Changing Business Dynamics & Challenges For CEO’s in 2022

Baskar Sundaram
Baskar Sundaram

In the backdrop of two back to back years of sluggish growth and expansion, the business leaders will be under pressure to accelerate & sustain growth in the coming year. In addition, a hot talent market, shifting B2B buying dynamics and the potential for inflation all combine to create a challenging set of circumstances for Business leaders this year.

In 2022, those Business teams that have been able to balance investment in talent and new processes with their ability to successfully execute the core components of their roles will have a distinct advantage. In order to win, there are five imperatives for commercial success:

  1. Embrace Leadership as a Collaborative Discipline

The earlier part of this decade saw the emergence of consensus leadership, where leaders built their own credibility around the idea that no one person could have all the right answers. This approach worked well in an environment of relative stability, where lines of strategy were clear and there was limited need to respond quickly. As markets become more volatile and competitive landscapes become more complex, the role of corporate leadership changes to that of orchestrating team dynamics. 

  1. Find New Ways to Connect with Your Market 

The market is now interconnected by social platforms like Twitter, Instagram, and LinkedIn that offer new opportunities for marketers to engage with individual customers in real-time. Successful commercial leaders will use these platforms as a direct line of communication to their market, leveraging them to provide feedback on customer satisfaction and market sentiment.

  1. Embrace the B2B Consumerization Trend 

In order to remain innovative and competitive, organizations must find ways to bring the connected, adaptive mindset from consumer business into their commercial business. In doing so, they will be able to increase their agility and better understand and serve the evolving needs of their market. 

  1. Find the Key to Unlocking Digital Skills 

Digital literacy is moving from a luxury to an essential skill for sales professionals. Commercial leaders must find ways to upskill themselves around digital marketing techniques or acquire more modern sales and channel selling approaches.

  1. Harness AI and Machine Learning for Business Advantage 

AI and machine learning are becoming essential for superior performance in every sphere of the commercial function: from setting prices, to predicting which leads will close, and generating compelling content. Commercial leaders must stay on top of these emerging technologies in order to gain a competitive edge.

There will be more challenges that business leaders will face in 2022 like the creation of new jobs and economic growth, advances in technology (especially AI), legislation and compliance.

Challenges ahead for Business Leaders in 2022

The business leaders in 2022 will have a difficult goal to achieve, that is to win growth from competition and from the market itself. In this case, it is important for the large companies to think outside of their current product lines and diversify into other areas such as cross border trade. An example is Alibaba which allow small businesses an ecommerce platform to sell their goods abroad. Another approach that large companies can take is to buy a smaller firm in a related industry and utilize the established customer base and distribution channels of the acquired company to grow higher in less time compared to building from scratch.

In addition, leaders have to secure the future workforce through improved education systems so they will be ready for the future jobs. Leaders also have to update the current equipment in use for production to be able to keep up with changing demands of consumers which include issues like environmental pollution, waste management and consumer safety. All of these measures can help maintain economic growth in 2022.

The business leaders in 2022 will have a difficult goal to achieve, that is to win growth from competition and from the market itself. In this case, it is important for the large companies to think outside of their current product lines and diversify into other areas such as cross border trade. An example is Alibaba which allow small businesses an ecommerce platform to sell their goods abroad. Another approach that large companies can take is to buy a smaller firm in a related industry and utilize the established customer base and distribution channels of the acquired company to grow higher in less time compared to building from scratch.

In addition, leaders have to secure the future workforce through improved education systems so they will be ready for the future jobs. Leaders also have to update the current equipment in use for production to be able to keep up with changing demands of consumers which include issues like environmental pollution, waste management and consumer safety. All of these measures can help maintain economic growth in 2022.

The win/lose Conundrum

As a leader, it is important to know what makes you win or lose in order to achieve your goals. It can be a lack of resources such as money, workforce, materials and leadership that will cause one to lose before the competition. There is also the possibility that leaders might not see new opportunities and be blindsided by competitors who did establish their presence in that market.

A lack of innovation will also cause one to lose, making the company out-of-date in their methods and technologies used in production which can make them lose customers. Lastly, internal problems among divisions within the corporation might hinder progress in different areas leading to loss of potential customers or failing to take advantage of opportunities.

Bringing your vision to life

Every leader has a mission statement or a vision that they want to achieve with their business. The first step is to break down the vision into short-term goals and measurable objectives. It is important to prioritize what needs to be done in order to meet the main goal, while leaving room for new opportunities. Leaders also need to make sure that they are aware of problems or roadblocks that might interfere with achieving their goals.

The next step is to mobilize and motivate employees through incentives and motivation. It is important to maintain transparency within the company so that everyone knows what is going on and what they can do to help achieve the main goal. Leaders also need to encourage creativity, innovation and risk-taking as part of giving their employees a sense of ownership over the work they engage in.

The importance of communication

Communication is important within any organization. Leaders will need to communicate things like the vision, objectives and goals of the company so that all employees are aware of what they are doing and why it matters. It will also allow them to see how their work contributes towards achieving the main mission statement.

