This year should have been harder. Inflation was expected to depress customer spending. A recession loomed. You wouldn’t be crazy to think that supply chain issues could come between you and your toilet paper again.
With the job market and economy looking slightly better than forecast, some economic observers are beginning tosoft landingstory. The prospect that inflation can be slowly brought under control without pushing the economy into recession means business leaders don’t have to operate in all-out crisis mode.
But that doesn’t mean everything is going smoothly. Here are some of the key challenges business leaders face today and how to tackle them.
1. Living with economic uncertainty
While the economy is not as bad as many predicted, unpredictability has created unexpected challenges. Consumer behavior does not match economists’ forecasts. People just keep publishing, even when the best forecasting tools say they shouldn’t be. When they do spend money, they prefer low prices to brand loyalty, which makes forecasting demand even more problematic.
As a result, leaders do not know when to lower or raise prices. In the meantime, layoffs are commonplace at companies like Spotify and Amazon, even as the healthcare, hospitality and retail sectors continue to face labor shortages. In short, no one really knows what’s going on and consumers may lose faith in their favorite companies.
Companies that do well in the second half of 2023 will be the ones that act prudently but flexibly. They will take cost cutting seriously and adjust prices accordingly, but not drastically. They will streamline their organizational structure, ideally while avoiding mass layoffs.
Perhaps most importantly, successful leadership teams will communicate clearly and transparent towards employees and customers. The tough battle for consumer confidence will continue in the coming years. Justifying decision making that seems erratic will be a big part of any company’s survival strategy.
2. Manage remote work and retain top talent
Working from home is no longer the mess of 2020. But working from home and hybrid office arrangements continue to present challenges in the workplace.
According to Forrester, 40% of companies will try to end the work-anywhere policy in 2023. The consulting giant believes the push for AI monitoring of remote worker productivity will drive more than half of WFH employees to seek new employment this year.
These new company policies regarding remote and hybrid work will erode employee trust in their employers over time. And with continued employee turnover and morale issues, employees’ perception of their company is more important than ever.
Company leaders will have to find ways to keep employees happy or risk them leaving as voluntary turnover continues unabated. Retaining talent starts with better pay and benefits where possible. An improved corporate culture can also make a difference.
Leadership teams should survey employees to gauge employee engagement, or better yet, schedule one-on-one interviews to gather information. They should look for more ways to keep employees motivated, especially in the form of growth and learning opportunities.
3. Repel security threats
In 2022, the US saw 1,802 data breaches, which affects 422 million people. Data breaches will continue to be a major business problem, especially as working remotely is likely to further complicate cybersecurity. Employees work over less secure connections or take equipment outside, exposing them to outside threats. Many access sensitive work data from their phones, which are more vulnerable to hacking attempts.
AI will also become an increasing threat to cybersecurity as hackers use generative AI to create sophisticated scams. But the disease can also be the cure: AI and machine learning can alert companies to irregularities such as attempted breaches.
Businesses will need to upgrade their security protocols to avert cyber-attacks. This includes everything from installing robust cybersecurity software to training employees on how to avoid phishing scams. They will need to invest in the right tools for the job and in training employees with access to personally identifiable information.
Savvy leaders will take cybersecurity extremely seriously and implement response plans before a crisis erupts. They will observe strict authentication protocols and carefully limit employee access to sensitive data. They know what steps to follow in the event of a breach and how to communicate it to the public.
The unpredictability of the past three years has changed the behavior of employers, employees and customers. Therefore, providing a greater sense of reliability and transparency is imperative for modern businesses.
Customers need to know that companies offer consistent quality and value. Employees must believe that their employers will drive their growth. And everyone – customers, employees and employers – needs to be confident that their data is safe from attack.
Companies that thrive in the coming months and years will be those that provide a sense of security and stability. They will act in a way that lets their employees and customers know they can be counted on no matter what. And they are making a name for themselves by giving people something to hold on to during this uncertain time.