Executive Outlook: Chief Operating Officer (COO)

The C-suite has always faced the challenge of having to simultaneously run tomorrow’s race while also competing in today’s marathon, but that challenge has become even more difficult in recent years. Ongoing uncertainty and disruption has called for bolder, more assertive, and purposeful transformational leadership guided by well-executed strategy.

As part of our ongoing Executive Transition research, we have found that organisations are appointing a Chief Operating Officer to drive growth, boost organisational resilience, and generate value. As of 2022, 40% of leading companies had this role as part of their leadership team. The remit of this position has never been easy to nail down, and the role of the COO can be the most variable of the C-suite. As the world of work has evolved, so has the expectations of those in these positions to become catalysts for business impact.

While their title implies a strong foundation in operations, areas such as supply chain and customer satisfaction are equally of importance as the role of the modern and future COO will require much more diverse and well-rounded enterprise capabilities. Often considered to be the right hand of the CEO, the COO must pair their strategic and day-to-day operational capabilities with high-level relationship management, customer and stakeholder engagement. Rather than being a specialist in a specific capability, success in the role requires the executive to instead become a specialist of the business itself to become a driver and facilitator of its growth.

Here are some of the top skills required to be successful in the role for the foreseeable future, challenges faced, and factors to keep in mind if a COO role is your objective when undergoing an executive transition.

COO Snapshot

When working with our Executive Outplacement clients, we often encourage them to use LinkedIn to benchmark themselves against other candidates and to get a feel for the marketplace. A LinkedIn search for profiles in the UK with a current title of “Chief Operating Officer” yields approximately 15,000 results. While there is not much data available on the demographics of these executives, data from the US can help to paint the picture. In the US, COOs are predominantly male (76.6%) with an average age of 51 years old. The majority (89%) of these COOs are older than 40 years old, while the further 11% are between 30 and 40 years old. The COO role is found in businesses of all sizes, with most COOs representing mid-sized organisations with 50-500 employees (43%) or large organisations with more than 10,000 employees (21%).

As for tenure, the data shows that approximately one third (33%) of COOs will hold the role for just 1-2 years. 18% will have a tenure of 3-4 years, and a further 18% will have the title for 5-7 years. It is not entirely uncommon to hold the role for longer stretches of time, as 11% of COOs have a tenure of 11+ years.

According to Glassdoor, the average UK base pay for a Chief Operating Officer is approximately £111,000 per year. However, pay scales for the role range from £59,000 and £211,000. The average additional cash compensation for COOs in the UK is £40,000. Of course, the financial reward for the role will vary by region, industry, and size of the business. Those currently in the role might find that moving company is their best option for increasing their earning potential.

Top COO Skills

The role of the Chief Operating Officer has become increasingly important in recent years, but rarely do these positions have a clear job description. Because their remit is so varied, a COO’s skillset is arguably the most versatile of anyone else the C-suite apart from the Chief Executive. Some of the most valuable characteristics of successful COOs include:

• Broad enterprise capabilities: Unlike the CFO, CTO, or CMO who represent specific functions and must be experts in their respective areas, the COO needs to be a generalist. While many will rise to this role from a more specialised background in finance or supply chain, a COO’s day-to-day means that they need to have an understanding of all areas of the business. An organisation is the sum of its parts, and it falls on the COO to ensure all those parts are moving seamlessly together to reach targets and deliver on strategic objectives. The COO needs to have enough understanding of how those different parts function to spot inefficiencies and remedy them. Having to oversee the organisation’s complexity provides a broad viewpoint and deep enterprise insight that can be beneficial for success as a COO, and especially beneficial to those ascending to CEO later. The most effective COOs are those with strong, well-rounded strategic, CX, operational, people, and commercial capabilities rather than narrower expertise in one or two of these areas.
• Adaptability: Due to having to wear many different hats on any given day, adaptability is critical for success in this role. Because the modern COO role comes with so many different mandates and responsibilities, it is rarely defined. This lack of a structured remit requires those in these positions to encourage their teams to pivot quickly and often, and encouraging the right culture and effective operations to do so is a crucial attribute. If this capability is not inherent, this would be an ideal area of focus for personal development. COOs need to keep their finger on the pulse of the business, their industry, and the marketplace at large. While it won’t be possible to predict every bump in the road, becoming more adaptable will help COOs become better at anticipating changes as they crop up.
• Execution and Delivery: Because so much of the organisation’s strategic mandate flows through the COO, it is crucial for these executives to be inclined towards action. Being able to identify organisational inefficiencies, develop strategies to remedy them, and enacting those plans with desirable outcomes is the true measure of success in this role. Are you able to see the business from multiple stakeholder views, and do what needs to be done to innovate and create improvements? Do you have what it takes to both create the vision and lead others to bring it to fruition?
• Relationship Management: A COO’s ability to deliver goes a long way for instilling trust and credibility among stakeholder audiences, which is a critical task for any executive in this role to accomplish. Among the C-suite, the COO’s visibility in the organisation is one of the highest. With their hands in so many different areas of the business, COOs are constantly having to navigate different audiences and perspectives. The COO needs to juggle their relationships with the rest of the C-Suite and Board, other senior-level leadership, staff further down in the business, customers, investors, and suppliers. Each of these audiences will have different needs, priorities, and insights. Therefore, having a high emotional quotient makes it much easier to forge and maintain strong support among all the groups you vacillate between on a regular basis. Being willing to listen to these differing perspectives will help you inform your own strategy, and your abilities as a communicator will be crucial for expressing your plans and objectives to your various audiences and getting them on board.

Top Market Challenges Impacting COOs

The skills above will be critically important as COOs attempt to navigate the challenges of the current business landscape. Some of the top factors that these executives should be aware of are:

• Short-term Firefighting: When was the last time your organisation could rely on a five- or ten-year strategic plan? Surely it has been a while. In recent years, COOs and the rest of the C-suite have been faced with having to deliver on strategic objectives while battling near constant interruptions. The unexpected pandemic and its resulting aftershock of difficulties added more challenges to the C-suite’s already full plate, so understandably, dedicating energy to putting out urgent fires has taken the focus away from longer term planning or adhering to big picture goals. The COO role is highly strategic in nature, and executives in this position need to keep one foot in the present and the other stepping forward towards the future. Getting wrapped up in delivering impact in the short-term creates the risk of this becoming a cycle. While this might be good for in the moment agility, the business’s future competitive edge is at stake.
• People and Resources: It is no secret that this is a tough time for the jobs market and for the global economy. These challenges have trickled into many businesses, leading to tough staffing decisions, cutbacks, organisational restructuring, and reprioritisation. Even those businesses who are looking to grow are facing hardships with attracting and retaining talent with the right skills and capabilities. Lack of people and fiscal resources presents major operational difficulties that many COOs will be tasked with finding solutions to. For the foreseeable future, COOs should anticipate being tasked with having to do more with less and be very strategic about their resource allocation.
• ESG and CSR: But internal resources are not the only resources COOs and their stakeholder audiences are worried about. Sustainability has become a major area of focus for both businesses and their customers, with many organisations introducing carbon reduction initiatives and committing to net zero targets. Therefore, incorporating ESG into company strategy has become an essential expectation for the COO and the rest of the C-suite. However, it is not enough to simply set targets. The organisation needs to be able to ‘walk the talk.’ The business’s efforts must be perceived as genuine and be supported by real action. It will fall on the COO to help determine what targets are most achievable for the business, and to help generate the necessary internal support.
• Digital Transformation and Cyber Threats: The current wave of digital transformation presents an opportunity for businesses to become more agile, efficient, and competitive through the adoption of advanced technologies. But with increased reliance on technology comes increased cybersecurity risks, which of course threatens a business’s operations. COOs are having to keep these threats in mind as they help shape the organisation’s digital transformation plans and wider strategy.

Top Priorities

Given these challenges, current and aspiring Chief Operating Officers should focus their attention on these key areas:

• Supporting the CEO: We have spoken at length about the difficulties and pressures facing CEOs, and oftentimes, COOs are appointed to help support or drive CEO performance. This may take one of two forms. The first option is for the COO to take on a complimentary role to the CEO, possessing opposing traits and characteristics that offer different perspectives, insights, and ways of working that lead to better outcomes. Alternatively, they may take on a partner role and be viewed as another version of the CEO, lending support to their ideas and sharing in their vision. Regardless of which form is taken, it is an unspoken understanding that the COO is there to drive performance at the top. This may involve challenging the CEO to think differently or taking on some of the burden to alleviate their pressures. The relationship between these two senior roles is one of the most crucial in the business and has the potential to make or break the organisation’s effectiveness.

