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Copyright 2023 The views expressed in the articles within CEO Today are the contributors’ own. Images used in this edition have been done so under the creative commons licenses. EDITORS NOTE Welcome to the September issue of CEO Today, where we’ve curated a collection of articles designed to help executives navigate the increasingly complex world of business leadership. As the world grapples with unprecedented challenges, we aim to provide you with the insight, information, and inspiration you need to make informed decisions for your organisation. The Monster That is Inflation Inflation is currently front and centre in economic discourse, causing palpable anxiety among investors, consumers, and businesses alike. In our cover feature, we delve into the intricacies of inflation—what’s driving its surge, its direct impact on businesses, and strategies that CEOs can adopt to mitigate its adverse effects. Whether you’re looking to understand the underlying causes of inflation or seeking tactical advice, our feature offers a comprehensive view. Mark Palmer Editor Best wishes,
As of Oc t obe r 2022 , there are 5.5 million p r i va t e s e c t o r businesses ( down 1.5% or 82 , 000 from the p r ev i ou s ye a r ) .
20 | CEO Insight
How CEOs Can Do Their Bit to Drive Down High Inflation? Inflation is a persistent concern for economies around the world. Rising costs and decreasing purchasing power can have detrimental effects on businesses and individuals alike. CEOs play a crucial role in managing and mitigating the impact of high inflation on their companies and the broader economy. By understanding the current inflation crisis and taking practical steps to combat it, CEOs can contribute to creating a more stable economic environment and driving down high inflation. Understanding the Current Inflation Crisis Before delving into the role of CEOs in tackling inflation, it is essential to understand the causes of high inflation and its impact on businesses. Inflation occurs when the general level of prices for goods and services rises over time. This increase in prices erodes the purchasing power of consumers and reduces the profitability of businesses. Inflation can be caused by various factors, including excessive government spending, supply chain disruptions, and changes in consumer demand. The Causes of High Inflation One of the primary causes of high inflation is excessive government spending. When governments spend beyond their means, they often resort CEO Insight | 21
to printing more money, which leads to increased money supply and ultimately drives up prices. This can create a vicious cycle, as higher prices necessitate even more government spending, exacerbating the inflation problem. Another significant factor contributing to high inflation is supply chain disruptions. Natural disasters, such as hurricanes or earthquakes, can devastate production facilities and disrupt transportation networks, leading to shortages of essential goods and services. These shortages drive up prices as demand outstrips supply, further fuelling inflationary pressures. Trade restrictions and geopolitical tensions can also disrupt supply chains, causing price increases. The stubborn inflation we are seeing right now is due to increased energy costs, increased wheat costs which stem from the conflict in Ukraine. We also see post-pandemic price hikes, as businesses attempt to claw back lost revenues. When countries impose tariffs or quotas on imported goods, it can lead to reduced availability and higher prices for consumers. Additionally, political conflicts or trade wars can disrupt global trade flows, affecting the availability and cost of goods, and ultimately contributing to inflation. Changes in consumer demand can also contribute to inflation. During periods of high demand, businesses may raise prices to maximize their profits. For example, during the holiday season, retailers often increase prices due to increased consumer spending. Similarly, when there is a surge in demand for certain products, such as electronics during the release of a new smartphone, manufacturers may raise prices to capitalize on the heightened demand. The Impact of Inflation on Businesses High inflation has significant implications for businesses. Rising costs of raw materials and other inputs can squeeze profit margins, making it challenging to maintain competitiveness. For example, if the cost of oil, a key input for many industries, increases significantly, it can lead to higher production costs and reduced profitability for businesses across various sectors. Inflation also erodes consumer purchasing power, reducing demand for goods and services. When prices rise, consumers may cut back on discretionary spending, focusing only on essential purchases. This decrease in demand can lead to decreased sales for businesses, potentially resulting in financial strain and the need for cost-cutting measures, including layoffs. High inflation can also undermine business confidence and deter investment. When inflation is high and unpredictable, companies may hesitate to make long-term commitments, such as expanding operations or investing in new technologies. The uncertainty surrounding future prices and costs makes it difficult for businesses to plan for the future, leading to a slowdown
in investment and economic growth. In conclusion, high inflation is a complex issue with multifaceted causes and far-reaching consequences for businesses. Understanding the factors driving inflation and its impact on various sectors of the economy is crucial for CEOs and business leaders in formulating effective strategies to navigate these challenging economic conditions. The Role of CEOs in Tackling Inflation CEOs have the power to make a difference in addressing high inflation and its adverse effects on businesses. By making informed corporate decisions and employing strategic business strategies, CEOs can contribute to stabilizing the economy and driving down inflation rates. The Power of Corporate Decision Making CEOs have the authority to make decisions that impact their organizations and the broader economic landscape. By implementing cost management and efficiency measures, CEOs can mitigate the negative impact of inflation on their businesses. This may involve streamlining operations, optimizing supply chain processes, and identifying areas for cost-saving opportunities. For example, when faced with high inflation, CEOs can analyse their company’s expenditure patterns and identify areas where costs can be reduced. They can negotiate better deals with suppliers, explore alternative sourcing options, or implement energy-saving initiatives to cut down on expenses. These proactive measures not only help the company navigate the challenges of inflation but also contribute to the overall stability of the economy. In addition to cost management, CEOs can also focus on innovation as a means to combat inflation. By investing in research and development, companies can create new products or improve existing ones, leading to increased productivity and reduced costs. This, in turn, can contribute to lower prices for consumers, helping to alleviate the burden of inflation. How Business Strategies Influence the Economy CEOs can also play a vital role in influencing the economy through their business strategies. By investing in innovation and technology, companies can increase productivity, reduce costs, and ultimately contribute to lower prices. Furthermore, CEOs can advocate for sound economic policies that promote stability and growth, fostering an environment conducive to addressing high inflation. When CEOs prioritize innovation, they encourage their organizations to stay ahead of the curve and adapt to changing market conditions. This not only strengthens their own businesses but also has a positive ripple effect on the economy as a whole. By embracing new technologies and processes, companies can enhance their competitiveness, driving down prices and creating a more efficient marketplace.
