At a closed-group leadership roundtable I recently hosted, I heard firsthand from market-leading CEOs that their business decisions are no longer reliant on media or other external reports. Instead, they are making decisions based on the actions of industry peers and their own company's data.
A Pulse From CEOs
Most CEOs are approaching the first half of the year with a restrained but “business as usual” mindset. Their growth assumptions appear reliable, and they are holding the line on costs.
They have detailed contingencies in place, shifting as much to variables as possible and pushing new investment horizons out modestly. Much of this reflects in hiring practices and the delay of additional headcount until the second quarter or later.
Takeaways from the forum:
- CEOs are feeling the uncertainty of the market, as evidenced by slowing sales cycles.
- CEOs confessed that significant decisions are being postponed, which allows for observation of how the first part of 2023 will unfold. Most agreed that these initial three months would lay the foundation for the remainder of the year.
- Many CEOs are expecting the year to be characterized by margin expansion regardless of how the demand picture evolves. Pricing plays have been deployed to accelerate earnings, including those experiencing strong demand.
- Despite the emphasis on margin expansion, acquisitions are also on their minds, provided they match the value creation thesis the organization is pursuing.
- Many CEOs report diminished faith in go-to-market functions. All agreed that possible causes could be a challenging market, a lack of direction, or the fact that value creation shifts are driving a need for new and different capabilities.
Hearing that the bulk, if not all, of these CEOs are ignoring market distractions and making bold decisions to take quick, decisive action is reassuring. I believe that displaying conviction and direction is critical for preserving investor confidence and employee morale in this climate.
Strategies Going Forward
For CEOs whose go-to-market teams feel stuck or uncertain, I recommend the following strategies geared toward effective progress.
- First, resign yourself to take action. Too many companies have been trying to hedge their bets by sitting on the sidelines for too long.
- Conduct a revenue growth assessment (RGA). The best way to navigate uncertainty without sacrificing growth is by taking a planful approach to allocate resources. An RGA is critical to uncovering the investments that will net you the best return.
- Communicate your strategy to ensure employee buy-in. There may be tough decisions as you redirect investments, so you want to ensure everyone understands why these decisions must be made.
- Be sure productivity goals drive all headcount decisions. Bringing in new talent can feel like an easy way to turn things around, but it can be expensive and time-consuming. Be sure to exhaust options for maximizing efficiency with existing teams before instituting hiring initiatives.
- Proactively tighten your marketing belt and shift to initiatives to improve customer retention. Marketing is often one of the first places CFOs look when trying to cut costs. Get ahead by looking at SEO conversion rates and the ratio of market-qualified leads (MQLs) to sales-qualified leads (SQLs) to close rates. Based on that data, you should find resources to redirect toward customer loyalty programs that will help deepen and grow existing client relationships.
Ignore The Chatter And Focus On Your Business
Ignoring the chatter about uncertainty and moving boldly ahead is more complicated than it sounds. I think the reason many companies are falling behind is that they are listening to an external chorus of uncertainty when they should be focusing on their company's priorities and ignoring distractions.
By following the steps above and making decisive moves, companies can prioritize cost-cutting measures to maximize productivity from existing resources.
Thoughtful execution can restore employee and investor confidence, boost productivity, and reduce costs. It can also deepen client loyalty by emphasizing customer relationships through retention initiatives.
Best of all, when the recovery is in full swing, you'll be even better positioned to capitalize on it than before the downturn.
This article was recently featured in Forbes.