Every new year means new challenges and new opportunities. This new year, 2023 is no different! When we asked 204 C-level executives for their 2023 predictions, their responses reflected five clear business trends:
- A surge in executive retirements and leadership departures
- Ongoing workplace changes
- Continued supply chain challenges
- Technology needs
- The looming threat of an economic downturn
Let’s take those one at a time.
A Surge in Executive Retirements and Leadership Departures
This is part demographics, part economics, and part pandemic stress.
After three years of economic and workplace stress driven by the pandemic, baby boomers who were already approaching retirement age are announcing plans to step down. In some cases, they are entrepreneurs and small business owners who will need to prep their company for sale. In others, they are business leaders who simply want to retire. In other scenarios, there are executives who will be pushed out by board members who believe the company has not adequately met the challenges of the last year or two.
In each of those situations, an interim executive can be the key to the company’s success. For small business owners looking to sell, an interim with deep expertise in prepping and selling companies can result in a successful sale. For companies looking to replace retiring or underperforming executives, an interim executive skilled at change management can keep the organization on track during the transition, help guide the search for a permanent leader, and even stay on to mentor the new hire.
Ongoing Workplace Changes
Remote work, the Great Resignation, the demands of millennial and Gen Z employees, and the need to hire the right people will not change in the coming year.
Staff shortages and lack of qualified talent were common refrains in our survey. Many leaders will struggle to adapt to the new world order where lines between home and office continue to blur and decision-making gets pushed to lower levels. The conflict between employee demands for hybrid work and management’s desire for a back-to-office trend will continue.
Remote work, which poses its own set of challenges for workplace management, should be seen as an opportunity, according to the executives we polled. Why? Because it widens the talent pool beyond geographic restrictions — including the pool of C-suite talent.
Hiring interim, part-time, fractional, or project-based leaders is another way to manage during times of workplace uncertainty. It allows companies to sidestep the risk, cost, and commitment of hiring a permanent executive amid an uncertain economic future.
Supply Chain Challenges
The supply chain challenges that arose during the worldwide Covid-related shutdowns are not going away post-pandemic. Even as the Federal Reserve raises interest rates to fight inflation, market demands continue to exceed available inventory, the executives say.
The supply chain issues are particularly acute in the technology sector; companies that depend on batteries, computer chips, and other electronics sourced outside of the US will continue to struggle in 2023.
Interim and fractional executives steeped in supply chain knowledge will be in demand as companies move toward onshoring supply chains and consolidation in the US.
Cybersecurity threats, increasing reliance on artificial intelligence to do everything from improving customer experience to overseeing factory automation, even the rise of crypto currency, blockchain technology and the augmented reality of the metaverse, all will drive innovation in 2023.
Next generation data analytics will make it easier (and more affordable) to get predictive results, but the right leadership will be needed to drive transformation.
“A mature digital strategy is no longer optional,” said one executive. “Success in building AI and machine learning applications will determine which companies lead in their industries.”
Successful implementation of new technology initiatives to do everything from streamline production to reach new customers via e-commerce will be the foundation of industry disruption and organizational sustainability.
An interim executive steeped in cutting-edge tech expertise will be in demand to work on a project basis to oversee the new technology implementation.
The Looming Threat of an Economic Downturn
While the threat of a deep recession next year has declined slightly with January’s announcement from the US Department of Labor that inflation for the previous 12 months had slightly moderated to an annualized 6.5 percent, executives say they still expect a recession in 2023. That will lead to deteriorating performance, budget cuts, financial hardships, and even crisis for a wide range of organizations, from new business startups to Forbes 500 corporations.
Many survey respondents predict that costs and interest rates will continue to rise, impacting cash flow and creating a volatile environment that will require a different type of business model and a different type of leadership. The situation could be complicated further by uncertainties due to Putin’s ongoing war in Ukraine.
Highly leveraged businesses will face increasing pressure. PE owners will look to replace weak management teams. That will lead to an increase in demand for turnaround specialists and Chief Restructuring Officer (CRO) assignments. Those experienced leaders will be tapped to help navigate through choppy waters.
One executive pointed out that many C-suite teams do not have the skillset to deal with tough economic times. “In other words, it’s easier to run companies when the economy is strong.”