In his 2024 outlook, Stephen Miles, CEO of The Miles Group, anticipates a transformative year for CEOs. Reflecting on the challenges from 2023 and the aftermath of 2022’s tech surge, Miles emphasizes the need for CEOs to exhibit performance-centric flexibility when navigating uncertainties to be successful.
As organizations brace for the complexities of 2024, Stephen Miles’ insights offer a strategic guide for leaders, helping them to thrive in a dynamic business landscape.
1. The continued evolution of the CEO role
The CEO role has changed more in the past five years than in the previous 20. The position continues to evolve from “running the Company” to "protecting the Company’s license to operate." Fortune 500 CEOs are spending more of their time on a broadening spectrum of responsibilities, including crafting social responses to divisive world events and engaging with their boards of directors, governments, NGOs, regulators, communities, and employees on key megatrends around ESG, climate, carbon, the decoupling from China, packaging, and ethical sourcing amongst many other variables that impact their businesses in an ever-changing and complex environment. Then, you overlay considerable inflation and continued supply chain constraints with two wars, and the need to engage with the global community and develop influence that can help best position their companies to navigate the complexity becomes more apparent than ever for today’s highest-performing Chief Executives.
The list above does not actually include much about "running the day-to-day operations of the company." This implies that today’s CEOs must focus on talent selection and rely on a cohesive team more than ever to adequately divide responsibilities and effectively operate a global business. Boards should be proactively challenging CEOs on their top talent selection and capacities, and encourage CEOs to move on from underperformers quicker than ever before.
2. Utilizing dynamic prioritization
As we head into 2024, one thing is clear: not one CEO can confidently tell you what is going to happen tomorrow. The world is now multivariate, and no one really knows or can predict many elements of the future, leaving leaders and employees with higher levels of uncertainty. CEOs now need to have a set of both longer-term and short-term goals, and then build an organization that can do the hand-to-hand combat and zigging and zagging, dealing with the day-to-day unknowns, in order to prioritize, sequence, and re-prioritize to deliver value. The competitive advantage going forward will be company cultures that are "built for change" and able to respond fast to whatever the world throws at them.
Leaders will need to emphasize a “learning first” culture to respond to uncertainty with a data-informed, growth-mindset approach, removing any assumptions or fears of challenging the status quo.
3. The disappointing return to the office
Most CEOs are surprised by how defiant their employees are regarding a full return to the office, as we have seen extreme employee reactions to both carrot and stick approaches. Many CEOs see the return to work after the holidays as an opportunity to push even harder for people to come into the office, not just two days a week but most of the time. This is a battle that will continue to play out as the power shifts from employee to employer, leaving CEOs and CHROs with the delicate task of threading the needle on the office while unemployment remains at an historic low.
The CEO and CHROs who continue to design more intentional in-office time (hybrid or full-time) that is value-additive to the employee proposition model as well as the company’s operating outcomes will continue to separate themselves from competitors. This combination of employees recognizing the value of being together combined with some level of momentum in the business will create stronger team alignment, leading to efficient use of dynamic prioritization within the organization and higher degrees of trust as a result of spending more quality time together delivering quality outcomes.
4. Generative AI
In 2023, we all learned about Generative AI through ChatGPT and most people were amazed. During 2024, we will start to see how Generative AI affects all parts of our daily lives, including our work lives. Don’t be afraid of AI; be afraid of people and companies that know how to use it. AI has the potential to disrupt many aspects of people’s work and could have a profound deflationary effect on the global economy in the coming years. CEOs will need to get off the sidelines and embrace elements of AI inside their companies. This will force discussions around when and how AI can be used by employees to do their jobs: hello, ChatGPT writing people’s year-end reviews. CEOs will have to navigate a governance model with their teams on what is allowed and not allowed with Generative AI and ChatGPT in the workplace.
5. The continued shift from potential to performance
The beginning of 2023 ushered in a significant shift for technology companies that previously operated in a free money ‘potential’ driven world, where the total addressable market was unlimited and measured when we colonize Mars. Today, money is no longer free, and we need to move from moon shots to slingshots. This was most pronounced when Mark Zuckerberg declared 2023 the ‘year of efficiency’ at Meta, and the result: hundreds of billions in market cap appreciation. Even companies where this would not even be considered, like Salesforce, have now drunk the performance Kool-Aid, and ‘Ohana’ is now ‘do a lot more with a lot less’!
Expect the performance world to continue into 2024, with company CEOs continuing to tighten up their workforces and limit new hires. The movement to do more with fewer people is upon us, and many CEOs are quietly pushing this hard inside their companies, and Generative AI will help accelerate this into 2024 and beyond.
