CEO Challenges for the 21st Century Business
Business practises date back centuries when there were small businesses with local customer bases and little socioeconomic pressure. With rapid industrialization in developing and developed countries, the business has grown in size and complexity over the years, becoming multi-product and multi-location (and multi-national), and serving a diverse range of customers worldwide. A modern business is distinguished by the predominance of several socioeconomic factors.
Business, as we know it, is about trading – buying and selling and using money as a medium of exchange. Apart from trading, a business may also be involved in manufacturing, managing any kind of transformation or conversion process where certain inputs (like physical, human, financial and informational resources) are processed to be converted into useful products or services. These processes create significant value addition. This value addition forms the basis for surplus generation and/or profit creation in business.
Business and the business environment have been changing at a fast speed – both the changes and the speed of change are very important. As such, the impact of the socio-economic state and structure of the region (and the rest of the world) has become very important in business.
So, in this context, the CEO’s job has become invaluable.
The entrepreneur, the full-time director, or the CEO charged with managing the day-to-day operations of a modern business enterprise must therefore wear several hats in order to achieve an impressive bottom line in their business operations. They must build an effective and self-motivated team of competent employees, create world-class internal business processes, and implement appropriate mechanisms for delegation, decision-making, execution, monitoring, and control.
With this goal in mind, CEOs must frequently invest in training programmes for themselves as leaders in order to recognise and overcome workplace challenges. These coaching programmes, which are frequently executive coaching programmes or leadership training sessions with an experienced executive coach, assist CEOs in learning the skills and tactics that effectively assist them in identifying challenges and learning how to overcome these challenges for the betterment of the company as a whole.
A CEO both manages and governs.
Further, the CEO managing a modern business enterprise must distinguish between corporate management and corporate governance – they have to perform both the management and governance functions simultaneously in the best interest of the organization.
What is the difference, you may ask?
Corporate governance differs from corporate management in that governance is primarily about protecting a business, while management is more about growing it.
Corporate Governance
Corporate Management
Governance refers to the policies and procedures set in place to ensure a business operates within the law and for the optimal benefit of all stakeholders.
Management refers to the techniques executives use to help the company operate and flourish.
For example, governance policies might include prohibiting a board of directors from awarding contracts to board members’ companies or the companies of family members. A business might require its accounting department to have two signatures on any cheque it writes to reduce the threat of fraud.
Examples of management include setting budgets, giving staff members directions, and making strategic plans for marketing or product development. Corporations usually have management teams once the company becomes too big for the founder or one individual to oversee the entire business.
So, what are the challenges for a CEO?
Building knowledge
Any new CEO should take the time and resources necessary to thoroughly review all aspects of the business, including current positions and responsibilities for all employees, all processes and procedures that are currently in place, short-term goals and long-term objectives, growth, and development opportunities within the company, and so forth.
Taking feedback
CEOs must gather feedback from team members to see where the company may be lacking that could contribute to employee turnover rates or where there are areas for improvement, such as the need for additional resources in a certain department.
Tackling Inertia
The CEO must pull themselves away from what was previously done and fully evaluate every aspect of the business to ensure only the most productive and efficient tactics are in place to retain talented employees and keep revenue flowing.
Making those unpleasant decisions
The CEO must take the entire company into account when making important business decisions. If the majority will benefit from a particular decision, then it is often best to move forward with that decision – even if it makes displease some colleagues you previously worked with closely.
Executing change
CEOs must understand that change is accepted, but it must be put forth at a pace that employees and other stakeholders can adapt to. CEOs cannot simply implement rapid changes without taking into consideration how team members and clients, or even investors and supporters, will react to these changes and how fast they are being executed.
Being a CEO of an organization is a great honour, but with this honour comes along with great challenges as well.
References
Mattone, John. “Top CEO Challenges and How to Overcome Them.” John Mattone Global, Inc., 26 Aug. 2022, johnmattone.com/blog/top-ceo-challenges-and-how-to-overcome-them.