Armed with an understanding of who they are and where they are going, effective executive leaders chart a course for themselves, for their employees, and for their organizations.
But leadership must first know who they are. And where they are going.
While this leadership principle is timeless and unique to each individual leader, how executives define who they are and where they want to go evolves over time and is dependent on cultural, economic, and political trends.
Top 5 Strategic Challenges
I believe the following five issues are among the top strategic challenges that business leaders must tackle head-on today:
- Recruiting & Retaining Employees
- Impact of Technology and Social Media
- Short-term vs. Long-term Strategy
- Adaptability & Change Management
Today, almost any company can have a global reach.
Even if they choose not to operate globally, they will likely have global competition and will be forced to deal with globalization issues at some level. Some issues which can impact the success of any organization are awareness of and sensitivity to cultural diversity among employees and customers.
Additionally, more issues occur with currency fluctuations which may affect any portion of the supply chain or value chain, and logistics or managing the delivery of products and services to any location, at any time, and better than the competition.
To help leaders with globalization challenges, Business without Borders offers the “Global Opportunity Tool”, which provides information about global markets and is designed to help members identify opportunities for international expansion.
Developed by The Economist Intelligence Unit and brought to members by HSBC Bank USA, N.A., the tool lets businesses explore different international markets based on data from their own industries.
Recruiting and Retaining Employees
Job seekers today are very demanding of their employers.
The impetus behind this workforce trend is a younger generation -sometimes dubbed “the entitlement generation” – with differences in expectations about work/life balance, the ability to have a virtual workplace or great flexibility in when and where they work, employee benefits, workplace culture, and upward mobility.
Employers who aim to satisfy these demands have higher expectations about the caliber of employees they hire, which makes recruiting and retaining employees a growing challenge.
Interestingly, the Cisco worldwide study of 2,800 college students and young professionals intended to determine what the “millennium generation” wants from employers and what they consider to be an equitable work/life balance.
One-in-three of these prospective employees said that access to social media sites like Facebook and the ability to choose their own workplace technology devices was more important to them than salary when considering a job offer.
More than 40% went so far as to say that they would accept less money for a job that accepted social media use at work on a device of their choosing if it also included working remotely.
Impact of Technology and Social Media
Managing the reputation of a company is more difficult than ever.
This is because of viral communication made possible by social media and instantaneous online interactions. The voice of a single unhappy customer or client can resonate across the world in an instant.
This threat, combined with requirements for keeping up with and staying ahead of competition with technological advances and developing employee training that keeps up with technological changes so the work force maintains efficiency and expertise, requires a focus on structuring/re-structuring the organization so that it can effectively manage and implement technology changes.
It also requires an evolving customer communication and response strategy.
At Crowdcentric’s latest global Social Media Week, Sandy Carter, IBM VP of social business and collaboration solutions sales and evangelism, noted this:
“Today, social is not just about leveraging public platforms like Facebook and Twitter; it’s about embedding social into all parts of an organization.”
Further supporting technology’s importance in growing a “social” business, Rod Smith, IBM VP of emerging technologies, adds this:
“There is so much opportunity to communicate the potential social analytics presents for businesses of all sizes and all industries…We are just at the tip of the iceberg with people’s knowledge of the impact this advanced analytics technology holds.”
Short-term vs. Long-term Strategy
Another ongoing challenge is managing the firm’s capability to satisfy investors and shareholders with short-term strategy.
At the same time, firms must balance short-term goals with an evolving long-term vision to allow the company to grow and remain relevant, particularly in competitive environments where business models can be copied much more rapidly than in the past. Employers must also keep the workforce aware of and actively involved in achieving that long-term vision.
According to Ray Perry, Executive Director of the Chartered Institute of Management Accountants:
“If companies are to survive and thrive in such a challenging landscape, they need to be able to create a meeting point where short and long-term needs connect. Abandoning short-termism for the longer horizon has been exhorted as the antidote to the recent crisis.
But what is really needed is a return to perennial principles of good business practice, with short-term operational actions that are congruent with the long-term vision.”
Adaptability and Change Management
Market changes are occurring much more rapidly, and product life cycles are much shorter than in the past.
This demands the ability for leaders to manage change effectively and adjust business models and practices rapidly enough to keep up with the competition, while balancing the management of change with rapid growth potential.
Adaptability of any organization is highly dependent on the effective handling of the other four key strategic challenges: globalization, recruiting and retaining employees, technological advances, and balancing short-term/long-term strategies.
“Indeed, this is a time when organizations will invest in change to better adapt to emerging market opportunities, to more successfully engage with customers, employees and stakeholders, rethink systems and processes, and ultimately, revive the company’s vision, mission and purpose,” ~ Brian Solis, author and Principal at Altimeter Group.
In his defining of trends for business transformation and leadership, Solis adds:
“We can’t innovate if those who experiment are not supported. Organizations need to focus on cultivating a culture of adaptation rooted in customer- and employee-centricity and more importantly, empowerment. Culture is everything. It is and should be intentional. It should be designed. Those companies that invest in the development of an adaptive culture will realize improved relationships that contribute to competitive advantages.”
Do you believe there are any other, or more relevant, strategic challenges that business leaders currently face in 2012 or should be prepared to face in the near future?
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