6. Leading in the US election year
Many CEOs have been schooled on weaponized social issues, costing them their jobs and/or massive company setbacks. Two words for 2023: Bud Light. As we enter into a U.S. election year, the forces of polarization will never be greater, and that pressure will move into the boardrooms and C-suites of corporate America.
Taking a stand on any topic will likely cause backlash this year, and CEOs must be prepared to answer (or not answer) many questions ranging from policy to their stance on an individual political leaders’ fitness for office. CEOs and board of directors need to be prepared with a consistent approach to handling these challenges that lie ahead. Do you want to address an issue or policy that’s completely irrelevant to running your business? That’s OK, as long as you're willing to answer them all.
For corporate leaders who have a responsibility to their Company’s shareholders, employees, and customers, the best approach likely involves taking a stand on issues that directly impact the business while allowing individuals to have their own personal beliefs outside of the workplace on every other issue. Brian Armstrong’s approach at Coinbase faced immediate backlash two years ago and has now evolved into a de facto standard for many of the world’s most prominent leaders.
7. Regulation
The regulatory environment is no longer dormant, which was again made apparent after the Adobe/FIGMA merger break-up due to pressures from regulators in the U.K. and E.U. This increase in regulatory enforcement has and will continue to impact how businesses can operate. We will continue to see a large decrease in $20 billion acquisitions, with of course a few outliers coming close such as the Nippon Steel/U.S. Steel merger at $14.9 billion and the Bristol Myers Squibb/Karuna Therapeutics merger at $14 billion.
Aside from a few occasional large mergers and acquisitions, a shift is beginning to occur: CEOs are moving away from using large-scale acquisitions to save their jobs or failing businesses. Now, they're boot-strapping their companies and focusing more on growth and profitability. The focus on “creating the business of tomorrow” and risk-taking on earlier-stage companies (e.g. Airbnb paying $200 million for a 2-year-old company) will continue to rise and change how companies operate.
8. Soft landing or stagflation
Many of the economic pundits have now been talking about a soft landing for the economy and are less focused on a global recession. If Powell and his compatriots around the world can bring the global economy into a soft landing, they will do something that has never been done under similar conditions. The question is whether the economy is kicking the can on a recession through an incredibly strong employment environment or whether we really will have a soft landing. An early look could be New Zealand, which is the first country to enter into stagflation (low growth with sticky high inflation), and we need to assess if this is a weak signal for the rest of us or just an anomaly. CEOs need to keep their antennas up, making their peer networks and external engagements all the more important.
9. World War III
The war between Russia and Ukraine, and now Israel and Hamas, has the potential for the world to enter into World War III with massive implications for every company leader (and every citizen). The potential for escalation in the Middle East is high and could lead to engagement by the USA and NATO. If China decides to enter Taiwan, all bets will be off, and a new global war will be in effect with massive implications for everyone.
The elements of the various wars are another front for CEOs to navigate. We have already seen the presidents of a number of prestigious academic institutions fail under the pressure of direct questioning in front of Congress on questions of antisemitism. Not only are CEOs now under high pressure and scrutiny when sharing political messages, but they are also in a similar position to the post-9/11 security crisis. Leaders have to now spend a great deal of energy and time thinking about crisis prevention, both physical and cyber. More and more companies are facing cyber attacks each day, and it's becoming almost the norm to minimize the threat and hope it’s not sophisticated enough to take the company down.
These delicate and difficult times are when the executive role holds the most gravity, while presenting the trickiest period for vision execution. Those leaders who perceive the ever-changing world accurately — bracing their organizations for tumultuous global issues and rapidly evolving technology — will find themselves the best equipped to succeed.
For more information, visit https://miles-group.com.Follow TMG on Twitter and LinkedIn, and Stephen Miles on Forbes.
About Stephen Miles:
Stephen Miles is the Founder and CEO of The Miles Group. Previously, he was a Vice Chairman at Heidrick & Struggles and ran Leadership Advisory Services. With more than 20 years of experience in assessment, executive coaching, top-level succession planning, organizational effectiveness and strategy consulting, Stephen specializes in CEO succession and has partnered with numerous boards of global Fortune 500 companies to ensure that a successful leadership selection and transition occurs. Listen to Stephen on TMG's C-Suite Intelligence podcast.
About The Miles Group/TMG:
TMG develops talent strategies for organizations, teams, and individuals – focusing on high-performance, world-class leadership. Through assessments and development, coaching, leadership transition planning, and organizational design, TMG helps clients cultivate exceptional talent from the C-suite to the next generation of leaders throughout the organization. Clients include many of the Fortune 100 as well as VC portfolio companies, firms in transition, and organizations around the globe and across industries. TMG has been featured in Harvard Business Review, The Wall Street Journal, Bloomberg, Forbes, Fortune, C-Suite, Entrepreneur, and Chief Executive. The firm is headquartered in New York City and operates globally.
For more information, visit http://miles-group.com.
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