Communication is also important to coordinate and engage employees in doing their work. Employees need to know what they are responsible for and how it contributes towards achieving objectives and goals. Leaders should encourage communications among different divisions and especially across hierarchical levels so that they can easily reach out to each other with ease and understanding of what is going on.

Business beyond boundaries

It is predicted that businesses will increasingly need to learn how to work across cultures, which requires a deeper understanding of cultural dynamics. Leaders will also need to be aware of the increasing number in global consumers and how they differ from national consumers in their attitudes, values and behaviours. This can help with developing marketing strategy for each market in order to provide products and services that target the specific consumer groups.

Leaders will also need to take advantage of digital resources such as social media monitoring, online reviews and mobile applications which can help them get a better understanding of their customer’s needs and preferences. Technology will continue to be an important factor in how businesses operate and leaders need to align themselves with emerging technologies in order to stay relevant in their industry.

 

Risks ahead for Business Leaders in 2022 

Despite great conditions for growth — a strong macroeconomic environment, big bets with aligned commercial capacity, and increased investment in digital marketing and selling — it has been found that even high-growth CEOs express uncertainty around their teams’ ability to execute their growth plans.

A research in this regard identified four key risks and aligned recommendations that all growth leaders should consider as they finalize their plans and shift toward execution.

Risk 1: Unrealistic assumptions around talent

Both CEOs and staffing firms share that despite planned headcount additions, they are struggling to fill open roles, with the number of posted sales roles growing by 65% since early 2021. Further complicating sales leaders’ efforts to hit quota, on average, surveyed leaders are operating with around 31% of sales capacity that’s either open headcount or in year 1 on the job, indicating partial capacity at best. With growth hires representing critical enablers of many organizations’ plans, hiring teams will likely fail to keep up with 2022 headcount needs. A relatively conservative analysis shows that between open headcount, first-year reps operating at about 50% capacity, attrition, and growth headcount, companies will face 51.5% of sales capacity that is at-risk in 2022.

Rather than racing to fill every opening with top-performing talent as quickly as possible, companies should be thinking about how to outsmart the war for talent — rather than winning it. Through conversations with high-performing CEOs, it has been found that there are two ways companies are fighting the war on talent. One involves doubling down on the hiring process and getting creative with candidate profiles. The other — covered in the subsequent section — centers on productivity, offloading as much market coverage to digital channels as possible and maximizing productivity of talent in seat with strong revenue enablement and operations capabilities.

The CEOs and other growth leaders share the following tactics to support recruitment challenges.

Diversifying hiring approach. Leaders identify the skills that they need rather than a specific number of years of industry or selling experience. Several CEOs share positive experiences sourcing candidates from other industries or professions and suggested prioritizing curiosity, empathy, willingness and ability to learn quickly, and deep customer understanding during the hiring process. An ed-tech leader shares a positive experience of hiring teachers as sales representatives — not only do they bring unparalleled ability to connect with customers, they have lower compensation requirements. Other companies shared that they have been able to promote high-performing staff internally, bringing a wealth of institutional and customer knowledge into sales roles.

Sell the company and the role. To improve the odds of attracting candidates in a competitive market, GTM leaders at several tech companies are approaching recruiting much like a sales process. They partner with HR to define an ICP (ideal candidate persona) and revamp their job descriptions to better articulate the company’s story, vision, and purpose.

Support rapid onboarding and success of new hires. With 94% of sales leaders planning to add headcount in at least one capability area in 2022, companies need to consider scalable onboarding programs that they can deliver through virtual channels. Many of the leaders represented in this research are rearchitecting new hire boot camps for hybrid workforce needs. One company we spoke with made an even bigger change: shifting new hire onboarding from frontline managers to star reps. By shifting these responsibilities, the company was able to accelerate new reps’ speed to productivity while simultaneously providing extra capacity to high performers and sales managers.

Risk 2: Disproportionate budget allocation to “feet on the street”

CEOs are increasing sales and marketing investment more than any other functional area in 2022, and most GTM leaders are funneling a significant portion of that investment to quota-carrying reps. However, where typical performers are on pace with winning companies when it comes to investment in people-heavy capabilities such as inside sales, field sellers, and key account reps, high-growth companies are much more likely to invest in areas that boost productivity and help teams work more efficiently: digital selling and enablement.

Digital selling and enablement investments can support greater productivity from both new and existing hires by shifting capacity to digital channels and delivering a superior buying experience from your customers’ point of view. Commercial leaders should audit their companies’ buying journeys and encourage their teams to double down in digital selling tactics to accelerate results in 2022:

Digital content and tools. Sales and marketing teams should partner together to evaluate how effectively content supports digital buying journeys and where additional assets might support buyer progress toward a purchase. For example, diagnostic tools and benchmarking data can motivate buyers relatively early on in their journeys, while the data these tools generate help tailor marketing engagement efforts and seller interactions.