Moreover, CEOs can actively engage with policymakers and government officials to advocate for economic policies that address inflation. They can provide insights and expertise based on their experience in running businesses, highlighting the importance of stable prices and the detrimental effects of high inflation on both companies and consumers. By collaborating with other industry leaders and policymakers, CEOs can contribute to the development of effective strategies to tackle inflation and create a more sustainable economic environment. In conclusion, CEOs have a significant role to play in tackling inflation. Through their corporate decisionmaking power and strategic business strategies, they can help mitigate the negative impact of inflation on businesses. By implementing cost management measures, investing in innovation, and advocating for sound economic policies, CEOs can contribute to stabilizing the economy and driving down inflation rates. Their actions not only benefit their own organizations but also have a broader positive impact on the overall economic landscape. Practical Steps CEOs Can Take to Combat Inflation As CEOs navigate the complex landscape of an inflationary environment, it is crucial for them to not only understand their role but also take practical steps to combat inflation and mitigate its impact. These steps involve proactive measures that focus on cost management, investment in innovation, and advocating for sound economic policies. Let’s dive deeper into each of these strategies: Cost Management and Efficiency CEOs can implement various cost management measures to ensure their businesses are operating efficiently in the face of inflation. This may involve analysing expenses with a fine-tooth comb, scrutinizing every line item, and identifying areas where cost reduction is possible without compromising quality. Negotiating supplier contracts is another effective way to combat inflation, as it allows CEOs to secure better pricing terms and minimize the impact of price increases on their bottom line. Additionally, forward-thinking CEOs can explore alternative sourcing options, both domestically and internationally, to diversify their supply chain and mitigate the risks associated with rising prices. Furthermore, CEOs can prioritize efficiency gains by embracing process automation and technology. By streamlining operations and reducing manual labour, companies can drive down production costs and improve overall efficiency. This not only helps combat inflation but also positions the business for long-term success by creating a lean and agile organization. Investment in Innovation and Technology Inflationary pressures often lead to higher costs for inputs, making it crucial for CEOs to invest in innovation and technology. By doing so, businesses can become more resilient and better equipped to navigate the challenges posed by inflation. Investing in research and development allows companies to develop new products and services that are less susceptible to price fluctuations. Moreover, adopting advanced technologies and optimizing processes can significantly increase productivity, which in turn reduces the reliance on costly inputs. This can result in lower production costs and ultimately lead to more competitive pricing, even in the face of inflation. Furthermore, CEOs can foster a culture of innovation within their organizations by encouraging employees to think outside the box and pursue creative solutions. This not only helps combat inflation but also drives continuous improvement and positions the business as a leader in its industry. Advocacy for Sound Economic Policies CEOs possess significant influence and can leverage it to advocate for sound economic policies that support stable price levels. By engaging in public discourse and working collaboratively with policymakers, CEOs can contribute to the development of policies that address the root causes of high inflation. This includes advocating for responsible fiscal management, which ensures that government spending is sustainable and does not exacerbate inflationary pressures. CEOs can also support policies that promote investment and economic growth, as a robust economy can help counterbalance the effects of inflation.
