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6 Issues CEOs Face Today

| February 17, 2015
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Many rank-and-file employees don’t fully understand the role of their company’s CEO. Often, they think that the CEO of the company has it easy, but that is rarely true. In the vast majority of cases the individual occupying the corner office got there through years of dedicated education, service and hard work. Once there, the CEO carries the weight of the entire organization and is responsible for the careers of everyone who works there.

No matter what the industry is, CEOs in the modern business landscape face a number of serious challenges. Here are 6 of the most significant issues facing CEOs today.

1. Economic Growth/Changes

Even the best CEOs face factors that are completely outside of their control. Economic growth cycles are notoriously difficult to predict, and responding to those cycles to affect success requires skill, experience, and foresight. The person in the corner office has no way of pinpointing the next recession and cannot know how long it may last.

Commodity prices fluctuate, impacting the cost of production and profitability. The CEO of an oil company is successful when oil prices peak, but a sudden surplus of cheap oil could spell disaster. Even though those external factors are beyond the CEOs control, he or she is still responsible for the financial health of the company and the well-being of all its employees.

The ability to insulate the business from economic downturns is an important factor to the success of the CEO. Diversifying company income streams and securing futures that keep the company profitable in the long-term may help CEOs grow the company in lean financial times.

2. Technological Changes

Even the most experienced CEO may not be able to foresee how changes in technology will impact the short-term and long-term prospects for their companies.

The CEO of a cable company might realize that streaming video is becoming more popular, but could miscalculate the speed of the revolution or its impact on the underlying business model. A car company CEO might understand that self-driving cars are on the horizon but still find it difficult to adapt to the rapidity of technological change.

Because a CEO cannot be a master of all aspects of the business, surrounding one’s self with subject matter experts is important to continued success. Hiring or developing a technology expert will help the business predict upcoming technical changes in your industry.

3. Retaining Customers

Creating a positive customer experience is essential for those businesses that interface with consumers. No company can succeed without top-notch customer service and the ability to stay ahead of market trends.

Modern CEOs have a number of tools at their disposal as they seek to retain existing customers and attract new ones. Social media can be a powerful ally, allowing company executives to talk directly to customers, gauge the pulse of the market and learn what individuals really want from their products. Hiring excellent employees and maintaining a customer-focused approach can also help companies succeed in an increasingly competitive world. Open dialogue with the customer base and consistent measurement of their satisfaction is essential for all businesses. 

4. Recruiting and Retaining Top Talent

Even when unemployment is high, attracting and retaining quality workers is a very real challenge for most businesses. Industry experts in fields as diverse as manufacturing and programming have bemoaned the mismatch between needed skills and available workers.

CEOs have responded to this discrepancy in a number of different ways. Some companies have partnered with community colleges and vocational schools to train the next generation of workers. Others have adopted a policy of continuing education and promoting from within to encourage top talent to stay with the firm long term. No matter what the industry, attracting self-motivated workers and creating compensation packages to ensure they stay continue to be a huge challenge for CEOs.

5. Globalization

The trend toward globalization presents both challenges and opportunities for modern CEOs. The availability of a global workforce can keep costs down and improve flexibility for manufacturers, computer companies and customer service firms. At the same time, globalization can be a real challenge for companies who make their product in high-wage countries.

Modern CEOs must respond to the current trends in globalization, but they must also have the foresight to spot changes and issues globally. Many formerly low-wage countries have seen the cost of manufacturing rise, while legislative changes and tax breaks have made onshore production more attractive.

6. Staying Ahead of the Curve

No matter how high profile the company, the competition is always looking for a way to take market share. Industry leaders are often at higher risk, since every other company in the niche has them in their sights.

These days CEOs must constantly stay one step ahead of the competition. They must keep one eye on the rear-view mirror and watch for lesser competitors. At the same time, they must keep an eye on the future and stay ahead of the curve. Getting to the top of the industry is a huge challenge, but staying there can be even more difficult.

From the smallest startup to the largest multinational, being a CEO is not an easy task. Top executives have huge responsibilities and face many challenges in the constantly changing business landscape. From the impact of global competition to the constant challenge of finding great workers, CEOs must wrestle with endless challenges to keep their companies on a growth trend that satisfies their shareholders and directors.  It takes a special blend of leadership and foresight to succeed in any industry with issues like these affecting the bottom line.  Kudos to the top CEOs moving upward and onward in spite of the curveballs trending markets may throw at them.

These are the views of Social Advisors, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Richard L Farrar is a registered representative of Lincoln Financial Advisors Corp. Securities offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SICP). Investment advisory services offered through Sagemark Consulting, a division of Lincoln Financial Advisors, a registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies.  CRN-1122388-021115

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