The two biggest pressures for CEOs today revolve around international expansion and recruiting the right talent. Invariably, the two are linked, as it’s a case of finding and engaging people who have the breadth of skills and knowledge to help unlock the potential of new markets.
Ian Edmondson, Chairman and Managing Director of Dunlop Aircraft Tyres, sees opportunities across Asia, Russia, Brazil and Africa. “The concern is how to find, motivate and retain good staff as one of the challenges is to successfully recruit foreign nationals for key leadership roles and to restructure the way the company operates as it transforms from a regional to a global business.”
It means taking calculated risks.
Mark Hunter, CEO of claims and risk management business Airclaims, says: “Growth overseas is our priority right now; China is supposedly building 90 new airports in the next 10 years, but there is always a number of political factors and relationship differences [you have to accept], such as an initial lack of local knowledge and the need to maintain a justified presence through employing local people. So if you are going to make a sizeable investment and an immediate impact, it is crucial you get that timing right.”
Brain drain
Massive growth brings with it new challenges.
Bryan Marcus, South America Director at financial services provider VW Credit Canada, explains: “Upgrading IT solutions and securing the best talent are prerequisites for any successful change or transformation programme. But Brazil's growth has led to significant shortages of IT professionals, increasing business change and product development costs. It’s enough to put some projects on hold and it has diminished our flexibility – our key differentiator compared to the very large banks in Brazil.”
As a result, good communication is vitally important: “Project milestones can be delayed and one of my major challenges is managing the expectations of key stakeholders, shareholders and headquarters, who demand high performance in the BRICs, especially given the economic challenges in Western markets.”
Indeed, domestically, the picture is equally complex.
Adrian Gunn, CEO of recruitment agency, Matchtech, explains: “We’re seeing a two-tier economy for the UK. We have growth opportunities as the product demand from overseas is creating demand for staff that we are fulfilling.
“However, there are two million people unemployed here, but what is available in the UK and what is required actually points to a bizarre skills shortage and looking at ways to overcome that is time-consuming.”
According to Adrian, there are huge issues around training that have to be addressed. “What worries me is that the organisations that are growing rapidly from global demand will put their investment elsewhere. As a leader I can target and pursue opportunities, but a lot of it is out of my control.”
The race is on for businesses to up-skill and adapt swiftly. For example,
Andy Hague, UK CEO of HR outsourcing provider, Croner, has had to churn “maybe 25 per cent of the workforce” in order to bring in sales people who can thrive through selling online, as opposed to just via the traditional channels of phone and print.
David Wither, CEO of the AIM-listed hi-tech manufacturer Sarantel, says that “the idea of having a knowledge-based economy is absolutely vacuous and unbelievably arrogant”. He explains: “Our suppliers being overseas stretches the supply chain, and once those manufacturing bases have gone overseas, they’re gone.
“You need to bring manufacturing back [to the UK because] the way that technology develops is by learning through making things. There is an unbelievably arrogant Western feeling that we can let other people do ‘dirty manufacturing stuff’ and we’ll be able to come up with the best ideas, even though they are the ones with the latest manufacturing technology.”
The money pit
While ‘bootstrapping’ may be nothing new for companies, the ongoing austerity is certainly testing the resourcefulness of CEOs, not least those in the public sector.
Jane Furniss, CEO of the Independent Police Complaints Commission, says: “The outlook for the public sector is a continuingly tough need to make savings, reduce expenditure and make redundancies, including closing offices and supporting staff to work from home or elsewhere. It presents a huge change to our way of working.
“How do you demonstrate that you value your staff as a leader and that you want to respond to external customer feedback about your service? When there’s no more waste to be found, where do you go next? It’s going to get harder to become more efficient just through cuts.”
The environment for listed companies may not be quite as savage as for organisations in the public sector, but there’s no question that financial backing and support remains hard to come by.
Stephen Mohan, MD of Operational Services for financial trading platform provider, Cofunds, identifies the main challenges for a CEO at present as “the dire economy, major costs of change to cope with a tsunami of new and sometimes conflicting regulation, and the demand for increased capital”.
In terms of the latter, David suggests that “juggling resource constraints is without a doubt my biggest challenge as a leader – the biggest hurdle as a small technology company is access to capital”. He laments: “One of my deep frustrations is the lack of technology savvy investors. The UK has some of the best scientists and engineers on the planet but there are no Apples or Microsofts here because the US investment community is willing to make much bigger bets.”
Loud and clear
The ability to handle pressure is one thing, but the CEOs who really stand out have to go beyond that, especially when looking to implement a new strategy. Mark says: “Communication is on the agenda right now as employee engagement is absolutely critical. We went through a sale last year, which will distract any business; people have gone from being on a bit of a high to being uncertain about the future and it is critical they understand where we are going.”
It’s a skill that demands greater investment of leaders’ time. Adrian comments: “Communication with staff is taking a lot of my schedule now – internal comms is as important, if not more important, than external comms as unless people have faith in where the business is going, they will leave.
“You have to adapt your styles though: I have to give my recruitment consultants a more simplistic and clear message than the one for lobbying up to industry bodies or speaking to investors, which is much more reliant on statistics. If I communicated in the same way I would lose both audiences.”
These issues are all connected, of course.
Andy Dunkley, CEO of Red Diamond Holdings, owner of the Lee Cooper clothing brand, notes: “The trouble I have is communication over our 90 countries, distilling and explaining the essence of my vision and ensuring that people everywhere can understand it. These issues aren’t new but everything comes at you much quicker today; global branding goes online and around the world instantly and if you aren’t very careful, it quickly turns into firefighting.”
Although most leaders are equipped to deal with the various demands of customers, stakeholders and staff alike, support is becoming ever more necessary. Top talent is vital, not least in the form of a strong non-executive team providing essential oversight and clarity amid the din of an online and always-on business.
Boards must work together to provide precious space for leaders to pull back, assess and ultimately decide how to formulate the best strategy when operating on an international stage.
Please get in touch if you have any comments about the issues raised here.
I hope to see you soon.
Matthew