Additionally, CEOs can actively participate in industry associations and business networks to amplify their voices and collectively advocate for policies that benefit the broader business community. By collaborating with other stakeholders, CEOs can drive meaningful change and create an environment conducive to stable prices and sustainable economic growth. In conclusion, combating inflation requires CEOs to be proactive and strategic in their approach. By implementing cost management measures, investing in innovation and technology, and advocating for sound economic policies, CEOs can navigate the challenges of inflation and position their businesses for long-term success. Case Studies of Successful Inflation Management Examining past economic crises and current CEOs making a difference can provide valuable insights into successful inflation management strategies. Learning from historical experiences and showcasing real-life examples can inspire CEOs to take action and adopt effective approaches to combat high inflation. Lessons from Past Economic Crises By studying previous economic crises, CEOs can gain valuable insights into the strategies that have successfully mitigated high inflation. Whether it be implementing tight monetary policies, promoting export-led growth, or pursuing structural reforms, these past experiences can inform CEOs in their decision-making process. Current CEOs Making a Difference Highlighting successful CEOs who have successfully managed high inflation can inspire others to take similar approaches. By showcasing the positive outcomes achieved by these leaders, CEOs can learn from their successes and apply similar strategies within their own organizations. The Long-Term Benefits of Starving the Inflation Monster By taking proactive measures to address high inflation, CEOs can contribute to creating a more stable economic environment with a host of long-term benefits. A More Stable Economic Environment Tackling inflation helps create a more stable economic environment by reducing uncertainty and protecting the purchasing power of consumers. This stability encourages business investment, increases consumer confidence, and fosters sustainable economic growth. Increased Business Confidence and Growth Lower inflation rates instil greater confidence in businesses to make long-term investment decisions. With reduced inflationary pressures, companies can confidently plan for the future, expand their operations, and create more employment opportunities. This, in turn, leads to increased economic activity and overall growth. The Social Impact of Lower Inflation Lower inflation has positive social impacts, as it helps protect the living standards of individuals and promotes social cohesion. When prices remain stable, individuals can afford essential goods and services, leading to increased societal well-being. Additionally, lower inflation rates reduce the burden on vulnerable populations, such as low-income earners and retirees, as their purchasing power remains relatively intact. Conclusion In conclusion, CEOs have a vital role in starvation the inflation monster. By understanding the causes and impact of high inflation, CEOs can take practical steps to combat it. Through cost management, investment in innovation, and advocacy for sound economic policies, CEOs can contribute to creating a more stable economic environment and driving down high inflation rates. The benefits of these efforts are far-reaching, resulting in increased business confidence, sustainable growth, and improved societal well-being.
Bob Iger is one of the most influential and successful CEOs in the entertainment industry. His journey to the top of Disney is nothing short of remarkable. This article delves into the various aspects of his life and career, shedding light on the factors that contributed to his rise and the impact of his leadership on Disney’s success. From his early life and education to his innovative strategies and management style, we explore what makes Bob Iger the extraordinary CEO he is today. “Leaders must plan not for perfection but for change and volatility.”
By Monte Maritz, Partner at Oliver Wight, and Gavin Fallon, General Manager – Northern Europe at Board Business leaders must prioritise creating a proactive, dynamic organisational culture capable of quick response and adaptation over a ‘perfect’ plan. Hands up: which business leader can honestly say they have returned to work after the summer break feeling refreshed, inspired, and optimistic about the next year and beyond? Or has the time away fuelled the flames of worry for leaders feeling the heat in an uncertain, evolving business landscape? Undoubtedly, there are multiple challenges to consider for those at the helm of organisations. Last year, the world lurched from one crisis to the next, with the coronavirus pandemic quickly followed by the Russian invasion of Ukraine. This war further damaged supply chains and triggered an energy crisis and surging inflation across the continent. Little wonder Adam Tooze, an economic historian at Columbia University, popularised the term “polycrisis” in 2022. TRUST THE PROCESS Business leaders require courage to implement Integrated Business Planning – it’ll be worth it in the long term
This January, the World Economic Forum’s Global Risks Report 2023 explained: “Present and future risks can also interact with each other to form a ‘polycrisis’ – a cluster of related global risks with compounding effects, such that the overall impact exceeds the sum of each part.” In addition to dealing with a polycrisis, the dark clouds of a potential global financial crash are looming – so it’s understandable that anxiety levels are rising. But perhaps a calmer mindset is required to lead in a world where change is the only constant. Indeed, as historian Niall Ferguson said of the concept of a polycrisis: “It’s just history happening.” Leaders must break free from the traditional, outdated ways of leading, where personality, rigidity and instinct are too heavily relied upon. Today’s best leaders have a clear-eyed view and – most importantly – the courage to trust in people, process, and technology to revamp operating processes and make smarter decisions for a better tomorrow. They must plan not for perfection but for change and volatility. The good news is that the solutions are there for those brave enough to do the right thing. Proactive and adaptive longterm planning In this milieu of uncertainties, the secret to surviving and thriving lies in bold, courageous