Across the world, shoppers are facing empty shelves often finding their favorite products missing, throwing consumer product companies into a frenzy of supply chain frustrations and retail execution challenges. But it’s not just consumer products companies that are being affected by the supply-chain disruptions.
In an earnings call with CEOs of 2,500 companies in Q4, 2021, 60% of CEOs discussed pandemic-evoked supply chain disruptions—up by 30% from the previous quarter—according to IoT Analytics, a provider of market insights and strategic business intelligence. The firm’s survey tracked keywords that appeared in the earnings to ascertain CEO priorities for the year 2022. Talent wars, climate change, and a series of digitalization focused subjects are some of the terms that peppered the calls. From our ear to the ground, here’s our take on the CEO priorities.
Given that inflationary pressures are systemic, how can successful companies thrive under today’s pressures and drive business transformation? Here’s our take on the top 4 business priorities for CEOs during the rest of 2022:
4 key business priorities in 2022
1. Climate change and decarbonization
Larry Fink, BlackRock’s Chairman and CEO, writes a letter to chief executives and BlackRock’s clients laying out the fund’s investment philosophy. Addressing the tsunami of money moving to sustainable investments, in the 2022 letter, Fink wrote, “every company and every industry will be transformed by the transition to a net zero world. The question is, will you lead, or will you be led?” When the CEO of the world’s largest fund throws down the gauntlet, business leaders listen.
Meeting decarbonization goals by 2050 is now table stakes for CEOs. Analysts and pundits find a correlation between decarbonization efforts and an entire swathe of business performance indicators—from stock price to a CEO’s job security. Meeting these goals is no longer a nice-to-have.
How do you decarbonize at speed? At the onset you need a clear, structured framework that helps you measure your businesses carbon footprint and then lower your carbon output. At Proudfoot, we help you could see your carbon output number, clearly view the elements playing a part in these results, and take decisive action to improve your carbon emissions (stages 1, 2, and 3) at speed.
2. Hiring and retaining talent
The Great Resignation was the buzzword through 2021 and employees have resigned en-masse. Result: an endemic talent shortage in practically every job and vertical enduring through 2022—and it’s beginning to hurt bottom lines.
Take the example of Hain Celestial, a US snack food company1. A plan to consolidate two U.S. snack plants last year went awry due to a severe labor shortage. The company could not find the 200 workers needed to staff the new plant. Eventually, Hain produced overseas and flew in the product—“at a huge cost” . In an interview, the CEO said it was necessary so that shoppers would not replace the company’s products with a rival brand.
The writing is on the wall—CEOs and managers must focus anew on what defines employee engagement in the post-pandemic environment to retain and attract talent. Engagement is one of the most critical items you can address at speed to retain current employees and attack a new generation.
“If you want to be a great leader, you must first learn to manage your people,” asserts Pamela Hackett, former CEO of Proudfoot in her book, Manage to Engage.
We offer pragmatic solutions, culled from evidence-based behavioral research from 50,000 transformation projects and coaching 1 million leaders: such as, HeadsUp, active management behaviors and the 1:5:30 check-in rule.
Concepts such as augmented reality, virtual reality, and Industry 4.0 and automation are also front-and-center for CEOs as the IoT Analytics survey indicates. We believe all of this ties into Digitalization.
The pandemic has accelerated the need for companies to digitalize faster than ever. For one, consumer behavior, be it the usage of QR codes or online shopping, has changed significantly and is unlikely to revert to what it was before. These digital natives are looking for access to information, groceries, and travel insurance at a touch of a button.
A digital transformation (DT) journey is one with continuous steps and pivots. But how do we reassess and recalibrate to better move forward on our journey? You should embrace an agile change model that enables successful digital transformation, else the DT effort may fail—and many do.
At Proudfoot, our framework-Results Hub- failure-proofs your business’s DT effort. What is it? The framework ensures that your business has a methodology where change is embedded with a clear roadmap, robust governance, employee buy-in and streamlined processes that sustain DT projects consistently. In summary it is the framework that overlays any digitalization project and sets it up for success, while engaging people in that change. Afterall, we know that nothing moves, until people move!
4. Managing supply chain disruptions
Supply chains are very much in the eye of the storm. The disruption will exacerbate with the inflationary pressures. The only way forward is to re-purpose the supply chains for resilience. Today, there are emerging supply chain technologies that can veer organizations away from legacy, inflexible IT systems to a new way of sourcing and diversifying supply chains.
Proudfoot uses the digital sourcing approach, leveraging both artificial intelligence and big data, to redo your sourcing while transforming your procurement function. We’ve delivered some path breaking results for our clients, such as 80% average spend reduction per category and a 15% total procurement cost reduction.
In summary, the new normal is a term that defines and redefines itself constantly. The business landscape churns and evolves constantly and organizations must be agile—on the shopfloor and in boardrooms—to focus on operational excellence and improvement, productivity gains, while having an impeccable safety record – all while navigating the accelerated economic and people challenges of 2022.
In its 75-year history, Proudfoot has worked with thousands of organizations to create lasting, sustainable business transformation change by working alongside our client’s people. Through 2020 and 2021, we worked with our clients, virtually and on-the-ground, to transform businesses at speed, creating build-back plans that allowed companies to thrive while engaging people through the vast changes happening worldwide.
In 2022, we’ve already worked with global CEOs from multiple industries, from Resources to Private Equity firms, to operationalize their decarbonization agendas, bullet proof their digital transformations, de-risk supply chains, and accelerate behavioral change through engagement programs that Manage-To-Engage all stakeholders.
As we enter the last few weeks of Q1 2022, the questions remains, are you leading the change required to navigate the challenges of 2022?