Others will enter the COO role as the heir apparent to the CEO, appointed with the expectation and understanding that they will one day be at the helm. Historically, the COO role was the primary steppingstone to the top job, with 76% of new CEOs in the early 2000s having started as a COO. Today, COO is still the most common starting point for CEOs but to a lesser extent, with nearly 27% of CEOs in Fortune 500 and S&P 500 companies promoted from the COO role in 2021. Comparatively, only 8% of CEO promotions in 2022 were from the CFO position. It would be naïve to enter the COO position without potential succession in mind, and therefore executives in these roles or aspiring to them should make the most of the time they spend in this position. Learn all you can about the business and its people. Increase your visibility and support so that when the time comes for you to ascend to the CEO spot, you can dedicate less time to generating buy-in and building your credibility. Of course, you need to ensure you are not so wrapped up in your next role that you neglect your responsibilities as COO. The COOs who tend to overperform in the Chief Executive role later are those who draw on the experience and knowledge they gained through shaping and delivering operational excellence.

• Strengthening Strategic Relationships: However, it is not just their relationship with the CEO that Chief Operating Officers need to be mindful and protective of. As mentioned, COOs operate throughout the business and therefore must navigate a wide range of internal and external audiences. The COO needs to be able to cooperate with the rest of the C-suite and the Board, work effectively with senior leadership, instil confidence in investors, generate buy-in from the rest of the organisation’s staff, and demonstrate value to customers and partners. One of the most important strategic relationships the COO is tasked with nurturing, however, is that with the organisation’s suppliers. The past few years have been incredibly disruptive at the operations and supply chain level, and new and reliable suppliers can be hard to come by. In PwC’s latest COO Pulse Survey, 57% of responding COOs reported building closer relationships with suppliers is very important to transforming their business operations. As a result, executives at this level need to be thinking more strategically about how their relationships can be leveraged to improve stability, increase quality, and optimise pricing. Fostering fruitful partnerships will be critical, but today’s COO’s need to be willing and able to cut ties as needed to better serve the business. An ability to effectively judge your relationships will serve you well in the role.
• Strategic Workforce Management: Of course, the Chief Operating Officer’s strategic vision is null without the right people in place to enact it. Hiring has been a challenge for businesses across industries since the onset of the pandemic, but COO’s personnel interests are less about getting bodies through the door and more about getting the right talent in the right positions. Having highly skilled talent can make the business leaner without sacrificing on efficiency. The right talent is worth more than having a broad workforce that does not necessarily deliver at the desired level. As businesses restructure and rethink their personnel priorities, COOs should champion quality over quantity to make the most of the organisation’s resources.
• Doubling Down on Digital: Investing in new technology will help with this as well. Artificial Intelligence (AI) has been a major area of interest for COOs in recent years due to the productivity benefits it can produce without increasing workloads. Automation is nearly always a wise investment from an operations standpoint by helping to streamline, predict, and execute. After much resistance, businesses and their C-suites have begun embracing new technologies rapidly. COOs have no choice but to get on board with digital transformation and champion it in their strategy. Coming to grips with this technology makes it possible to plan for it more effectively. Current and aspiring COOs should dedicate the time to researching macro trends and sharpening their own digital capabilities to deliver long term value.

If you are a current Chief Operating Officer looking for your next executive role, or an executive looking to transition into a COO role, we can help. The Rialto Consultancy offers a range of career strategy services including Executive Outplacement, Executive Career Coaching, and Personal Branding. Get in touch with our team to discuss your options to make a game changing transformational career move.

On average, an adult makes approximately 35,000 conscious decisions every day. Some of these choices are as simple as ‘tea or coffee,’ while others have much higher stakes. For business leaders, that number is likely much higher and many of those decisions hold much greater weight. Day-to-day, senior executives are tasked with making choices that impact their business, their people, their customers and – in certain cases – wider society.

Each individual leader will have their own approach to decision making, with some preferring to seek the advice of trusted peers while others rely on their own intuition. In fact, research has found that more than 40% of CEOs make decisions based on gut feelings. But in our increasingly digital age, businesses and their leadership have a powerful weapon in their arsenal that hold incredible value for making smarter, more effective decisions.

Understanding Data-Driven Decision Making

‘Data’ is not unique to the digital age. Before the somewhat recent wave of digitisation and the subsequent migrations to cloud storage, businesses kept physical records locked in filing cabinets or stored in boxes. These methods were not necessarily the most convenient or secure but served their purpose of telling the story of the business via facts and figures.

Data looks rather different in the digital age. With our shift towards smart devices, social media, and e-commerce, businesses today have access to more data than they realise or utilise. The volume of online activity makes it difficult to pinpoint exact figures, but estimates suggest that 2.5 quintillion bytes of data are created each day. Every interaction, every web search, every sale, and every activity between the organisations and its audiences creates a data trail that helps the business to gain a better grip on its standing in the marketplace and among its customers and competition.

The process of using this information to guide the business strategy and validate courses of action is commonly known as Data-Driven Decision Making (DDDM). Organisations may do this by analysing macro trends and research from credible third parties, conducting their own surveys and focus groups, or running tests to generate original insights on specific products or business challenges. These and other DDDM practices have been used for centuries. However, an innately modern phenomenon is occurring wherein an increasing number of companies have begun using advanced technologies such as artificial intelligence (AI) to analyse the wealth of digital data produced by the everyday digital activities of the business.

Combined, these methods provide deeper insights into the activities of the business, its people, and the markets in which it operates.

Why Use DDDM?

According to a PwC survey of more than 1,000 senior executives, highly data-driven organisations are three times more likely to report significant improvements in decision-making. It is easy to understand why.

In the wake of the pandemic and its aftereffects, it has become more important than ever for businesses to develop the right strategy and prioritise actions that drive impact. The challenges in the marketplace have made it imperative for leaders to make wise choices regarding their products, customer experiences, operations, personnel, suppliers, and more. However, the stresses of navigating the tumult amid pressures to deliver business impact can often cloud judgement and create space for irrationality.

Becoming data-driven can help to keep the business on track by creating a stable model for decision-making that can withstand both troubling times and ideal operating conditions. Much of its value can be attributed to the fact that data is inherently objective. At some point or other, all of us will have heard the phrase, “Numbers don’t lie.” Data offers a similar infallibility. While it is possible for biases to creep into data collection methods and taint the outcomes, overall, data lacks the subjectivity and ‘blind spot’ thinking that intuition-based and other decision-making methods possess. When collected properly, data paints a picture of the way things are rather than presenting individuals or the business through the lens of how you perceive or wish them to be. It may not always be what we want to hear, but data will tell us everything we need to know to grow and evolve.

Because of its ability to benchmark the current position of the business, data makes it possible to better understand the potential impacts of any subsequent decisions and track progress along the way. Data can lend credibility to gut instinct or help steer leaders away from paths that may not deliver the desired impact. This is crucial in times of turmoil when every decision carries extra pressure, and resources may be increasingly valuable. Data analytics and insight generation can often highlight issues that may require immediate attention, areas for improvement, develop risk metrics or potential cost savings. On their own, these insights may seem small, but can help inform a wider strategy that pilots the business towards a more favourable position.

Since data is both logical and objective, it is much easier for business leaders to become more confident in their decision making over time. This confidence will be key for generating buy-in for any strategic initiatives and earning trust for the leadership team. Staff, customers, and other stakeholders want the business to be led by leaders who have proven their competence and their ability to make good judgements. Prioritising data in decision making increases the likelihood of achieving the best possible outcomes much more often, thus increasing the credibility of the leadership team in the eyes of their audiences, as well as the leaders’ own sense of conviction.

Top DDDM Challenges

This is not always as easy as it may seem. In the most recent NewVantage Partners annual survey, which tracks the progress of corporate data initiatives, just 26.5% of organisations reported having become data driven. The biggest challenge seems to be a people issue. 91.9% of executives in the survey cited cultural obstacles as the greatest barrier to becoming data driven. Crafting a successful data culture requires shaping collective beliefs and behaviours to unite all levels and areas of the business over a shared mission to lead with insight.

As with any major organisational change, there needs to be effort invested into communicating objectives, creating alignment, and ensuring the right values and priorities are embedded into the organisation’s practices. Leaders may experience pushback or resistance and will have to work through these changes collaboratively with their people. Data is a fluid asset that flows throughout the business and transcends organisational boundaries. Therefore, it can at times become difficult to assign clear ownership to it, which increases the complexity of managing the business’s valuable information. Communication is critical for assigning responsibility and creating the necessary alignment across teams.

The nature and sheer volume of the data itself presents obstacles as well. The majority of this information is unorganised with experts predicting that by 2025, 80% of global data will be unstructured. This form of data is more difficult to analyse, quantify, and search through. Common examples include email communications, photos and videos, social media posts, websites, and open-ended survey questions. When you consider how many of these items are generated each day, the burden of data analysis becomes much heavier. That is why many businesses looking to become more data driven have begun rapidly adopting advanced technological tools that are capable of assigning meaning and gleaning insights from this mess of information.