leadership underpinned by a strategic vision that embraces innovation and technology. The way forward is Integrated Business Planning (IBP), a common-sense process led by leadership and designed for effective decision making. When implemented correctly IBP becomes the backbone of a robust and agile business strategy. We see and hear the need for constant planning from the CEO community. There is a thirst for data, but leaders often don’t have the correct information at the right time without a robust, panoptic system. Over-thinking or attempting to achieve a perfect plan is a common mistake, especially when external factors smudge long-term visibility. The “financialisation” of business strategies – worrying about maintaining stability in the current financial year, let alone setting long-term goals – tends to lead to disconnections and, ironically, increases costs while sinking reputations. Leaders must prioritise creating a dynamic organisational environment capable of quick response and adaptation over designing for perfect reporting. In a world where economic shifts and technological innovations happen at an unprecedented pace, leaders need to foster a proactive, not reactive organisational culture. This requires developing a planning environment capable of adapting to a shifting landscape. The real challenge is to turn these potential pitfalls into stepping stones to the company’s ultimate goal. Successful implementation of IBP necessitates the right blend of people, process, and technology. Organisations must avoid falling into the trap of “digital debt”, which results from a reliance on outdated technology and processes. Clare Barclay, Microsoft UK’s CEO, expanded this theme when she took to the stage at London Tech Week in June. She argued that to take advantage of new technologies, such as generative artificial intelligence, and – more critically – build a culture of innovation that allows an organisation to remain relevant, leaders must be careful not to be bogged down in non-essential tasks. Avoiding digital debt Barclay cited Will AI Fix Work?, a report published in May by Microsoft, and noted almost two-thirds (64%) of all workers “don’t have enough time or energy to do their jobs. They’re challenged and overwhelmed with the pace of work, burnout, and a lack of productivity. I don’t know if anyone feels like that sometimes? I know I do.” She added: “Put simply, the pace of work is outpacing our ability to keep up. We call this deluge of information ‘digital debt’, sapping energy, slowing down the ability to think clearly, and severely impacting thinking for innovation.” IBP can revolutionise and simplify decision-making across the organisation from the top down. Yet imple-
menting such a system necessitates top-level sponsorship, which requires a leap of faith from the CEO and the rest of the C-suite. Trusting the process, and accessing insights uncovered by quality data from numerous internal and external sources, might initially be uncomfortable for leaders still stuck in the 20th century. No longer can they make choices using their gut instinct or be swayed by influential colleagues. These elements still matter, of course, but the information surfaced by the system is grounded in truth. Moreover, IBP empowers leaders to make informed decisions, and the process frees everyone in the organisation to focus on efficiency rather than chasing the elusive – and never attainable – perfect plan. No time is wasted on working on strategies that are doomed to fail. Gavin Fallon, General Manager Northern Europe at Board, adds to this: “Truly integrated Business Planning means you leave less profit on the table and have less inventory write-off.” Embracing IBP will mean leaders accepting that it’s more beneficial to understand and address the gap between reality and ambition rather than seeking affirmation of their personal aspirations. Leaders should recognise that looking forward and planning for the future is more critical than dwelling on past performance. Additionally, business leaders must understand that their budget is only as old as the day it was created. Modern leadership style Implementing IBP brings about a paradigm shift in leadership styles, moving from the traditional command-and-control model to a more empowering, trust-based model better suited to the 21st century. Further, the best way to handle a polycrisis and plan for the future is not to increase complexity but the opposite: keep it simple. By aligning people, process, and technology, this simplicity is possible. It is ironic that in many major organisations, multiple technologies are present, but the information presented, discussed, and used for decision making in the C-suite remains mainly manually prepared, or financially focused. Why are businesses not able to build this bridge? This is still mainly related to the behaviours of leaders and the support they need for the validation of their own expectations. If we expect our technology to present perfect views of the future, we not only ask for the impossible but introduce complexity that is almost impossible to maintain. Organisations must move away from leadership behaviours that need to understand the detail to trust it, and instead look to properly equip people with processes and efficient technology to inform the organisation where to look and what to do. As Monte Maritz, Partner at Oliver Wight explains, it is about designing for an uncertain future: “There is an enormous gap between strategic visioning and business delivery – across process and tools – because businesses are not prepared to adapt their ways of working for a changing world. A world where plans can change, and leaders provide guidance and empowerment as opposed to targets and ultimatums. The solutions are out there, but the right questions must be asked.” Those bold enough to rip up their existing operating model in favour of an integrated model based on efficient, future focused information flow will equip their organisations with the necessary tools to navigate the uncertainty of the future and unlock growth potential in an era marked by constant change and digital transformation. It’s not just about staying afloat in the present but also about setting sail for a more prosperous future. An integrated modern business requires a vision of empowered execution, trusted escalation, and formal enablement. Are you courageous enough to leap? Find out more “It’s not just about staying afloat in the present but also about setting sail for a more prosperous future.”
