As the transition into 2023 begins, it’s essential to note the changing business landscape witnessed in 2022.
For those in the C-Suite, last year was rife with challenges. Executives dealt with supply chain issues that impacted large swathes of the economy, rising inflation that increased costs across the board, and a sudden war that arose between Russia and Ukraine, further harming the economy.
While the future is unpredictable, those issues continue to plague companies in almost every industry.
Internal pressure from employees concerning demands for more pay and greater flexibility benefits is likely to continue. Organizations with weaker cash flow will want to hold on tight to available funds as the potential for a recession increases and available money for investment dries up.
Executives will need to evaluate their external and internal pressures to ensure they make the most of their organization’s potential in a complex business environment. In 2023, certain executive positions will be critical in navigating this year’s anticipated obstacles.
The Chief Executive Officer (CEO) is arguably the most important executive in the C-suite. Seen as the face of the organization, the CEO oversees all facets of the business, ensuring they work together to meet various directives and objectives in the company’s vision.
However, CEOs are getting older, and we will likely see a lot of turnover over the next few years. Approximately 81% of today’s CEOs of organizations in the S&P 500 are between 50 and 65 years of age. As they step aside to let new leaders take over their organizations, we’ll witness fresh ideas but also a potential loss of business knowledge.
Current CEOs should ensure a proper succession for their new heirs to minimize the loss of critical expertise and ensure a smooth transition.
Another trend that new CEOs must be aware of is sensitivity to DE&I issues and company reputation. It’s no longer appropriate to lead exclusively with IQ; leaders must possess a strong sense of self-awareness and EQ, too.
For instance, employees and customers are no longer willing to put up with racism, gender inequality, and other tendencies toward discrimination. CEOs must thoroughly embrace DE&I as a talking point in every aspect of the business, from hiring and promotions to client care.
Finally, the cult of over-the-top leaders appears to be over. We’ve seen numerous fiery personalities grow to prominence, only to see their flame die out for various reasons. One of the most recent examples in the business world is Sam Bankman-Fried, the CEO of FTX, a cryptocurrency exchange once worth billions of dollars.
Sam Bankman-Fried won over millions of people to cryptocurrency through his ambitious plans to woo regulators, politicians, and celebrities to the crypto world.
Still, he failed to look after the intricate aspects of the company’s financial mechanics. Following the spectacular collapse of FTX, he’s now facing charges of fraud and money laundering that may lead him to decades in prison.
The general public is tired of stories like Bankman-Fried’s, and they want to see genuine leadership in business, not executives who earn their roles through enigmatic charisma.
The Chief Human Resource Officer (CHRO) role is relatively new to the executive suite. Still, more organizations are finding it something they can’t afford to be without. Companies have increasingly seen the need for greater DE&I within the workforce, and they’re struggling to ensure employees feel comfortable in the organizational culture.
While the CEO can establish a DE&I vision, typically, it’s the CHRO who implements the changes. Unfortunately, many companies find it difficult to fill senior CHRO roles due to a lack of available talent.
The lack of talent results in sluggish initiatives toward DE&I and overall company culture since mid-level managers often don’t have the capability to drive high-level transformations.
Another shift CHROs deal with includes the ongoing debate of remote versus in-office work. Employees tend to favor flexible work plans, allowing them to work from home some or all the time. Conversely, many employers would prefer to see their workers in the office.
While some organizations allow their employees to work full-time from home, others aren’t quite ready to take that big leap. As a result, CHROs must decide how to incorporate more flexibility into the office.
Remote work, the four-day workweek, and hybrid working arrangements are likely to continue to dominate the conversation in HR offices for the upcoming year.
The Chief Revenue Officer (CRO) has a tough job for 2023. In an environment of rising prices and consumers cutting their expenses, they must maintain and even increase sales to protect their organizations from losses.
To do so, they’re turning to sustainable revenue generation — or revenue that isn’t susceptible to a negative economic environment.
In times of financial pressure, companies tend to cut their marketing budget and other similar expenses to drive down costs and protect income. Thus, many organizations may cut the CMO role, assigning marketing duties to the CRO instead, or refuse to fill the role until market conditions improve substantially.
However, organizations can’t afford to fire their CROs. The CRO has too much responsibility for driving more sales and ensuring customer satisfaction. Instead, companies must push their CRO to create even grander solutions for increasing revenues, especially in the face of an economic downturn.
Chief Financial Officers (CFOs) are often seen as an organization’s second most important leader. Tasked with overseeing the financial reporting and budgeting of a company, along with acting as the company’s financial spokesperson with potential investors and existing stockholders, the CFO has much to do.
Many economists are predicting a recession in 2023. Recessions tend to result in greater scrutiny of CFOs, especially if the company misses expectations for sales or sees an unexpected dip in income.
Essentially, CFOs should anticipate changes in the income statement and balance sheet, even if they don’t have operational control over departments that impact the financials.
In past decades, CFOs possessed limited responsibility relegated to the financial statements. They’d ensure the company underwent its required audit and maintained proper accounting controls, but they didn’t have the insight that modern CFOs now own.