How data is collected, managed, and shared creates a major challenge both internally and externally. Customers are not naïve to the fact that the organisations they do business with collect and use their data. Over time, consumers and businesses reached an unspoken social contract in which customers agree to surrender their data in exchange for better products, services, and experiences. But as part of this agreement, it is also expected that the business will use and store this data in a way that safeguards their customers. In recent years, we have seen companies including British Airways, Yahoo, Marriott Hotels, and various social media platforms experience major backlash when this trust is breached. We have also seen the introduction of specific laws, such as GDPR, designed to provide additional protections to consumers in the data age. Navigating the ethical and regulatory considerations of fair data use is a challenge every business needs to take very seriously.

Becoming Data-Driven

But how can leaders overcome these obstacles and put DDDM into practice successfully? At Rialto, we consult with C-suite executives, Non-Executive Directors, HR Directors, Board members, and other senior leaders on strategies to enhance their capabilities and keep pace with the evolving marketplace. Our experts are advising senior leaders to develop a greater focus on the following:

• Maintain an Open Mind: The first step to becoming more data-driven is to be willing to take it on board. Data will not always tell you what you want to hear or confirm the beliefs you may have, which can be uncomfortable. This discomfort may be especially strong for leaders who have historically relied on gut instinct in their decision making. To reap the benefits of data, you need to think of it as an ally. Leaning into your organisation’s data can make you and your business more efficient, more effective, more strategic, and more targeted than ever before.
• Take a Proactive Approach: DDDM is most often reactive in nature. An insight is presented by the data which in turns triggers a decision to either remedy it or follow in the direction it leads. While this is often fine, sometimes the insight is gleaned too late for the subsequent action to make a real impact. Therefore, leaders should aim to use data proactively to become more strategic. Data does a great job of presenting what is, but it is also very useful for assessing what could It is possible to leverage insights in a way that enable the business to test potential courses of action, predict trends, or identify budding problems before they worsen. Learning to use your data in this way will help you navigate the present while setting your organisation up for the future.
• Keep Data at Your Core: Of course, for DDDM to be effective, it needs to be consistent. Your organisation’s data needs to be at the core of all decisions, not just the larger or more strategic ones. When deciding anything, leaders should reflect on the data rather than reverting to gut instinct or previous behaviours. Make it standard practice to tie all decisions back to the data to support your thinking. Use all any data sources available whether it is your digital data, research your organisation conducts itself, or simply the latest macro trends and stats. Over time, referring to the data and applying relevance to your decision making will become a habit that can support more analytical ways of thinking.
• Understand Where DDDM is Headed: While AI and other technologies are not the only way to assess or collect data, these tools are unrivalled for the depth and efficiency they can produce. Therefore, DDDM is relying more heavily on the insights created and presented by advanced technologies. AI is capable of analysing all the organisation’s digital data constantly in real time, a feat no human worker could replicate. This technology can also process and make sense of millions of data points in a matter of seconds. It would take a human worker months of nonstop work to get through this volume of information, and by the time they finish, it is likely that the trends and market conditions will have changed. To keep abreast of ever-changing consumer habits and economic fluxes, businesses will increasingly rely on digital DDDM tactics moving forward. Understanding this now will help to prepare for this inevitable shift.
• Upskill as Needed: That said, it is critical for leaders to have the right digital capabilities for navigating the future of DDDM. Given where DDDM practices are headed, a baseline understanding of AI will be of value to any leader possessing decision-making responsibilities. To support data-driven mindsets, leaders should also look to increase their analytical thinking capabilities. Being able to make sense of patterns, spot anomalies, and derive meaning from charts and figures is a crucial aspect of becoming data forward. The ability to translate raw figures into business relevance and commercial thinking will also serve you well. Additionally, honing softer skills like communication and collaboration are crucial for creating data driven cultures. The most effective data-driven leaders are those who empower their teams to become active contributors the business’s growth. Focus on improving these areas to get the most of your DDDM activity.

If you would like support with strengthening your capabilities through Leadership Development executive coaching or creating a data-driven culture within your organisation via our Business Transformation services, please get in touch with our team.

There is no question that 2022 was yet another challenging year for businesses. Interest rates reached record-breaking levels, war broke out on European soil for the first time in decades, inflation hit a near 40 year high, and the disruptions that began in 2020 continued their ripple effects.

With a New Year ahead, the blank slate of the next 12 months presents fresh opportunity, but also holds unknown challenges. The challenges of last year did not cease to exist once the clock struck midnight, but what will they mean for us this year?

To help you prepare, we have compiled an overview of some of the latest key executive outplacement market statistics and issues to be aware of when navigating the market in Q1 2023.

Market Snapshot

Before making predictions about what lies ahead, it is important to get a sense of where the executive outplacement market currently stands. There are both positives and negatives to be found, as indicated by the latest ONS Labour Market Overview report. The estimate of employees on payroll for November 2022 showed a monthly increase of 107,000 on the previous month’s figures to a record 29.9 million, meaning employers continue to seek out full time employees with the right skills. This coincides with a decrease in the economic inactivity rate, which decreased by 0.2 to 21.5% in the latest report. The decrease was driven by those aged 50 to 64, mostly due to them leaving retirement and returning to the workforce amid economic turmoil.

At the same time, both vacancy and pay figures remain stagnant. In the latest ONS report, the estimated number of vacancies fell by 65,000 on the quarter to 1,187,000. Growth in average total pay (including bonuses) and regular pay (excluding bonuses) among employees for August to October 2022 held steady at 6.1%. Zooming in by sector, average regular pay growth for the private sector was 6.9% and 2.7% for the public sector. The ONS states that this is the largest growth rate seen for the private sector and is among the largest differences between the private sector and public sector growth rates we have seen outside of the pandemic period.

After adjusting for inflation, total and regular pay both fell by 2.7%. While this is slightly smaller than the record fall in real regular pay (3.0%) which we saw earlier in 2022, this end-of-year figure is among the largest decreases in growth since comparable records began.

2023 Predictions

It is not just pay that will be affected by the economic difficulties we continue to face. The fall in vacancies reflects a general caution across industries about the market and financial conditions, and the challenges will not stop there. Here are our predictions for what lies ahead between January and March 2023:

• Recession fears to become a reality: For months now, the possibility of a recession and making preparations for one have been a key topic of discussion, however this has yet to be officially declared in the UK or across most of Europe. The UK experienced unexpected growth in November 2022 bolstered by the World Cup, leading some experts to question if the situation is really as dire as it seems. The German economy, Europe’s largest, stagnated in Q4 2022 but grew by 1.9% across the year, indicating the country may narrowly escape a recession.

Despite this optimistic blip, we are not quite out of the woods yet and recession is still a very real possibility. The latest forecast from World Bank forecasts that recession is a seemingly likely outcome for us, with their latest Global Economic Prospects report predicting that the global economy will grow by only 1.7% this year. This is a sharp fall from the 3% growth they predicted in their previous report published in mid-2022. The world’s three most prosperous economic regions—the US, the Eurozone, and China—are expected to experience a ‘period of pronounced weakness,’ with their downturns more significant than those experienced by poorer nations. After surging by 5.3% in 2021, growth in the world’s richest economies is likely to slow to just 0.5% in 2023. Therefore, despite the optimistic outlooks possessed by some, it is likely not a matter of if we will declare a recession, but a question of when.

As the conflict in Ukraine surges on, the impact of the coronavirus pandemic continues to create ripples, and inflation rests at record heights.  We seem to get closer to an official declaration of recession every day. Therefore, it is certainly not out of the question that this announcement could be made in Q1. Should this happen, this would be the first time in over 80 years that two global recessions have occurred within the same decade. With the 2008-09 recession a recent memory, many businesses and executives will be proceeding with caution. Everything that happens now will be a result of recession wariness.

• Hiring will slow and freezes will continue: Higher interest rates and inflation have hit businesses hard, while higher costs of living have reduced customer spend. This has led many businesses to restructure and tighten up their budgets to preserve their financial health as much as possible. Typically, staff is the first area impacted.

We have already seen cautionary shrinkage in the jobs market reflected in the previously mentioned ONS data, and that contraction will most likely continue throughout Q1. In fact—within the first two weeks of 2023 alone—Amazon, Salesforce, Goldman Sachs, Barratt Developments, JLL, and Liberty Steel have all announced redundancies and hiring freezes that will impact their UK workforces. Others have announced that they are considering making cuts in the near future. That said, expect a pause rather than mass redundancies. Data from Iwoca found that nearly four in five companies plan to keep staffing levels unchanged in 2023.

While this is certainly concerning, opportunities remain available, especially at the senior level as the need for strong relevant leadership increases.

• Battling slowdown versus innovation: Businesses will face the uncertainty of the current slowdown whilst also having to navigate the challenge of needing to remain at the forefront of innovation disrupting every industry. Of course, the challenges in the market will impact each industry and sector in their own way. As one might expect, some will find balancing harder than others.

In the final quarter of last year, we saw a downturn in VC activity as investors opted to sit out the turbulence in the market. In the technology sector, which is central to the venture capital landscape, the last year has brought the steepest and widest drawdown for a generation. However, VC funds remain very well stocked to make rounds of new investments at much healthier valuations compared to one year ago. Predictions from London and Partners indicate the UK tech sector is showing resilience despite the challenges seen in many other major European cities, with sectors such as Fintech, Edtech and Gaming thriving.

