How CEOs Can Transform And Thrive In 2021
· 10% of the most valuable roles often don’t exist in businesses - do you know where value lies in your team?
· 80% of CEOs are planning operational efficiencies this year – can your organisation stay in a growth mindset?
· Commit to ongoing transformation rather than a single change – keep looking for the 1% increments.
2020 was a challenging year for business leaders. 2021 is set to be no different. With most experts agreeing that the global economic recovery is likely to be ‘W’ shaped, the challenges are clearly not over. However, challenges are also opportunities for growth and success. As a CEO, you can take steps to make sure that you are transforming your company into one that will not just survive, but thrive in 2021.
One of the most significant hallmarks of a successful CEO is not only making decisions but also acting on them. Moreover, the best of the best act boldly. This means you make a decision early and move big. The areas where decisive action have the largest impact on success include;
· Reallocating resources
· Merging, acquiring, and divesting programs
· Improvements to productivity
· Capital expenses.
Key takeaway: What’s the one decision you can make which will make the most significant positive impact?
Define Your Agenda Despite Lack Of Clarity
Not knowing what’s coming around the corner is becoming an all too familiar feeling at the moment. But, you cannot let the uncertainty stop you from planning. Having a clear agenda and roadmap laid out for your company can help to stop you and your team from floundering.
It is crucial to accept that any plans you make are likely to change and evolve. However, part of being a successful CEO through this pandemic is developing the skills of continuous planning. You can’t let the uncertainty stop you from planning. At the same time, it is important not to get stuck on a path just because you planned it months ago.
Key takeaway: Approach planning with flexibility in mind.
Get Your Team Right
It’s no big secret that having the right people in the right roles can make or break a company. Different roles create different amounts of value. It would make sense that the most valuable ones be those you, as a CEO, are keeping the closest watch on. Yet, careful analysis suggests that only 10% of the most valuable roles in a company report to CEOs, 60% are two levels below the CEO, and a worrying 10% of these valuable roles may not even exist.
If you are going to thrive in challenging conditions, you need to analyse your team - Not just who is in it, but how it’s structured. Knowing where the value in your team lies is essential, and surprisingly easy to get wrong.
Key takeaway: Work out where your talent value lies and make sure it’s in line with your company structure.
Commit To Longterm, Ongoing Transformation
Being an effective, transformative leader means that you are not just looking for a quick fix. To be truly effective, you should commit to ongoing transformation. The global situation has made it clear that to thrive you need to be continually adapting to the changes in the world.
If you start thinking that there is a single solution to this pandemic that will see you through, you may miss vital transformation steps. It is important to consider that the steps you need to weather the immediate crisis may not be the one to get you through the next.
The best mindset to have is one that accepts the need to change and innovate fluidly. You’re not carving out a new company you’re moulding the one you have - over and over again.
Key takeaway: Don’t just make one change; look for transformational steps.
Plan For The Next Stage Of Your Transformation
Thanks to books such as Atomic Habits and Tiny Habits, lots of people are familiar with the incrementalism that has become the hallmark of many great athletes. From the British cycling team to Micheal Phelps, there are plenty of examples of how making many small changes can significantly affect your results.
We can apply the same philosophy to business. To make this strategy most effective, though you need to be thinking ahead. If you just focus entirely on your current step, you’ll get left behind. To keep the momentum of change and improvement going, you need to keep one eye on your current goal while searching and planning the next step in your journey.
Key takeaway: Instead of focusing on the big changes, look for the 1% improvements that keep the business moving forward.
Manage Your Topline Whenever an economic crisis hits CEOs will instinctively turn to cost-saving measures. Around 80% of CEOs are planning to continue pursuing operational efficiencies through 2021. This is an approach that may preserve your bottom line in the short term. However, there are limits to how many cuts you can make. There also comes the point where cuts to your costs begin to cause cuts to your revenue.
If you want to preserve your bottom line, your best option is to focus on your topline. Topline growth is, and always will be a pillar of growth. Finding new ways to push your sales will be the most crucial strategy for weathering this storm. There are plenty of tools for keeping your topline healthy. Options include pursuing new revenue streams, reinventing your marketing strategy, and innovating your product. It’s worth exploring them all.
Key takeaway: Stay in a growth mindset as much as possible.
Protect Your Working Capital
Never has it been more important to try and protect your capital. Consequently, careful spending decisions are crucial in a turbulent time. If you don’t have the runway to last your business for 6-12 months, you will be in a perilous position.
It’s clear that national lockdowns are still on the cards. Countries are opening and closing their borders daily. There is no way to predict if and how you may be hit. You cannot rule out having to shut down for an extended period.
Key takeaway: Get clear on your finances and make sure your working capital is as sustainable as possible.
Think Like An Outsider
Exceptional CEOs are more likely to be outsiders. CEOs with an external view of a company are more likely to use a broader range of strategies. They are also more likely to make bolder moves when they do implement strategic changes. The combination of boldness and willingness to change are key drivers to success.
If your goal is to thrive in 2021, you need to start thinking like an outsider. Consider your whole business dispassionately and try going back to scratch. If you could redesign your processes today, what would you do? Don’t be afraid to shake things up. It might be precisely what your company needs.