In the present climate, there’s much more emphasis on current company performance. Rather than waiting for the organization to close its books, which may not happen for weeks after a month-end, businesses expect CFOs to know the organization’s current financial status at all times.
To do so, CFOs emphasize timely reporting, business intelligence, and key productivity indicators (KPIs).
They work closely with managers in their accounting and finance teams to ensure they have a clear and factual picture of customer collections, sales, cash flow, and upcoming payments due. Making use of financial forecasting (FP&A) strategies is key.
CFOs also place a premium on investor relations. While the CEO handles most of the external communication between the board of directors and company investors, the CFO is responsible for ensuring investors are aware of current issues that may impact share price, revenues, and expenses.
CFOs must interact with the board of directors and investors and inform them of potential future roadblocks or opportunities.
Going into 2023, CFOs should expect many internal and external questions as companies navigate a challenging time in the economy. They’ll need to be ready with quick and accurate answers to keep all stakeholders happy.
In recent years, private equity firms interested in a quick turnaround of their investment hired innovative executives with impressive ideas for the top jobs in their acquired companies.
Those new executives might not have had the experience that a seasoned manager would, but they often had bounds of energy and an optimistic outlook that was exciting, especially for growing companies.
Today, private equity organizations are less likely to risk hiring youthful talent for executive roles in their acquisitions. They don’t want to lose money, especially in an economic environment that can quickly turn sour.
Instead, private equity organizations are seeking executives with ample experience driving results in other organizations. Former COO, CFO, or CRO operating partners will see a higher demand for their abilities.
The trend of hiring experienced professionals for the CEO, CFO, and other high-ranking executive roles is expected to last throughout 2023 until the economy shows significant signs of recovery. Experienced executives looking for a change will likely fare better than those with less knowledge of running a company’s daily affairs.
The CIO, CTO, and CISO positions are responsible for handling all aspects of an organization’s technological affairs. The CIO traditionally oversees the management and implementation of an organization’s systems and internal software, while a CTO handles the company’s research and development efforts and technology needs.
The CISO is a relatively new position responsible for managing an organization’s cybersecurity. They ensure that the company remains invulnerable to potential hacks that can devastate clients and the company’s reputation.
While large organizations will likely continue to maintain separate positions for the CIO, CTO, and CISO, smaller and mid-size companies might combine the functions into one or two roles to save on expenses. Combining responsibilities can ensure that there is still coverage for critical tasks while also allowing the organization to cut costs.
For example, CTOs with CIO backgrounds, as well as CIOs with cybersecurity experience, are not uncommon.
If executives don’t have enough experience in specific functions to combine the roles, organizations can also consider outsourcing to generalist executives who can oversee large teams. Outsourcing allows companies to save money while protecting the business from threats or lack of knowledge in key tech areas.
Unfortunately, in times of economic uncertainty, marketing is typically one of the first departments to see a hit to their budget. After all, if customers are tightening their belts, there isn’t a need for lavish spending on commercials, digital advertising, and other advertising means.
Organizations seeking to reduce their marketing expenses will emphasize the ROI of advertising campaigns. To keep the marketing dollars flowing, CMOs and other marketing executives must prove their funds effectively drive sales and attract customers.
Proving ROI for marketing campaigns will require more effective data analytics on customer behavior. We expect that marketing departments will develop strategic indicators that identify successful and non-successful advertising activities, allowing companies to quickly make adjustments to conserve their marketing budgets.
Companies that seek to hire for the VP or Director of Marketing role in 2023 will look for individuals who will both lead the department and handle the intricacies of daily marketing responsibilities. They will want people who can implement new policies and develop engaging ideas, not simply manage the marketing department.
Another trend to expect in the marketing department will be less spending on digital advertising. Since the COVID-19 pandemic, costs for digital marketing have skyrocketed.
In today’s economic climate, companies will be looking toward cheaper alternative methods to reach their consumer audience that reduce their reliance on pay-per-click ads and social media advertising.
The key trends executives will need to address throughout 2023 will be budgets and spending. Companies will seek executives with a history of strong leadership throughout turbulent economic times.
Organizations will expect their new leaders to take the reins quickly and turn the focus to saving money, increasing or maintaining sales, and ensuring that the company remains competitive, even as customers hold on to their cash.
Another major trend to look out for is combining functions, especially for roles such as the CMO and CRO, and CTO, CIO, and CISO.
Smaller and mid-size companies will likely seek to manage their cash flows by hiring or outsourcing single individuals to handle multiple roles in sales and technology, at least until the economic uncertainty abates.
Finally, organizations must continue to pay strict attention to human resource concerns like DE&I and workplace flexibility. Despite the current economic turbulence, employees still have their pick of available jobs. They want to work for companies that value diversity and embed it in their culture.
While companies have begun to force more workers back to the office, remote work is still widely preferred. Executives will need to continue to support flexibility initiatives to attract top talent to their workforce.
Focusing on these critical trends can ensure executives successfully navigate the anticipated challenges in 2023.
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