Recently the Vistage Confidence Index fell to 69.0, one of the lowest Index readings recorded since the Before Times (March 2020). While supply-chain glitches have eased somewhat, recession concerns continue and challenges in finding and keeping talent persist for most employers.
Here are three key factors for you to consider as you prepare strategic plans for 2023, distilled from Vistage’s latest in-depth report. (If you’d like a free copy of the report, just contact me at the email at the end of this column.)
1. A new workplace is here to stay.
Clearly the COVID-19 pandemic has fueled significant disruptions to the traditional analog, in-person workplace we were accustomed to, and our work and lives are forever changed.
Remote working required leaders to let go of a “butts-in-seats” mentality for managing employees and get more comfortable with managing flexibly to work product and results. At companies that are thriving in this area, leaders have realized that championing culture and coaching (not just directing) others’ performance is more important than ever.
Leaders have learned that the employee experience is personal and that employees have choices. The elements of the work itself, the culture it’s done in, the physical workspace, and the boss relationship all have to be dialed in much more uniquely than before.
- Get crystal clear on the “work mode” each job requires. One size no longer fits all here: by their natures, some jobs will just have to be on-site most or all of the time, while others can be hybrid, and some can be fully remote. Bake these definitions into your employee handbook so everyone’s on the same page.
- Make sure you have the best technology and collaboration software that your budget allows. Don’t cut corners on cybersecurity.
- Invest now in developing frontline managers so they can make the shift from managing time and attendance to coaching performance and productivity.
2. Economic volatility is on the rise.
Since 2003 the Vistage CEO Confidence Index has accurately predicted future changes in growth and GDP (see chart).
If history holds, this points to a rapid slowdown of economic activity in the short term as CEOs take foundational steps in anticipation.
Moreover, the experts at ITR Economics predict a soft landing but not a recession. Supply chain issues are starting to improve though still bumpy, the semiconductor situation will persist, but inventories of most other consumer goods are much better.
Still, it looks like inflation will stick around a bit longer before it settles down, while energy costs will continue to go up. Meanwhile, the situation in Ukraine brings a decent amount of uncertainty to everything, it seems.
- Explore ways to mitigate inflationary effects to your business, by reevaluating key areas (workforce needs, investment strategies, etc.)
- Weigh the opportunity costs of investments against the actual costs of higher interest rates, and
- Look for ways to cut energy costs.
Customers are becoming more and more cautious.
The recent rise of inflation has buyers returning to a more cautious stance. After all, they’ve been dealing with the same supply chain bottlenecks and talent frustrations that you have.
These days as much as 70% of the purchasing decision is made before a buyer talks to a human being. Buyers have increased their online research and buying, they’ve embraced virtual selling, and sales cycles have slowed as uncertainty has caused buyers to adopt more guarded, conservative approaches.
- Think less about your sales funnel and process and more about your buyers’ journey. Revamp your customers’ digital experience with your company with storytelling features that highlight how you help them solve their biggest problems.
- Train and equip your sales and marketing teams for effective interactions with the cautious buyers (new pain points, new objections, new responses to objections).
- Make sure your sales team is schooled up on your technology platform of choice so that virtual selling efforts won’t be blemished by a bad virtual experience.
These trends are still evolving and leadership teams should start to prepare for the challenges of 2023 now. The newly empowered and more remote workforce will require more from their bosses than ever before. Senior leaders will have to be intentional about helping frontline managers make the shift from managing what they can see to what it’ll take to create a compelling and flexible employee experience. Ongoing economic volatility requires CEOs to remain vigilant about how it affects their markets and their growth implications. In the words of Formula 1 and Indy Car champion Mario Andretti, “If everything seems under control, you’re not going fast enough.”