Key Trends for Business Leaders to Scale and Succeed
- Oct 18, 2022
As business leaders look to their 2023 goals and benchmarks, external economic pressures continue from all sides. This leaves many leaders feeling uneasy as banks tighten their credit standards, our supply chain remains fractured, commodity prices fluctuate and inflation continues upward. Along with continued equity market volatility, recruiting and retaining talented employees, regardless of your industry, also are major points of concern.
When we feel uncertain, the risk of rash or reckless decision-making only increases. As such, it’s more important than ever to understand these external influences, how they impact your unique operations, and how to effectively pivot to adapt in 2023. And as the calendar turns and we look toward the new year, I’ll cover some important themes business leaders need to know going into next year to increase cash flow, enhance profitability and be a difference-making influence in a positive way with employees.
I recently authored an article on a few questions business leaders can ask themselves to stay proactive during times of uncertainty. Because we can’t control external pressures, we need to double down on what we can control—how we both prepare and respond to them. In one situation with a family business client, they spoke about how they’re refocusing and targeting their efforts with one-hour weekly management meetings, with the goal of addressing some of the aforementioned challenges. Through these weekly mandatory meetings, they increased accountability and executable goals. Weekly meetings, when done thoughtfully, keep people sharp and focused. Who knowingly wants to be unprepared?
By creating a standard cadence, they were able to maintain extreme focus and ensure nothing went more than one week without being addressed. For example, when the cost to ship their product to specific regions domestically increased fivefold and overseas tenfold, they were able to proactively work together and make decisions about when to ship in real-time. By focusing on communication and creating a consistent open forum, they found success during times of uncertainty and challenge.
Get Ahead of Staffing Challenges
Whether it’s for a small family office or a large multi-national enterprise, retaining and recruiting employees continue to be issues for skilled and unskilled positions. For both aspects, one of the root causes can come from ever-increasing inconsistencies with communication and level setting for roles and expectations.
If you’re going to truly be proactive about addressing staffing issues, start by talking with your team members and stakeholders. You’ll never know or understand if there is a problem unless someone speaks up. Once you know about an existing issue, you can take measures to fix it. Otherwise, you’re left either guessing or not addressing the actual problem. There is no substitute for honesty and sincerity, and that is too often forgotten. We’re all smarter than we’re given credit for. If you don’t communicate, you’re risking people making up their own interpretation rather than providing a factual basis.
Leaders must also do a better job of understanding what it takes for their team members to succeed. If your employees are doing good work let them know. Thanking them, letting them know you appreciate the great effort, or even buying a nice dinner as a token of appreciation goes a long way.
Understanding Inflation’s Impact on Your Business
You’ve likely heard hundreds of different perspectives or opinions on rising inflation. This can leave many lost when looking for a trusted source for accurate information on both a macro scale and where inflation impacts their own operations. Utilize your resources to find an excellent factual source. Be careful, because too many pundits, especially those on social media, offer varying opinions without knowledge.
When it comes to preparing for inflation and how it may impact your organization, be cautious, be prudent and approach things with the right amount of skepticism. Take time to digest the information before making a decision. People tend to want instant answers. But how many decisions are really that time sensitive? Consider the impact of your decisions on others. Keeping good people is challenging and being able to do so will have an immeasurable positive impact.
Handling Rising Interest Rates
Who would have ever thought 6% or 7% would be considered rising interest rates? While they may create some uncertainty for business leaders, don’t let them distract you from what matters most. It may be a cliché, but it is essentially about maintaining excellent fundamentals, generating profits, servicing customers, communicating with strategic partners and stakeholders, and so forth. If a 2% or 3% interest rate increase makes that much of a difference, there likely were issues with operations long before the increase in interest rates.
Considering the Impact on Customers, Products and Suppliers
While rising interest rates may impact your operations, consider the positive and negative implications for your customers, products and suppliers. It gets back to focus: rationalizing costs, eliminating unprofitable clients and products, reducing inefficiencies and strengthening relationships. The 80/20 rule is alive and well. Focusing on those key numbers will impact your success.
Happy New Year
As we prepare for the new year, it’s easy to feel uncertain or overwhelmed by what is (or may be) ahead. As business leaders, take a step back, assess the external factors you’re facing, and best position your business for success in the new year.
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Robert D. Katz
Robert Katz CPA is a Managing Director of EisnerAmper Financial Advisory Services Group, and works with public and private companies, in and out of bankruptcy, to create and execute the strategy needed to restructure or improve operating performance.
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