By Atif Sheikh 3 STEPS THE NEXT NATWEST CEO SHOULD TAKE 3 STEPS THE NEXT NATWEST CEO SHOULD TAKE – AND THE LESSONS ALL LEADERS SHOULD HEED – AND THE LESSONS ALL LEADERS SHOULD HEED
Oh dear. What a tidal wave of muddleheaded and histrionic reporting the NatWest debacle has unleashed. Let’s try and create some much-needed clarity about what has really happened here - and where NatWest goes next as a result. Oh dear. Atif Sheikh is the founder of purpose, strategy and culture consultancy businessfourzero and co-author of new book Every Team Actually Doing Business Better.
To be clear about my position on this: businesses should not be evaluating customers’ political views as part of risk-assessing them. When it comes to criminal intent or activity, yes absolutely - these are a real commercial risk that have to be managed and addressed. And sometimes political views at both ends of the political spectrum can turn into a criminal issue. But that is not what was happening with Nigel Farage. The bottom line is that no CEO, especially one with access to the privileged data set a banking CEO has, should ever discuss any aspect of any specific customer with anyone outside the bank. Building a business that endeavours to have a positive social impact through its main line of business is not just desirable but it is imperative as we try to build stronger, healthier and more productive societies in the face of the multiple challenges we face. As is building a healthy, productive, and inclusive culture inside the business - one where every talent of every employee is harnessed to make the business more successful. However, those two things are in no way the same as publicly crusading on matters outside of your core line of business and the ways in which it impacts society at large. Finally, and most importantly, inclusivity really is worth nothing if we don’t include those who have views that we disagree with. As Abraham Lincoln once said ‘I don’t like that man. I must get to know him better’. Maybe Nigel Farage was debanked purely for falling below a net wealth threshold, maybe it was for his political views, or maybe it was for both. Only the first of those scenarios would have been ok. But the public relations disaster created around the whole issue means we will likely never know for certain what really went on. Did Alison Rose make a serious error of judgment? Yes. Has this issue been made infinitely worse by a need from the public and "INCLUSIVIT WORTH NOTHIN INCLUDE THOS VIEWS THAT W WIT
government to play politics with it? Also yes. And in the process NatWest have lost a Chief Executive that, in her nearly 4 years in role, was universally acknowledged as running a business that was both transforming and performing. The Financial Times gave the next CEO of NatWest only a 25% chance of success. So where does that new leader take the business now? Well. Step 1 – take the business out of its current part-public ownership, where it will be somewhat better insulated from our current political landscape. No doubt that is going to be trickier given the drubbing the share price has taken over this incident. Which takes us to step 2 – refocus the business around a purpose and strategy that drive both commercial performance and social impact (in the spaces where its business model can make the biggest difference to our society). Whilst I believe in diversity - and know it is key to a high performing corporate culture - I suspect that is not where a bank should focus in its social mission. Given the cost-of-living challenges that people face up and down the United Kingdom I suspect that focus is more likely around using its skills and balance sheet to help more customers make their money go further. So, what’s step 3? Ensure every team in the business understands that our job is to deliver on that purpose for every single customer - with empathy, understanding and passion. Whatever their political views. As long as, and this is important, they aren’t criminal in intent or action. The only real lesson from this whole muddled affair that I can see is that every business and every leader needs to keep themselves honest around the blurry line between doing business better - and building the kind of society they personally would like to see. TY REALLY IS NG IF WE DON’T SE WHO HAVE WE DISAGREE TH."
“Senior business leaders hold the key to unlocking the PMO’s potential.”
By Gero Renker, Program Framework WHY SHOULD THE C-SUITE CARE ABOUT THE PMO? In the ever-evolving landscape of business, the Project Management Office (PMO) often finds itself in a paradoxical position – potentially a crucial component of organisational success, yet frequently undervalued. According to research conducted by Program Framework, around 50 per cent of PMOs feel they are not recognised for the value they deliver to an organisation. This indicates that senior leaders often see the PMO as an administrative entity and do not recognise the transformative potential it holds as the engine room of strategic initiatives. When the connection between the PMO’s work and the overall business strategy is unclear, senior leaders may struggle to see the direct impact of the PMO’s efforts on the bottom line. But there is much they can do to harness the potential of the PMO and empower it to drive the organisation’s strategic objectives.