In addition to this, for the first time, we saw every single subsector in Financial Services heading downward, with the biggest falls seen in Banking and Markets and Investment Management. Here at Rialto, our team also observed US employers made far more aggressive job cuts than their UK, European or Asian counterparts – almost without exception.  The focus on improving services for people remains high, as does the focus on aligning banking practices and technology to global/social problems. However, for the past decade—and maybe even longer than that—sustainability issues have remained as the key agenda item despite the cost-of-living crisis presently causing major threats to progress.

Retail is another sector we expect to have a particularly tough quarter ahead. Decreased customer spend, disrupted supply chains, and higher costs resulted in a December 2022 sales gain that was lower than the rate of inflation, meaning people likely bought less due to having to pay more. With no end to these challenges in sight, retail faces a tough Q1. We expect to see hiring freezes and redundancies here, but equally acquisitions and changes in leadership will be on radar to keep businesses afloat. Innovation will show itself in different ways, as retailers continue to go more ‘hybrid’ with their offerings beyond their normal inventory.

Manufacturing will also continue to struggle. The latest S&P Global/CIPS UK Composite PMI recorded falls in new manufacturing business for a fifth successive month, and as a result jobs were also lost for the third month running. In addition to this lack of new business and ongoing supply chain difficulties, the industry has been hit hard by the energy crisis. Costs have become a major concern. According to an industry survey conducted by Make UK and PwC, 70% of companies expect their energy costs to increase this year, with two-thirds saying they expect to cut production or jobs as a result. Rather than hiring new talent, manufacturing will likely turn to upskilling and retraining existing staff. 52% of respondents in the survey reported that they are engaging in this activity. Those looking to advance or enter manufacturing in Q1 or beyond will need to ensure that their skills are on par with those which firms will be instilling in their existing workforce.

Planning ahead

While we continue to teeter on the precipice of a recession, it is important to remain both optimistic and realistic. Yes, the coming months will be challenging, but will this really feel out of the ordinary given how much disruption has occurred in recent years? Just as we persevered through the pandemic and all of its ripple effects, we will adapt once again. We may escape recession, or we may not. Either way, opportunities in the executive outplacement market will remain, and executives should continue to be at the forefront of market changes to reposition themselves, upskill, and retain visibility as a leader of the future.

If you are considering undergoing an executive job search or career change during this period, you may face new barriers but not total roadblocks. It is important to keep visible online and active among your networks. Your personal digital brand remains one of the most valuable weapons in your arsenal for attracting and obtaining new opportunities. Instead of shying away from the challenges in your industry, use them to develop your thought leadership. Showcase your expertise and apply your insight to real issues impacting your business, industry, or job function.

Double down on skills and work on developing capabilities that will benefit your current or potential employer when navigating current and future market conditions. Upskilling will likely be the go-to strategy for businesses this year when it comes to their talent and recruitment, so it is essential that your abilities are on par with what your target organisations are expecting from their current staff. To gain a real competitive advantage, develop skills that exceed these expectations.

As always, if you would like personalised, one-to-one support with navigating your career transition or would like to explore our specialised capability of securing c-suite decision maker meetings for you in any industry globally, our team can help. Get in touch with us to discuss our bespoke programmes for personal digital branding and executive job searches.

At this point, we are no longer strangers to disruption. It feels as though we have adapted, redirected, and flexed nonstop since early 2020 to the point where this has become our default mode of operation.

2022 was a continuation of this way of being rather than a deviation from it. While we saw the end of most of the remaining COVID-19 restrictions worldwide, the effects of the pandemic continue to ripple through our personal and professional lives. Rising inflation, geopolitical tensions, disrupted supply chains, greater adoption of emerging technologies, and shifts in the job market have created a new landscape for leaders to contend with as we wrap up this year and prepare to begin anew.

Naturally, many leaders are concerned about what lies ahead for the next 12 months, and what these hurdles might mean for their business’s growth, profitability, and shape. As many of our clients move their focus to 2023, we are highlighting five of the main challenges and priorities they foresee ahead.

1. Transforming Business Models and Culture

With accelerated and disruptive changes remaining a constant, business leaders need to continue to adapt existing business models, experiment with new approaches or change direction, informed by past lessons. If the last several years have taught us anything, it’s that we need to embrace flexibility and agility to overcome challenges. Many businesses and their leaders have adapted out of necessity rather than strategic or competitive motivations. That needs to change in 2023.

Business leaders can no longer ride the waves of disruptions in an attempt to keep their heads above water. The time is coming to think differently and boldly. Agility is a critical component of this adjustment, but rather than simply flexing with the times, leaders need to be tracking the disruption and looking a step ahead.

If supply chains are insecure, efficiency and costs need adjustment, and customer expectations are fluctuating now, what might that look like moving forward? What implications might current disruptions have in both the short and long terms? What changes to organisational goals, standards, and practices will need to be made as a result?

This is the time for leaders to shake the constraints of legacy thinking and models. What has historically worked may no longer fit the current and future needs of the business. In 2023, leaders will be tasked with determining which models and practices or team mindset are most effective and implementing them into the organisation’s ecosystem.

Expect to see continued shifts in the ways we work as a result. Hybrid working models have been with us long enough now to no longer be considered ‘exploratory,’ so expect to see businesses solidifying their stances on their staff’s office attendance in 2023. Hybrid calls for more fluid organisational hierarchies, with employees taking on more individual self-management responsibility and working more closely together. Rather than making decisions and edicts in a top-down management style, the role of the leader in 2023 will be more focused on encouraging and empowering the rest of their team’s decision making, autonomy, innovation, and collaboration.

2. Talent Shortages

Businesses will continue to face challenges in building teams in 2023. The effects of the pandemic’s ‘Great Recession’ are still with us all, with PwC’s Global Workforce Hopes and Fears Survey from earlier this year finding that one in five workers globally had plans to quit in 2022. Moving into 2023, we are also contending with trends such as ‘quiet quitting’ in which employees’ burnout impacts their motivation and productivity, as well as many major organisations enacting their own hiring pauses in reaction to economic difficulties.

All these factors combine to create a turbulent talent market in the new year. Many executives will enter the ‘job’ search either unwillingly as the result of redundancy or corporate restructures, or willingly in search of increased reward or deeper fulfilment. Rialto Associate Director Nicholas Storey expects that the latter motivation will be a key factor driving the talent market in 2023. He says:

“YouGov data has found that only 17% of people actually enjoy their jobs. That means that the other 83% are waking up to attend jobs that either don’t excite and fulfil them, don’t pay them enough, or don’t match their skillsets. After enough time, that will wear on a person to their breaking point at which time they will likely undergo a transition. On the business level, this is a big issue as you end up with staff that are dissatisfied, not invested in your organisation’s mission or objectives, and on their way out. I think 2022 was a wakeup call for many leaders in this regard, so I expect that in the new year these leaders will actively look for ways to help their employees feel more fulfilled and valued where they are while also enticing new talent to come on board.”

Employers need specific skills on hand to grow the business and deal with the challenges ahead, and therefore they need to be in the best position to develop their existing teams and attract any skills by they don’t have. Retaining and attracting employees will be a top priority for HR directors and other leaders in 2023 but will be difficult to accomplish with such fierce competition in the marketplace. While the Great Recession and corporate cutbacks have injected an influx of talent into the market, not all these professionals possess the in-demand skillsets that will help propel the business into the future. Therefore, competition for those individuals who do possess these capabilities will be fierce. Organisations need to consider what they can offer to new talent that sets them apart from other businesses, whether it be financial reward, aligned values, opportunities for progression, training, or beyond.

3. Upskilling for Teams and Leadership

If leaders cannot recruit the talent they need, then they will need to cultivate talent and skills required in-house.  Investing in skills and training for current staff can help ensure the business has the skillsets it needs for ongoing success without the difficulties of having to recruit it. Not only does this set the business up for success, but it also helps to deepen employee’s individual investment into the business and improves retention. Expect to see more businesses invest in in-house training or funding outside learning opportunities for employees in the new year.

Leaders will need to invest in their own skillsets as well to stay relevant. However, leadership is complex and varies by person and organisation. There is no singular recipe or combination of skills that ensure a leader will be successful in their role, but there are a few areas where senior executives can focus their efforts in response to the varying shifts in the marketplace to become more effective in highly disrupted environments.

While it will be imperative for those at the helm to have the necessary technical capabilities that their roles and industry might require, at the leadership level there is an even greater need to focus on the development of skills that help those in charge to better engage their stakeholder audiences.

‘Human-focused’ skills like communication, collaboration and empathy will be important focal points in 2023. The pandemic created a need for more compassionate leadership and continues to matter as we enter 2023 amid financial strains, geopolitical instability, and other challenges. Leaders need to be able to show resilience themselves whist also taking time to understand the circumstances of their staff, stakeholders, and customers so decisions can be made with those groups front of mind.

