The top 5 issues keeping CEOs awake at night in 2012
It’s lonely at the top – and when company leaders do get the chance to talk confidentially about the challenges of running a business, there are five issues that are most likely to cause sleepless nights in 2012.
The CEO Institute, a national organisation whose members are the CEOs and leaders of large private and public companies and professional firms, has released a list of the top 5 issues currently keeping CEOs awake at night.
The CEO Institute spokesman, Mr Evan Davies, said these issues included some specific post-GFC issues as well as some perennial leadership issues:
Top 5 CEO concerns (source: The CEO Institute, January-March 2012 member meetings)
- Sourcing and retaining skilled staff (keeping “millennial gen” employees interested)
This perennial issue was top of mind 12 months ago and still is now, Mr Davies said. Despite a reasonably high unemployment rate, CEOs are having a hard time getting young talent on board – and keeping them. “Our members are indicating the millennial generation just don’t stay at companies too long. This is really problematic in developing leadership and talent pipelines.”
- Achieving top-line growth
Top-line growth is all about customers and sales - the concern is about activities to acquire new customers, increase customer loyalty and increase retention, Mr Davies said. “It’s tough right now for CEOs dealing with changing customer needs and expectations. They are trying to develop strong sales and marketing strategies to grow sales and to sustain and develop steady top line growth. Many of our members are talking about developing new processes and products to stay ahead of the competition – to build and maintain their competitive advantage,” he said. And if you can’t get top-line growth and can’t increase new lines, you really have to maintain costs.
- Reducing costs
Mr Davies says this is very big on members’ radar. While the Australian dollar is at levels good for importing, it’s not great if you are trying to export. He said the cost aspect – in particular wage and salary increases and the potential impact of the Carbon Tax - are a big concern to members.
- Improving operational efficiency
If you can’t increase sales, to reduce costs you need to run a very efficient business. “Our CEO members are concerned about making sure their strategies are appropriate for the business and managing risks effectively. This is an important one given businesses in tough industries (retail, manufacturing) may consider a move out of their normal area to take advantage of boom industries (mining, resources) – there are risks involved with diversification or taking on big projects,” he said.
- Managing increasing competition
Competition is fierce – CEOs are constantly asking “how are we managing our customer service?” as their competition puts them under the pump. Business leaders need to know they are positioned to seize opportunities in the right place at the right time. “CEOs’ focus is on getting their business models right and many are recognizing that the sources of growth may well be very much local. Changing customer demand is the biggest driver of change to corporate strategy. Success involves truly understanding customer segmentation and the dynamics driving it,” he said.
At our monthly syndicate meetings, and across each of the Australian states, CEOs are raising these 5 issues continuously,” Mr Davies said.
“A constant dilemma for CEOs is who they can talk to, candidly, about their problems and challenges - because there can be a real sense of being lonely at the top. The CEO Institute provides leadership guidance and peer support for our members on these and other issues.”
The CEO Institute organises syndicates of about 16 CEOs, who meet monthly to work through issues and share knowledge. The membership of each syndicate is matched to members’ business profiles and size, ensuring a dynamic and active environment in a confidential setting.
Mr Davies said first time CEOs in particular were keen to solidify what business aspects they should focus on in their first year in the role – and they want guidance on this in a confidential environment that does not undermine the confidence their staff and board have in them.
Mr Davies said members had been telling the Institute in 2012 that they are reasonably optimistic about the prospects for their own organisations – but had doubts about the Australian economy as a whole.
He said prospects for the next 12 months had improved slightly from pre-Christmas, with members pursuing sales growth and keeping a tight rein on costs.
“Our members’ expectations around employment, capital investment, profit and sales is relatively steady right now,” Mr Davies said.