In evermore turbulent economic times, organisations are facing an increasing need to transform in order to stay relevant and competitive. They need to be able to turn strategy into reality quickly, and adapt to a changing business landscape, all of which happens through projects. The PMO is therefore at the heart of strategic change, and its true value is its ability to drive strategic outcomes that senior executives demand. If the PMO is overly focused on enforcing standardised processes and templates, rather than driving tangible business outcomes and supporting strategic conversations, senior leaders might view it as a hindrance and not an enabler of success. Instead of measuring success solely on factors such as the timeliness of projects, scope, and budget, the PMO should showcase its impact through return on investment, efficiency gains, cost savings, risk reduction, and increased throughput. If the PMO is not consistently delivering projects that align with the organisation’s strategy and yield meaningful results, it is important for senior leaders to consider how to help the PMO make that change. To maximise its impact, the C-suite should help the PMO transition from being a project enabler to a strategic business partner. This metamorphosis involves the C-suite ensuring that the PMO is fully bought into the organisation’s strategy, that they are facilitating the discussion on the projects that will deliver this strategy and clearly communicating the expected outcomes. By establishing relationships, the PMO gains the influence needed to drive better decisions, informed by data-driven insights. In order to raise the PMO’s authority and credibility within the organisation, a member of the C-suite should act as the PMO’s sponsor, ensuring that they are included in conversations of strategic importance and helping the office to develop relationships with the wider leadership team. A critical step in enabling the PMO to reach its potential is equipping it with the right tools. Too often PMOs rely on disconnected content, spreadsheets, and PowerPoint decks. As a result, their resources are wasted on manually collecting data and creating reports, rather than adding strategic value. Investing in proper Project Portfolio Management (PPM) tools
will help to keep the PMO on track to delivering strategic contributions. A PPM tool can provide a platform to streamline the processing of project pipelines, with prioritisation based on strategic alignment. It collects data in an enterprise database to deliver automated reporting for data-driven decision-making. Only with data can a PMO create a realistic delivery roadmap, and a well-managed process for consistent throughput of projects that provide the right outcomes. Much of the PPM tool value is delivered through modern business intelligence technologies that senior leaders sometimes are reluctant to engage with. Yet learning to navigate a self-service dashboard rather than insisting on receiving a monthly PowerPoint report by email may open the door to much great insights on demand. Actively working with the PMO to define executive reporting requirements is key however – as otherwise too much, too little, or irrelevant data may be provided, and reports fail to benefit their audience. Senior business leaders hold the key to unlocking the PMO’s potential. By clearly articulating challenges and desired strategic outcomes, leaders can guide the PMO towards becoming a dynamic force that fuels the organisation’s success. The PMO’s transformation from an administrative function to a strategic driver is a journey that requires commitment, collaboration, and the right tools. In embracing this evolution, senior leaders pave the way for a future where the PMO becomes an indispensable catalyst for innovation, efficiency, and strategic achievement. Gero Renker, co-founder and director of portfolio, project and programme consultancy firm, Program Framework.
DECARBO Alessandra Del Centina , Vendigital. With so much importance currently placed on embedding ESG values and missions across organisations and promoting progress to net-zero goals, businesses leaders are reaching out for support in designing and implementing decarbonisation strategies. But these strategies are capable of delivering so much more than reducing their impact on the environment. Making it Part of an Organisation’s DNA
Key to optimising value from decarbonisation strategies is making it part of everything the business does – from the products it makes to the processes employed, as well as management practices and sourcing strategies. With so many factors to consider, how can business leaders ensure that a decarbonisation mindset is implicit in everything they do? Decarbonisation is gaining momentum as a buzzword across industries, but with growing regulatory pressure from government, it is something that businesses of all sizes should take seriously. The UK has committed to reaching net-zero by 2050, which will require a collective, cross-industry effort if it is to be achieved. With huge public backing, as well as interest from investors who are looking to value and acquire responsible businesses, there could be opportunities for businesses that start on a programme of decarbonisation ahead of their competitors. But where should they begin? The most important step is to gain a holistic understanding of the business’ carbon footprint, including its Scope 1, 2 and 3 emissions data. Scope 1 and 2 emissions are those that are directly owned or able to be controlled by the business, while Scope 3 emissions often fall out of the business’ direct control, making them more difficult to influence. Attempting to meet net-zero goals will be impossible without understanding this data, and a carbon assessment will be crucial to understanding the current lay of the land. A lifecycle carbon assessment of individual products and their production lines will highlight areas that the business should concentrate on. This exercise will help to prioritise resources and deliver a marked reduction in carbon emissions as quickly and costeffectively as possible. It will also help to flag longer term projects. However, with Scope 3 emissions often accounting for more than 70 per cent