If future success is to be achieved through cross-department collaboration and empowered teams, then leaders need to be able to bridge the gaps between groups and create alignment. As mentioned, many organisations will be shifting away from top-down leadership styles in 2023. For this to be successful, communication will be key. It falls on leaders to engage their teams, customers, and other stakeholder audiences in conversation to gain insight and identify future opportunities and areas for improvement or diversification. Amid so much change, leaders will also need to ensure they are sharing the right messages with the right audiences at the right time. This requires tactful communication skills that take time to hone and develop therefore doing so would be a worthwhile investment for any senior executive in 2023.

4. Accelerated Digital Transformation

Of course, strong digital skills will also be imperative at every level as digital transformation disrupts at an accelerated pace. According to data from Vistage, despites 86% of decision-makers expecting a recession, the majority of leaders are poised to spend more on technology in 2023. In fact, 51% expect to increase spend by an average of 21%. This will involve a modernisation of both hardware and software in an attempt to streamline practices, make better use of data, and optimise organisational efficiency.

There are several major trends that business leaders should be focusing on in 2023. Cloud technologies and ‘bossware’ tools will remain popular as staff splits their time between home and the office and leaders aim to keep track of productivity. Augmented and Virtual Realty (AR and VR, respectively) tools are positively impacting the experiences that companies can deliver to their customers and are in the early stages of reshaping how we work via the Metaverse. However, one technology continues to reign supreme above all others.

Artificial Intelligence (AI) will remain a top exploratory area for businesses in 2023 and will touch every industry and function in some capacity. Rialto consultant Katie King is well-versed in this shift, having published two books on the impacts of this technology on businesses. She predicts:

“We are seeing record AI adoption following the pandemic, and the population of businesses actively using and exploring this technology far outnumbers those who continue to resist it. AI makes it possible to overcome so many of the challenges that plague businesses today such as delivering results with limited teams and resources, managing a disrupted supply chain, and navigating ever-changing customer demands. There are so many tools and vendors already in the marketplace, which may make it feel a bit overwhelming to start but also lowers the barrier of entry for businesses looking to adopt. I expect that many of the holdouts will shed their AI inhibitions and get on board in the new year and that this technology will be an integral part of many business functions by the end of 2023.”

Expect to see AI take on a more active role in the new year. HR will enlist automated tools for their recruitment, training, and employee engagement activities. Manufacturing and operations will assign AI to resource optimisation, maintenance, and supply chain management. Sales and marketing will use technology to better understand customers, deliver more personalised experiences, and keep on top of trends while management will leverage AI to gain real-time insight into all areas of the business. There is not a single function that will not be impacted by technology, and businesses seem more open-minded than ever about embracing it.

Of course, as practices become more digitally driven, risks increase. Cybersecurity threats are at an all-time high with new threats emerging every day. As businesses invest in new tools, they must also be thinking of ways to safeguard their systems against any vulnerabilities. Therefore, it is essential when assigning 2023’s technology budget to allocate funding for security initiatives. All it takes is one breach for customers to lose confidence in your business entirely.

5. Sustainability

All that in mind, a threat bigger than cybersecurity, inflation, technology, and talent shortages looms above us all. Climate change continues to worsen year-on-year and cannot be ignored. As a result, customers are demanding greater transparency in organisations’ sustainability initiatives, climate-friendly products and services, and pledges from businesses to ‘do better.’ According to Harvard Business Review, over 700 of the 2,000 largest publicly traded companies—including 52 of the FTSE 100— have stated their intentions to reach net zero carbon emissions by 2050.

If your organisation has not defined its sustainability values and begun altering its practices accordingly, then 2023 is the time to do so. Take the time to zoom out on the big picture of your day-to-day activities and to think critically about the impact your business is having on the world at large. From there, you can begin to identify actionable steps towards change. You will not be able to drastically reduce your impact overnight or eliminate your environmental footprint entirely, but small actions can compound and amount to major impacts over time. In 2023, businesses might consider switching to renewable energy sources, reducing waste, tightening up your supply chain, or allowing staff to work remotely more often.

Beyond demonstrating your organisation’s dedication to the global issues that impact your people, taking the time to examine your practices may highlight other inefficiencies and potential cost savings you may have otherwise overlooked. At the end of the day, an investment in sustainability should be part of all decision making, no matter the cost.

After three full years of disruption and change, there is still more ahead in 2023. Therefore, it is critically important to take the personal time to reflect and learn from what has come before so that we may continue to evolve and drive business forward and remain competitive across an ever-changing landscape.

Today’s C-suite executives certainly have their work cut out for them. These leaders are responsible for piloting the business through turbulent times, inflation and economic downturn, supply chain security, fluctuating demand, global disruptions, and shifts in customer expectations. It’s a tall order, and a major challenge for many businesses looking to recover from these setbacks and step into the future with the right foot forward.

As a result, we are seeing many businesses make major changes within the C-suite to build leadership teams that are better equipped to deliver the necessary impact to help the business succeed long term. This has involved reshaping roles, introducing new voices at the top table, and shifting focus towards more strategic objectives.

Here are the 3 major changes organisations are making:

1. Titles Aligned with Strategic Goals

Historically, C-suite titles have been limited to departmental designations such as Finance, Marketing, or Operations. It made sense that the key functions of the business had representation at the top of the organisation, with the Chief Executive at the helm overseeing everything. While those titles still hold valuable places in the C-suite, many organisations have begun to understand that stronger leadership and ownership is needed for their strategic priorities.

That’s why when you look at many of today’s boards, you see newer titles such as Chief Diversity Officer, Chief Sustainability Officer, Chief People Officer, Chief Data Officer, and so on. Research from LinkedIn found that a search for titles incorporating the word ‘Chief’ returned 51 different variations, most of which reflect the changing priorities of top-level leadership.

These titles may appear gimmicky, but their value is anything but. The creation of these roles indicates an understanding from organisations that both the business landscape and the world at large are changing, and that the business needs to adapt accordingly.

Can the appointment of these C-suite executives fix the shortcomings in these priority areas overnight? No. However, having leaders with remits dedicated specifically to these issues creates accountability for the organisation and helps ensure that these issues have an ever-present voice in all decision-making processes. The act of appointing a Chief Sustainability Officer itself will not reduce the organisation’s carbon footprint, but it will help to ensure that sustainability is represented in all leadership conversations and has the internal support required to make change happen over time.

In addition to these strategic titles, we are also seeing businesses adapt, expand, and adopt certain roles to improve the organisation’s ecosystem orchestration and cohesion. For example, the Chief Growth Officer, Chief Alliance and Partnership Officer, and Chief Customer Officer may be tasked with connecting traditionally siloed departmental roles like marketing and sales and infusing external customer-facing objectives into internal strategy. The Chief Data Officer will likely be tasked with bridging technology with other areas of the business, an increasingly important task as businesses accelerate their digital transformation projects.

We mentioned in a previous blog that having a niche related to one of these highly important business priorities is a major asset for any top executive to bring to the leadership team. As the C-suite is evolving, there is potential for executives to combine their leadership capabilities and subject matter expertise to create real impact in these newer board positions. The expansion of the C-suite allows for more voices in the conversation and can help to shape the leadership team into one that adequately reflects the evolving needs of the business and its people. You may be able to bring something unique to the table, and your insight may be exactly what the business needs moving forward.

2. Purpose-Driven Activity

Beyond strategic priorities, these titles and appointments are also driven by organisational purpose. ESG has become a major focus for businesses, with Harvard Law School’s ESG Global Study 2022 finding that the European market boasts the highest percentage of ESG users at 93%, which is more than both North America (79%) and Asia-Pacific (88%). Research from Deloitte backs this up, as 79% of respondents in their survey of 212 C-suite leaders across various industries reported that their company has a clear and defined purpose strategy that is integrated with core business strategy.

But it isn’t just the leadership team that cares about environmental, social, and governmental issues. According to a study by PwC, 76% of consumers say they will stop buying from companies that treat the environment, their employees, or the community in which they operate poorly, while 86% of employees prefer to support or work for companies that care about the same issues they do. As more Gen Z enter the workforce and become a bigger part of the customer population, it is expected that more attention will be paid to ESG-related issues in the years to come.

Issues like climate change and D&I are at the top of every board’s strategic wish list, and it falls on the C-suite to deliver the desired results. Appointments of C-suite executives with ESG-related remits is on the rise, but it is also becoming increasingly important for C-suite members in all areas to integrate these issues into their own agendas. The C-suite needs to work together to create an aligned strategy that creates accountability throughout the organisation and provides a basis for each individual member to draw from with their own teams and activity. Executives can no longer afford to overlook ESG, nor should they try.

