEO must be forward-looking to realize what changes are coming and prepare the organization to deal with them. “Social and environmental responsibility is a relevant issue for the retention and attraction
of talent and clients,” says Cubas.
The ego
Rizal Bragagnini, chair of Vistage and professor at Pacifico Business School, reveals that CEOs face problems on three levels, which he refers to with the acronym EGO. The first has to do with strategy. The CEO questions, for example, how to do five-year strategic planning in the face of current socio-political uncertainty.
That determines key decision making, such as how to start operating in new markets and how to do so. The next level is the people level, in which how to attract, select and retain talent in specific positions, and the definition of the culture the company needs to ensure short-, medium- and long-term results prevails. “The CEO must rely on people who are more skilled than he is. He must have three people better than him in Commercial, Operations and Back Office management,” says Bragagnini.
At the last level, Operations, the main problem is how to balance efficient management with control, systematize knowledge and prevent employees from aban-
doning the company. To do this, it is necessary to take advantage of available technology,
work on more efficient processes and determine the tools that balance management and control.
Everything has a solution
Always, but even more so in the face of uncertainty, it is people who make the difference. Where can talent be found? Daniel Falcón, founder and CEO of Neo Consulting, suggests looking at startups -which are facing a complex year and their staff could be open to listen to offers-, outside Lima or the country -since many people are attracted to work in the Peruvian market-, and to talent in training, which, although not very experienced, does have the attitude to learn quickly.
Falcón also highlights that crises bring opportunities, as happened during the most critical years of the pandemic. “In a complex environment, paths are opening up to digitize organizations, transform themselves, bet on omnichannel and innovate in products that are more suited to the needs of an economically battered and more informed consumer,” he says.
Technology also plays a key role in making organizations more efficient. Artificial intelligence and advanced analytics, for example, generate speed by automating processes.
A matter of attitude
It is impossible to change the context. But Rafael Zavala, executive director of Senior Management Programs, PAD – School of Management, suggests some solutions for the CEO to use the conjuncture to his advantage. “We don’t choose ministers or if there is war, but we do choose how to act in the face of it and what can be done in the organization. The key battle of a manager is interpretation,” he argues.
Zavala proposes decoding and managing reality today. “The future will be better if the present is better managed. This means looking at the process of what we are doing and not the result,” he says.
To do this, the CEO must take into account his own reality (what is being done well, what to improve, what to focus on, what to stop doing), the reality of his family (the level of closeness and trust with them), the reality of his work team (bring out his best version, know his collaborators, motivate them and demand from them) and the reality of his work (understand in depth
the market, the target public and the risks, and have a structured and at the same time flexible strategic plan).
You must also prioritize (know how to say no, for example) and learn to lose (and lose to learn). Here attitude and watching your thoughts are essential aspects. “How many CEOs and professionals are the happy consequence of mistakes correctly read and interpreted?” says the PAD executive.
Living in the present – not in the past or the future – is also indispensable for the business leader. “The only way we can peek into the future is by having our attention on today,” he notes.