of a business’ carbon emissions, it is clear that reducing operational carbon will involve more than ‘in-house’ projects. While this could seem daunting to businesses setting out on their carbon reduction journey, the best advice is to start by doing what can be done. There are many methods available to reduce carbon emissions within a business’ operations, and industries that implement these sooner could win customer loyalty and secure an advantage over their competitors. For example, investing in renewable energy systems will make an enormous difference to the company’s overall carbon emissions, and a strategy of electrification will deliver both carbon and cost savings over time. Equally, implementing lean management principles will help to reduce energy consumption and minimise waste, bringing benefits for the environment while simultaneously shoring up the bottom line. Changing production processes by adopting more efficient technology, for example by working with AI to conduct machinery assessments and reduce unplanned downtime, will serve to optimise processes and improve operational efficiency, and a materials assessment will enable the business to adapt its sourcing strategies and make low-carbon switches. While there are some risks associated with any change project, such as the risk of operational downtime if new machinery fails or new supply lines are disrupted causing costs to increase, to do nothing is simply no longer viable. This is not only due “By gaining a detailed understanding of their organisation’s carbon footprint and placing decarbonisation strategies at the top of the corporate agenda, business leaders and boardroom decisionmakers will ensure they are ‘lived’ by every function of the business and employees at every level. “
to the regulatory changes that are coming down the line, but also the risk to their corporate reputation, as customers are increasingly choosing to buy from businesses that share their values – i.e., businesses that are more sustainable and actively taking responsibility for the health and wellbeing of the planet. However, business leaders should be aware that implementing new technology could bring challenges. For example, it could mean current assets quickly become obsolete, and there should be a strategy in place to ensure that these aren’t simply abandoned, thrown away or sent to landfill – undermining the purpose of the replacement. Equally, switching out a supplier or source could not only bring risks to the product and supply chain, but also the divested businesses and communities that may have relied on the income – for example, if the company is based in a lowcost country (LCC). These risks demonstrate the responsibility that a business has not only to its employees and customers as it pursues a decarbonisation strategy, but also the wider communities that are directly or indirectly linked to it. With new sustainable technologies and low-carbon materials coming to market all the time, business leaders need to stay abreast of what is available, so they can implement changes that will reduce their carbon footprint and deliver a competitive advantage. When building a business case for such investments, they should look beyond customer relationships and cost reduction opportunities. As many workers now seek out opportunities to work with employers that are socially and environmentally responsible, delivering against decarbonisation goals could also help businesses to attract and retain talented people. To ensure that decarbonisation strategies remain at the top of every business’ agenda, business leaders should ensure that decarbonisation related KPIs carry the same weight in terms of importance and scrutiny as financial KPIs. Performance against them should be included in all toplevel reporting, along with cash, profit margin, market share and other business critical information. However, it is equally important for business leaders to understand that they are not undertaking these challenges alone. There is a wealth of industry-specific experience and innovation to draw down and experiences are being shared more openly. As the regulatory push to decarbonise intensifies, it will become even more important that businesses share best practice and new ways of working with competitors, industry bodies and suppliers; collaborating to achieve a common goal. By gaining a detailed understanding of their organisation’s carbon footprint and placing decarbonisation strategies at the top of the corporate agenda, business leaders and boardroom decision-makers will ensure they are ‘lived’ by every function of the business and employees at every level. By sharing and collaborating on best-practice principles, and seeking external consultation where appropriate, businesses and sectors will quickly discover that they are much stronger together; making net-zero attainable for all. Alessandra Del Centina, managing consultant at management consultancy, Vendigital. “The most important step is to gain a holistic understanding of the business’ carbon footprint, including its Scope 1, 2 and 3 emissions data.”
By Sarah Towers , Entec Si. how can CEOs use Technology to encourage Productivity? PROPELLING PERFORMANCE
ONS data published in July revealed that labour productivity in the UK was 0.6 per cent lower in the first quarter of 2023 in comparison to the same period in 2022. Whilst productivity has been notably stunted since the global financial crisis in 2008, factors such as poor communication and an overload of administrative work continue to weaken outputs. Technological breakthroughs and generative artificial intelligence (AI) - a form of AI that generates media such as images or text - are offering a solution to this problem. With advancements in automation and the evolution of cloud computing already upgrading workflows, the introduction of new technology promises to revitalise workers by reducing manual tasks and unlocking opportunities for creativity and collaboration. However, such implementation is not a fast-track solution. For the best results, CEOs and senior leaders need to prioritise digital adoption, proactivity and cultural change to actualise higher productivity within the organisation and deliver change for good.