3. Increased Scrutiny

The ways in which the C-suite delivers on ESG goals, enacts the organisation’s purpose, and behaves in times of turbulence will not go unnoticed. These roles carry a lot of responsibility and accountability both internally and externally. C-suite executives must answer to various stakeholder audiences including their fellow C-suite and board members, their teams and direct reports, the rest of the organisation’s staff, as well as investors and customers. These roles require a high level of relationship management skills to meet the varying needs of these different groups. It is a juggling act, and there are often trade-offs to be made.

Sometimes, the leadership team gets it wrong. Other times, serving the best interests of one group negatively impacts another. These situations are undesirable but an inevitable reality for C-suite executives. Unfortunately, our increasingly digital activities heighten this scrutiny. Thanks to social media and the ever-active digital news cycle, word travels fast. The C-suite are no longer mysterious, faceless entities that sit at the top of an organisation and are relatively unknown outside their specific industries. Social media has made it possible for many executives to position themselves as thought leaders and share content with a wide-reaching audience, while a 24-hour news cycle is able to pay more attention to things that might have otherwise been missed or selectively passed over. We are even seeing a rise in some C-suite executives becoming micro-celebrities outside of the business world—think Elon Musk, Jeff Bezos, and Sheryl Sandberg.

This increased attention can be both positive and negative. On one hand, a positive public perception of a leadership team can reap various benefits for customer loyalty, investments, and market performance. On the other hand, it puts additional pressure on C-suite executives to toe the line and deliver impact. In the wake of a scandal or organisational shortcomings, it is often the C-suite that bears the blame both internally and externally in the court of public opinion. C-suite executives need to be poised to perform under pressure and immense scrutiny despite challenging circumstances.

Our Advice

Navigating these changes may provide challenges for seasoned and long-serving members, or prove intimidating for new executives. Our executive career advice for overcoming these hurdles and driving impact is to:

• Be flexible. The only way for the C-suite to overcome change is to anticipate and adapt to it. Keep an open mind and remain agile. As the C-suite expands to give voice to more diverse perspectives, don’t write these new appointments off as a box ticking gimmick. Be open to these new perspectives and be willing to collaborate and learn. The C-suite is the sum of its parts but is at its best when those parts work in harmony. Be willing to take feedback on board, adopt new ideas and practices, and change direction as needed.
• Look ahead. Yes, we are seeing a rise in titles related to timely issues such as remote work experience, well-being, and AI, but what comes next? Executives should take time to study trends in the market to improve their understanding of what is to come and begin preparing for it. Make decisions using data, evidence, and intuition so you’re not surprised to see a rise in titles like Chief Metaverse Officer, Chief Automation Officer, or Chief Cohesion Officer.
• Create purpose and demonstrate responsibility. ESG is here to stay, and every member of the leadership team should have a solid grasp on the organsiation’s stance on various issues. Which causes matter most to your customers and stakeholders, and what is the C-suite doing about it? How do the organisation’s activities align with the values and visions it claims to represent? C-suite executives are in the spotlight and therefore need to walk the talk.
• Be self-aware. Of course, this scrutiny extends beyond just ESG issues. How you carry yourself day to day will impact how the rest of the C-suite perceive you, whether your team will be willing to buy into your vision, and the level of trust the board, shareholders, and investors are willing to put into you as a leader. There is a lot of value to be found in taking the time to reflect on your own individual impact in the grand scheme of things. Where are you delivering the most value, and which areas require work? No one is 100% perfect all of the time. Seek out feedback from your team and peers and be willing to reflect and adapt. Enlist the help of a career coach who can provide specialised executive career advice as needed. The organisation will improve when you perform at your best.

Rialto is at the forefront of providing insights on both individual and organisation transformational change. Our focus includes supporting senior executives to make game changing career moves. Over 6,000 professionals globally have successfully made senior level moves globally over the last 11 years.

As the business landscape continues to shift and evolve, many executives may be feeling uncertain about their futures. In the face of widespread insolvencies, profit warnings, and restructuring plans, it’s more important than ever to seek out strong executive career advice to ensure that you’re prepared for any potential disruptions in your career path. With so many factors at play, from global supply chain disruptions to changing consumer behaviors, it’s critical to have a solid strategy in place to navigate these uncertain times and come out on top.

In moments like these, the focus often shifts to the business, with leaders needing to make careful and difficult decisions on whether to adjust structures that might be undermining growth or change strategic direction towards some form of transformation. This may require reworking practices, introducing new technology and new operating models, rethinking customer segmentation, geography, making challenging staffing decisions, re-evaluating and redirecting investments, or a combination of these. Clearly, the primary objective is to safeguard the future of the business.

But when these moments strike, how do executives demonstrate value and the impact they can make? How can you become an integral part of a solution driving growth and setting the organisation up for continued success? Read on for our experts’ top executive career advice for navigating a restructuring.

Stepping Up

When the business takes centre stage during times of turmoil, the focus is usually on the collective rather than the individual. No one is going to automatically push you up the ladder or carve out routes to progression for you. Promotions and pay rises are not guaranteed. The responsibility of managing your career has to be completely your own.

This can feel equally daunting and liberating. It also presents a choice. You can choose to become complacent and let the future happen, or you can seize control of your own destiny. Only by having a clear plan that puts your career into your own hands carving out the right opportunities for yourself do you give yourself the best opportunity to progress.

Being able to take initiative and inspired action whilst adding value and driving results will become critical. Restructuring challenges senior leaders to either step up or step aside. Rather than bowing out and accepting the latter option, most will look to take their career and their skills to that next level, whatever it might be.

Mindsets and Skills for Success

In the evolving environment, our experts’ executive career advice is to consider setting yourself standards to make game changing, transformational career moves. It is important to think both internally and externally about your value and impact.

What can be done from within to make an impact? What external factors may be holding the business back, or influencing the conditions in which it operates? You must understand which challenges lie on both sides and how you should be equipped to help overcome them.

• Confidence, Communication, and Conviction: If you have ideas about how you can help the business progress where it’s clear a restructure is needed, now is the time to speak up. Do not be afraid to put your ideas forward and become part of a solution. Do not assume that others have noticed the same things you have. You need to be willing to be the person who points out flaws in the ‘as is’ status quo and who does not let complacency and comfort overrule progress. Some executives may feel they lack internal support during a change when the focus is solely on keeping the business on course, so they must therefore be willing to back themselves and become their own greatest advocate. That said, volatile times often create high stress and pressured environments where miscommunication may occur. The clarity and delivery of your ideas is just as important as the confidence with which you present them. Because of the pressures involved, you may need to navigate a wide range of emotions with the leadership team and stakeholders.
• Relationship Management: It is crucial to have a united front on the inside of the organisation. Alignment amongst team members is key to delivering transformation. Global research continues to demonstrate that most transformations fail because stakeholders are not aligned. Understandably, it may feel like ‘every man for themself’ as economic and operational uncertainties lead to stress and reflection. For leaders, it is important to gain an understanding of what your team’s personal priorities are in order to effectively influence them to buy into your organisation’s change and growth objectives. You need to get comfortable with wearing various hats simultaneously playing different roles with different people. With the board and C Suite, you may need to become an advocate for your team or an advisor. For your team, you should provide a stabilising force. With clients/customers, you offer a much-needed resource. As situations evolve, you will need to navigate these various relationships with tact, empathy, and sensitivity.
• Agility and Future Focus: We can expect some of the current volatility in market dynamics to stay for a while, which will require a willingness to adapt accordingly. Once today’s challenges subside, new ones will spring up in their place. It is likely that we will see an endless cycle of disruption that ebbs and flows, and senior executives must be ready to evolve and lead. That means developing the ability to adapt in real time while also looking ahead. We know current threats such as climate change and digitisation will remain for the long term, so it’s best to embrace them now. But it is not just our challenges that will change. We have already seen shifts with hybrid working, and our working models will continue to evolve. Expect to see rigidity and hierarchical structures challenged by these dynamics for more fluid ways of working that favour project-based and people centred leadership styles for maximum adaptability. Restructuring offers an ideal opportunity to adopt new practices that improve the business’s efficiency and profitability, so it is better to embrace agility now to set the organisation up for future flexibility.
• Customer Centricity: If you are not also considering how these changes will impact your customers, then the battle is lost before it has even begun. Every challenge your business faces trickles down to your customer through the products and services you are able—or unable—to offer successfully. Your customers must be at the very core of all the efforts that spring up from a restructure. Their needs should underlie every idea you propose. They should be at the core of all strategic conversations and inform any changes you make to your practices. The aim of a restructure is to make the business as efficient as possible and increase its profitability. It is ultimately your customers who will be impacted by these changes, and whose activities will make or break your efforts. Keeping their needs front of mind is non-negotiable.
• Digital Capabilities: Digital will underscore all of this. Digital transformation has accelerated and is increasingly critical for survival. Understanding the new tools in the market and having the capabilities to use them will be highly valuable. You may be tasked with adopting these tools in your role, introducing them to your team, or implementing them into your new, restructure-driven strategy. Fundamentally, digital capabilities are becoming much more imperative for current and future business success as most Boards will invest more in this area in the future.