Data-driven intelligence. Investments in data and analytics can help organize and focus seller time and energy, arming them with insights around which buyers to prioritize and why, what sales play/tactics to run, which digital experiences or content assets to highlight for sellers, and how buyers have engaged with the supplier to-date.

Clear and consistent buyer and seller experiences. Sales enablement leaders must help both buyers and sellers navigate the many disruptions in B2B purchasing. For buyers, their efforts should focus on aligning buying messages and tools across multi-channel purchase experiences, and for sellers, enablement must simplify rep experiences, offering fewer entry points to data and tools and aligning seller resources to their activities.

Risk 3: CX initiatives that are no more than lip service

Most commercial leaders agree that customer experience is important, and they have often documented a strategy or aligned on goals with their leadership teams. When it comes to execution, however, high-growth companies are nearly four times more likely than typical performers to have a significant CX initiative planned for 2022. And when exploring companies’ progress executing CX initiatives, average-growth companies generally haven’t moved off the starting block, whereas their peers have begun leveraging technology to improve their customer experience, impacting critical growth outcomes such as retention, and advancing customer success capabilities.

To ensure CX helps drive growth for your company in 2022, high-growth companies’ experience suggests several key actions:

Audit your commercial tech stack. While most tech companies have the foundations of a rev-tech stack in place — customer relationship management, marketing automation tools, and enablement tools, for starters — many leaders had less confidence speaking to critical CX enablers. To begin this journey, CEOs should ask their leaders for a full picture of the key capabilities currently in use, their overall adoption, and the value they generate. From there, align with commercial leaders on how technology can support critical experience gaps (e.g., points of dissatisfaction, poor value realization).

Attack the biggest friction points. Only 50% of high-growth companies believe it’s easy for customers to buy from them, and that number dips to 30% when looking at average performers. Yet a majority of all companies that were surveyed have evaluated their customer journey, giving them the insight they need to prioritize and advance initiatives targeting their customers’ points of greatest friction. As companies put improvement initiatives in place, they should consider how different capabilities might accelerate their efforts — specifically, journey orchestration and analytics tools to ease customer experiences and measure results.

Benchmark your customer success capability. For many companies, customer success remains an emerging capability. Across the course of one research, a number of questions around ideal reporting lines, org structure, compensation, and responsibility sets. Leading CEOs and CFOs share that they typically align success to a CRO in organizations where the product is mature to support cross-sell and upsell; where products are less mature, consider orienting success toward product value realization and COO reporting lines.

Risk 4: Too much agility

While the current macroeconomic environment presents growth leaders with a considerable opportunity, CEOs will benefit from showing commitment to the shortlist of growth initiatives that matter most to their annual plans. Indeed, lower-growth companies are more likely to take an agile approach to 2022 planning than their peers. Specifically, these companies express high willingness to shift resources quickly and build multiple contingencies into their plans — often ending up in reactive mode.

As markets show signs of greater demand, these organizations easily over-index, resulting in poor execution and throughput of their initial growth plan. Teams navigating constant re-prioritization, or the continual introduction of ‘more’ initiatives, fail to develop proficiency and abandon continuous improvement initiatives. “We have had a tendency to chase a lot of growth opportunities, but without discipline. Our teams saw growth opportunities, but they didn’t fit into our process for execution. We ultimately had to slow down to go faster,” one CEO shared.

Recommended Actions

CEOs and their commercial leaders are likely to face continued disruption as they look ahead to 2022, but expectations for growth and value creation won’t change. To accelerate growth in the year ahead, CEOs should align their growth leaders around a few key leverage points:

Pick your talent battle: talent acquisition vs productivity improvement. This may be an “and” and not an “either/or” scenario for many organizations. However, they go hand in hand. If plans and budgets account for more ‘feet on the street”, this will take time given current market conditions. Therefore, current teams must produce at best-practice levels — approximately two-thirds of reps should be at quota. If your organization isn’t meeting those targets, begin with productivity. Digital selling, sales enablement, and revenue operations all represent high-potential levers for boosting sales capacity. If additional resources are required, talent acquisition and increased goals may be the right path, with CFO and CEO review and prudent capital allocation.

Evaluate purchase ease as a key CX initiative for 2022. Together with commercial leaders, CEOs should “mystery shop” their buying experience across channels. Consider the consistency of the experience across digital and seller-owned channels, the quality of information provided, and the clarity of key differentiators. The findings for this type of investigation should point to clear actions and accountabilities for GTM leaders in the areas of digital content, technology enablers, and team feedback and coaching. Consider the following questions: How does your experience compare with those of your nearest competitors? What can you incorporate into your GTM model that would help you outpace the competition?

Pressure-test your growth initiatives. As drivers of their business’s growth program, CEOs should critically evaluate the growth initiatives — and number of them — planned for 2022. Commitment to this shortlist significantly impacts successful execution, suggesting CEOs must feel confident that they’ve pointed their teams in the right direction. Some starter questions: Which levers will you pull? Why? What uplift are you assuming? How difficult will it be? How soon can you expect an impact on growth? And finally, do the rewards outweigh the risks?

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