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This is a time of accelerated disruption.
Over 80 years, the Industrial Revolution transformed economies through innovations in machinery. Over 18 years, the internet has changed how people interact, access information and shop.
And accelerating that change, it took just 18 months for COVID-19 to disrupt how we live and work.
A new reality is emerging from the impact of the pandemic. These disruptions are challenging CEOs of small and mid-size businesses to stay nimble and continually innovate. Leaders will continue to be challenged to make complex decisions very quickly, such as determining their new workforce model, how to best compete for talent, and addressing the rising cost of everything.
To help businesses prepare, the latest research from Vistage recommends that leaders consider the impact of these five factors:
1. How big to bet: Manage growth expectations
In Q2 2021, the Vistage CEO Confidence Index hit 108.8, the ninth highest level seen since the Index’s inception in 2003. By Q3 2021, however, the Index backed off to 97.1 as the rate of growth was decelerating.
The outlook for the year ahead is still strong among CEOs in Wisconsin, with 76% reporting expectations for increased revenues. That’s according to the Q3 2021 Vistage CEO Confidence Index survey that captured sentiment from over 1,620 CEOs nationally. However, headwinds such as inflation, supply, talent scarcity and the COVID-19 delta variant are threatening to dampen growth. The burning question for CEOs is how big to bet.
2. How to hybrid: The workforce model of the future
The great work-from-home experiment has revealed an important finding: Most people are productive at home, and many prefer remote working.
CEOs are now facing big policy decisions about the workplace model to offer long-term, whether that’s fully remote, in-person or a hybrid of the two. Just 25% of CEOs in Wisconsin plan to offer work-from-home options – either hybrid or fully remote – for some employees in their organization.
Making these policy decisions is complicated by the fact that certain aspects of work are better done in person while others are better done remotely. CEOs also need to carefully consider their employees’ preferences on remote versus in-person work.
3. How to connect to the connected customer: Sales and marketing alignment
Buyer behavior has changed. In the past 18 months, buyers have become more autonomous, digitally engaged and comfortable shopping without a salesperson. This puts pressure on organizations to radically change how they approach sales and marketing.
Businesses are increasing their investments to manage this pressure. Over a third (35%) of Wisconsin small and mid-size businesses surveyed have increased their marketing investments over pre-pandemic levels. Eighty-four percent of marketing investments are on digital marketing in particular.
4. How to manage the rising cost of everything: Managing supply and demand
Headlines everywhere talk about inflation. CEOs in Wisconsin reported increased costs from suppliers (78%), labor costs (82%) and raw materials (77%). Adding to this challenge, supply chain problems are getting worse. Businesses are facing shortages in raw materials, computer chips and shipping containers.
To absorb costs, businesses must increase their prices. This remains a fine balance between profitability, market forces and customer acceptance in place of lower-cost alternatives.
5. How to accelerate digital transformation: Effectively leveraging technology
Throughout the pandemic, companies that have fared the best are the ones farthest along on their digital transformation path. This correlation between technological advancement and business success is likely to grow stronger as our dependence on technology increases.
Currently, 70% of CEOs in Wisconsin are investing in technology to reduce the labor burden on their product or service, compared to 65% nationally.
Meanwhile, the threat of cyberattacks is growing. With so many employees working remotely on unsecured home networks, companies are more susceptible to hackers. Even if you’re among the 53% of Wisconsin CEOs with an up-to-date cybersecurity plan in place, your business is still at risk for an attack.