With so many moving parts in the wider external market and within your own internal business landscape, making time to step up, take control of your career, and drive impact may feel a bit daunting. But if you don’t, then who will? Having command over your next move and honing the right skills will enable you to become an asset for business transformation and success and will demonstrate your continued value as business dynamics evolve and organisations transition from one phase to the next. Be willing to back yourself and put your ideas forward, because you just might have exactly the solution that a business needs to charge ahead.

Many of us take time during the summer to have some much needed downtime, to regroup, recharge, and come back healthier, happier, and more focused on what we’d like to achieve both personally and professionally during the last leg of 2022.

With increased talks of an impending recession, profit warnings up by 66% as compared to the same period last year and supply chain and cost stresses continuing to bite, naturally there may be more questions than normal about what lies ahead. Leaders will likely need to continuously adapt their thinking in order to navigate a future successful path for both themselves, their teams and their businesses.

Resilience will be a key attribute which differentiates those teams that will thrive in an increasingly  difficult environment. It will come down to their ability to flex and adapt, to make the most of opportunity, and to mitigate risk. Successful teams and their leaders will be able read changes in the market, take prompt action, and make informed decisions to adapt business models. Being able to spot problems quickly, being able to absorb the hit, and still being able to get up and go again will be essential for future success.

If you haven’t had time for reflection, here are some useful questions to dwell on to help you build that resilience and prepare for what may lie ahead.

What are we doing well? What needs improvement?

Typically, leadership teams begin brainstorming their goals for the following year during Q3 and Q4, so now is the perfect time to take stock of your business’s, your team’s, and your own strengths and weaknesses. Be honest and critical so that you can strive for actual measurable improvement and spend the final portion of the year ironing out any flaws. That way, when the time comes to move into the new year, you will be better placed to proceed with agility instead of getting caught up with troubleshooting.

What will a recession mean for businesses?  Are we ready for it? What can we control?

A recession has been looming for a while now, and it’s only a matter of time before it hits. If our friends across the Atlantic offer any indication, this will happen sooner rather than later. According to a recent Goldman Sachs prediction the UK will go into recession by the end of 2022 and will keep contracting in 2023.  It also predicts that the UK economy will contract by 0.6% in 2023.  We have all become well acquainted with disruption—especially over the past two and a half years—so this recession will be the latest in a long string of challenges businesses and executives have faced. But if being blindsided by the pandemic taught us anything, it’s that there is value in scenario planning ahead of time.

Businesses still have time to adapt their strategy to soften the blows a recession might bring. Difficult decisions will be made, and tough conversations will undoubtedly be had. Preparing for the latter in advance can help to ensure they go as smoothly as possible. This blog can offer some advice for navigating these discussions successfully.

What skills will be most valuable for senior executives while finishing out this year?

For executives looking to make things happen for both themselves and their teams, it is important to appreciate a different approach to the prevailing market will be needed. Knowing how to present your leadership value and focusing on strengthening your personal digital brand is increasingly critical in a digital world.  Hopefully as part of your summer reset you were able to assess your goals and set a few actions towards achieving both your teams but also your own personal career development. Our coaches recommend taking a holistic approach to deliver a game changing career move and not just a quick change for the sake of something different.

Keeping a focus on skills is crucial for staying relevant in the marketplace and navigating any difficulties that lie ahead. Based on what we’re seeing now, it’s safe to assume that understanding the technological landscape across your market will continue to be valuable, as will what have traditionally been known as ‘soft skills.’ This includes capabilities such as communication, creativity, and empathy. All of these will likely come into play as we continue to navigate ongoing challenges with talent, face difficult decisions, and rethink our approaches to upcoming disruption.

Developing resilience doesn’t happen overnight. Leaders need to be willing to take time out to reassess and flex as needed. The next few months may be understandably rocky, but taking the time now to plan ahead and evolve your thinking will prove beneficial in the long run. You had a nice reset this summer, but now it’s time to channel that energy into finishing the year on a strong note.

If you’d like our team’s help in building a game changing team, enhancing your leadership capabilities and driving greater impact within your organisation, get in touch with us about our Leadership Development services.

With ongoing disruption in the marketplace, many businesses and their leadership are facing pressures to continue delivering results amid financial challenges whilst likely having to make hard executive outplacement decisions and handling difficult conversations with their people.

If the businesses that we have widely viewed as recession-proof or too promising to fail are struggling, you would be naïve to think that your own organisation will not face some tough decisions moving forward. The pandemic was the first domino tipped in what is likely to be a series of economic peaks and valleys over the coming years. With that in mind, it is no longer a matter of if tough financial periods will come to pass, but rather a matter of how to properly navigate these situations with your people as they arise. It is likely that leaders will be having difficult conversations more often, and there is real value in learning how to master this type of communication. So, how do you do it? What do you need to consider?

Types of Difficult Conversations

In the current climate, the top challenging conversations that our clients are finding their leaders need most support with are:

• Informing an employee that their performance is not at the right level: Turbulent times are the most inopportune moments for performance to slip, though this may happen as the personal impacts of financial strain and the stress to deliver weigh on your employees. Other times, an employee’s performance might be good, but has the potential to be great. In a time of disruption, you need all team members performing at their very best and as a result, you may have to have some difficult conversations about performance. These conversations may not just involve your junior or mid-level staff. Often, peers or individuals in senior roles may also not be performing at the necessary level as businesses aim to evolve and grow, which requires them to change their style or upskill to keep up. The pressure will certainly be on for senior roles in a position of responsibility in an economic crisis, and there is no room for complacency.
• Informing an employee their role is at risk: Letting an employee know that their role is at risk can induce anxiety for both the person receiving the message and the one delivering it. Honesty is always the best policy when communicating with your people, but you need to decide what level of information to share to avoid causing more harm than good. On one hand, the news may instill necessary pressure to perform at a higher level. On the other, the employee may shut down under the stress. These conversations can go either way and vary by employee, so it’s important to anticipate and plan in advance.
• Confirming to an employee that their role has been made redundant: This is the conversation that no employee or manager wants to have. Letting someone go is one of the most difficult people decisions a leader will have to make, and the situation becomes much more heightened when there are financial stressors at play. Your reasons may be business performance based or financially focused, yet neither will come as much consolation to whoever you must let go. Executive outplacement conversations are the most challenging to master and require the highest levels of empathy and consideration.
• Informing an employee that they aren’t getting a salary increase, bonus or a promotion: Being made redundant is a tough blow to bear but having one’s career progression halted can be just as upsetting. In most organisational structures, hard work and loyalty tend to yield reward in the form of financial compensation, a new role, or both. Not receiving these expected incentives as a form of recognition might feel like a bit of a slight to the employee and can negatively impact morale and individual contributions.

A Checklist for Handling Difficult Conversations

Businesses appoint individuals to positions of leadership to provide their people with trustworthy figures to lean on in times of trouble and to embody organisational purpose. Effective leadership is increasingly difficult to deliver and comes with a lot of responsibility.  A number of leaders don’t receive adequate support to deal with change during turbulent times, and therefore may not feel practically or emotionally ready to deal with these challenges when the moment comes.

So how can leaders prepare themselves for these challenging conversations, and successfully deliver sensitive news?

• Don’t close the gates of communication: It can be tempting to shy away and communicate less frequently and less openly in situations where the leadership team lacks clarity, as the feeling is often to wait until there’s more certainty to share. Avoiding the situation often makes it worse, builds resentment, and can damage the credibility of the leadership team. If anything, your people need to hear from their leaders more frequently during these times, even if it’s just to say that that situation is being addressed and more information will be shared as it is gained. Clear, regular, and transparent team communication are more important than ever, no matter how ambiguous the situation.
• Plan out the conversation in advance: Oftentimes, the hardest part of having a difficult conversation is knowing where to start. Therefore, it is usually helpful to decide on your objectives for the meeting in advance, list the main topics you wish to cover, and indicate how you want to connect them all together. You do not need to script the entire conversation beforehand, but it might be helpful to keep a mental list of a few specific messages that you want to convey. Determine how you are going to open the conversation and rehearse to build your comfort levels.
• Understand the three levels of processing: When planning your discussion, understand that there are potentially three levels of processing all taking place within this singular conversation. The first is the Factual Level, or the basic facts of what’s happening. The next is the Emotional Level, which is how the employee feels about the news being delivered. The final level is the Identity Level. This is often the most complex and tricky level to navigate as it involves what the employee feels the topics of this conversation say about them as a person. Being let go or told that one’s performance is not meeting an expected level can feel very personal. By understanding that these three levels of processing will be happening simultaneously and working to anticipate what points you may need to make at each level will enable you to be much better prepared.
• Be empathetic but remain emotionally steady: While you do need to maintain your professionalism to keep on track during these conversations, it’s normal to have some uneasy or sad feelings about having to deliver tough messages. At the end of the day, we’re all human. You need to acknowledge what you are feeling within yourself, but do not allow these emotions to lead to stress responses, frustration, rumours, or other non-productive behaviour. Team members are always watching and taking their cues from their leaders. While it’s okay to let that vulnerability shine through in the form of empathy and understanding, how you show up in times of crisis matters to your people. As a leader, you’re not required to be unapproachable or unfeeling, but you do need to keep collected. Your people need leaders who seem calm in the face of chaos to provide reassurance and stability. Let the recipient of your bad news know that what they feel is okay and that while you empathise with them, as a leader you have a commitment to remain emotionally steady for the rest of your team. Your ability to remain collected in these tough moments will be of benefit to those who will be looking at you for cues.
• Anticipate the hardest parts: If starting the conversation is the hardest part, then finishing it is a close second place. What will you say to bring the meeting to a close? How will you manage if the person is still upset? You may choose to open the discussion up for questions to give the employee a chance to share their perspective or gain closure. If holding a conversation about performance or a role being at risk, it might be beneficial to end by agreeing some actions. What can the employee do to improve their standing? What outcomes will you be looking for post-meeting, and by when? If letting an employee go, you may choose to acknowledge their hard work and contribution whilst recognising the emotions they’ve expressed. Where internal or external support such as career transition or outplacement services are available, discuss the benefits of this support and next steps. The objective is to end on as positive a note as possible, even if spirits are low. In the best-case scenario, your message will be accepted and the conversation will close with a level of understanding. But it’s also important to prepare for the worst. Emotions may run high, and the employee may react poorly. Anticipate any feelings of anger, shame, anxiety, or sadness and determine how you might react to those emotions. By preparing for the best- and worst-case scenarios, you’ll be ready for anything in between.