According to the G7 productive business index, the UK is lagging behind nearly all of the world’s largest developed economies because of failures to invest in and enhance technological adoption, innovation, management and leadership. Embracing technology does not equate to better productivity alone, and by far one of the greatest barriers to a good output is a workforce that does not understand how to use the systems at their fingertips. Whilst there is no question that technology is an enabler of productivity, historically most evident in the time saved using emails rather than paper letters to communicate, digital adoption is the real key to a more productive workforce. Inefficient workflows are another inhibitor of a positive yield. Often, this stems from workers being required to communicate with multiple partners, leaders and colleagues in order to complete tasks. This can sap productivity as much as siloed working and, as such, leaders should endeavour to challenge workflows that are slowing positive results. A recent survey of 31,000 people across 31 countries conducted by Microsoft found that nearly two thirds of employees reported not having enough energy or time to carry out their job. It follows that CEOs need to identify the employees with the most efficient workflows and encourage this style of working across the organisation. Change is necessary to sustain productivity in the long-term, and creating one evolved workflow, with a few tweaks to accommodate individual needs, will help to remove such barriers. Barriers to productivity
In a tech-centric world, the impulse to invest in new technology can be difficult to ignore. However, it is important for CEOs to make investment decisions based on what their organisation, and workforce, require to achieve the best results, via the most efficient means. One trend that is cropping up more frequently is the introduction of robotic systems to automate simple, but regular tasks. Doing so transfers the responsibility of time-consuming practices like drafting emails or assembling data, from person to machine, freeing up the workforce to add value elsewhere. Automated chat boxes are a good example of this, allowing users to exploit their intelligence without having to upload data first. Progress in low code platforms and collaborative tools means teams can now benefit from easier methods of communication and data sharing, in one location. Application software is therefore a sound investment for any organisation because it dramatically cuts down the time workers would ordinarily spend using spreadsheets or speaking to colleagues individually, for instance. Huge amounts of innovation on the Internet of Things – a network of physical assets that collect, share and process data over the internet - has equally opened up opportunities for improved productivity. Real time data collected by smart sensors can provide insights into anything from the efficiency of manufacturing machinery to supply chain deliveries. Mist computing – a network of microchips or microprocessors that feed small amounts of data to a central system – and fog computing – digital infrastructure such as smart buildings that can collect and process data without a central system – are at the heart of this innovation. Such advancements spare workers the toil of managing data themselves, speeding up operations and redirecting efforts to optimise other areas of the business. The technological Opportunity “With advancements in automation and the evolution of cloud computing already upgrading workflows, the introduction of new technology promises to revitalise workers by reducing manual tasks and unlocking opportunities for creativity and collaboration.”
To reap the business benefits of new technology, it is wise for CEOs to consider investing sooner rather than later. For organisations with a lower risk threshold, this might mean waiting for competitors to trial out new tools to avoid paying research and development (R&D) costs. When embarking on a digital change, it is best practice to adopt an iterative approach to investment. Before committing fully to delivering change, senior leaders should invest a fraction of the budget to test the new technology and build a small business case for it. Following this, businesses should invest a further five to 10 per cent of the budget in piloting and gathering insight through surveys. Making the decision to hold off on a digital transformation is still a valid choice if initial testing indicates that the technology won’t boost productivity or engender change for good. Above all else, senior leaders should focus on the benefits the technology will bring for their people and business. Cutting through the online frenzy surrounding AI is a key part of this; to be successful, digital changes should cater to the needs of an organisation’s people and stakeholders, placing them at the centre of the transformation. Investment Timing Your
To embed digital change effectively, every end user in the organisation needs to understand how to use the technology introduced and the benefits it will bring. No two situations are identical, and CEOs should be aware of any factors that are unique to their people or organisation which could impact adoption and the change journey. Training is a must but should be delivered via incremental, bite-sized modules where possible. This will not only encourage workers to engage with learning by reinforcing retention rates but provide consistent productivity if all users are able to successfully learn how to use the new technology at the same speed, and in the same way. Cramming training into a few, larger sessions only risks a smaller percentage of the workforce achieving adoption. In the context of digital transformations, changing the organisation is often the smarter choice rather than moulding the technology to suit the workforce. CEOs should aim to challenge how new technologies are being utilised and encourage workers to apply their training for best practice. Analysing engagement with the technology will help this effort but should not be used negatively against employees. Instead, CEOs should be sensitive and communicate directly with the workforce to establish any barriers to adoption, and how best to overcome them. Adoption The Power of
The introduction and adoption of new technology can help to boost productivity. However, for this to be achievable, CEOs need to ensure the correct due diligence is taken to support the new measures and embed strategic changes successfully. Cultivating an honest and open culture that listens to and looks after the organisation’s people is vital. Pressure from senior leadership to be productive has been shown to have a detrimental effect upon workers; one survey conducted by Slack found that 63 per cent of workers make an effort to keep their online status as active and more than half feel pressure to respond to messages quickly, even when they are sent outside of hours. For the most fruitful outcome, CEOs need to remain open-minded and ensure all opinions are listened to throughout the change. This includes challenging organisational hierarchies and putting the client, then workforce, first. Outlining the hard purpose of the organisation is an essential action as it will provide a stable foundation for employees to work from. In turn, this will help to encourage productivity by making the work more fulfilling and helping employees to understand the improvements new technologies will provide for their workflows, and the customer base as a result. Culture is Crucial