Success in a leadership role involves being calm, open, and steady, all while painting a clear vision for the future. The expectation is that you will treat everyone fairly and equitably and hold individuals accountable when they cross a line or aren’t delivering what’s needed for the team to come out on top. This can be difficult to do when economic stressors are weighing on you, the business, and your people.

Difficult decisions and challenging conversations come with the territory of modern leadership, and our current economic conditions will mean having to do so more often. Remember that you are the steady rock for your people in these times, but you are also still human. Check in with yourself, be clear on your objectives and outcomes, and prepare for every possible scenario to approach these situations as successfully as possible.

Each March, organisations populate social feeds with praise for their female colleagues in celebration of Women’s History Month and International Women’s Day. While a nice gesture and a much-deserved celebration of women’s success, in many cases it can highlight the ongoing challenges that female professionals experience all year long.

Our Rialto Executive Career Coaches work closely with some of the world’s most accomplished, successful, motivated, and qualified female executives to advance their careers. Despite their acclaim, achievements, education, accolades, and positions, many of these women express feelings of an ever-present glass ceiling above them and limiting how far they can climb and what they can accomplish. But where do these feelings stem from, what limitations construct that ‘ceiling,’ and how can women break through?

A Seat at the Table?

It’s no secret that diversity is one of the biggest issues businesses face. In February 2022, the UK Government published data that revealed that the FTSE 100, 250 and 350 all improved the number of women in leadership roles in 2021. 39.1% of UK FTSE 100 board positions are now held by women, a massive increase from 12.5% just 10 years ago. This increase has allowed the UK to leapfrog over countries such as Norway, which has mandatory representation quotas, to become second in the international rankings for board representation. There are over 700 more women in leadership roles in the FTSE 350, and the number of women in Chair roles rose to 48, up from 39 in 2020.

While these statistics show that we are moving in the right direction, when examined closer it becomes clear that we still have a long way to go. While 39.1% of FTSE 100 board positions are now held by women, there are only eight female chief executives in that group and no women of colour. When you expand the field to the FTSE 250 where many more board roles are available, you might expect representation to be higher as well. Yet, women in boardroom roles for the top 250 companies is lower that the FTSE 100 at just 36.8%. In the FTSE 350, a reported 72 companies are still below the previously set 33% target for women on boards. Overall, only 1 in 3 leadership roles and around 25% of all executive committee roles are held by women.

How Much Are Women Earning?

When examining compensation, the chasm between genders deepens. According to the latest ONS report at the time of publication, in 2021, the gender pay gap among full-time employees was 7.9%, up from 7.0% in 2020 but still lower than it was pre-pandemic at 9% in 2019. The largest closing of gender pay gap between now and before the pandemic was found among managers, directors, and senior officials, showing that female executives are beginning to become more fairly compensated but are still not paid as equals. It would appear that there is a long way to go in order to close this gap, as the ONS data indicates that the largest gender disparity is among the highest earners with the 90th percentile of full-time men’s earnings sitting at an astounding 16.1% higher than those of females in the 90th percentile.

The gender pay gap often varies wildly at the individual company level, as was evidenced on International Women’s Day 2022 when a Twitter account called ‘Gender Pay Gap Bot’ (@PayGapApp) spent the day retweeting UK companies’ #IWD22 messages with their median hourly pay gaps.

Over 100 companies were retweeted on the day across sectors such as government, higher education, sport, healthcare, professional services, retail, and more. Some of the figures were pleasantly surprising. Both IT company Infosys and the UK House of Commons were revealed to have gaps of less than 1%, with several other organisations paying their female staff equally or higher than their male counterparts. Among the highest paid are the women of Barnet Council who are paid an impressive 25.5% higher median hourly wage than their male colleagues and broadband company Hyperoptic whose female staff earn more than double at 55.8%. However, the bot revealed more bad than good, highlighting huge gaps for organisations such as McKinsey (22.3%), Sheffield Wednesday Football Club (41%), Refuge Charity (32%), the Daily Express newspaper (22.5%), Loughborough University (23.2%), the UK’s Intellectual Property Office (30%), and most hypocritically, women’s lingerie brand Boux Avenue (31.4%).

The hourly wage gap is only part of the challenge that female professionals face with compensation. Having to choose between family and professional success is an unfortunate decision that many women end up facing at some point in their careers. As men move up the pay ladder, women fall behind by either staying in lower paid positions, reducing their hours, or both to take on the responsibilities of raising their families while others will choose to drop out of work entirely.

According to recent market research, nearly six out of 10 women (58%) say caring responsibilities have stopped them applying for promotion or a new job and one in five (19%) have left a job because it was too hard to balance work and care. Over time, this imbalance of familial obligations has led to more men in senior roles and some very damaging mindsets. At the core of the issue is a longstanding assumption that senior roles inherently require long hours and constant availability, and thus cannot be done flexibly or part-time. Academic research into the matter has found that long working hours have been proven to be inherently gendered and to exacerbate the gender pay gap. Over time, these mindsets have led some women to believe that they need to sacrifice one in favour of the other and have created biases in employers that female executives may not be ‘up for the job.’ Both of these beliefs are untrue.

Breaking Through the Glass Ceiling

Representation and imbalanced compensation are two of the most apparent and most widely addressed issues surrounding women in the workplace, but any female professional can attest that it is so much more than that. We asked our Rialto Executive Career Coaches which challenges they often see expressed by their female coaching clients, and for their career advice for overcoming these hurdles. Here is what they had to share:

• Speak Up: Due to the aforementioned lack in representation, female executives often find themselves in the company of people who are not like them. Often, this can lead to feelings of imposter syndrome, and may discourage some female executives from speaking their minds. Historical ideas of ‘femininity’ have conditioned us to believe that women who take charge, freely speak their opinions, and essentially behave in the same way as their male counterparts are viewed as off putting, bossy, cold, calculated, or worse. These are damaging societal ideas that we are progressing away from but have yet to fully overcome. For male executives, before you judge your female counterparts for speaking up, our advice is to consider whether you would ever think twice about doing the same. For female executives, our advice is to remember that you were hired for your role because of what you have to offer. By keeping your ideas to yourself or not speaking up when something is off, you are doing yourself, your position, your organisation, and your stakeholders a disservice. We know that telling you to ‘speak up’ is sometimes easier said than done, but just remember that that is what you are there to do. Standing in your power does not make you aggressive, pushy, loud, or rude. It just makes you good at your job!
• Build Alliances Carefully: Getting your voice heard is much easier when you have the right support in your corner. But again, women are often surrounded by people who don’t look, think, or act like them. Much has been said about the idea of ‘women supporting women,’ but men need to do the same. Unfortunately, there are some people whose biases run too deep and too stubborn to be swayed, but you’ll find that not everyone is working against you. Instead of wasting time trying to change minds that are unwilling to budge, choose your allies wisely and try to find strength in numbers instead. It’s a sad truth, but some people may be more open to hearing the same idea in a different voice. At the end of the day, the best interest of the organisation needs to come first and biases should not get in the way with that. You’ll find peers who agree and who will back you, helping to get your voice heard all the way through the top of the organisation. You are better off spending your time building and strengthening relationships with these individuals than you are trying to get through to someone who seems unwilling to really listen.
• Don’t Undersell Yourself: If you are putting in the same amount of work at the same level as your male counterparts, then there is absolutely no reason why you should be paid any less. Historically, asking your peers about their salaries has been considered ‘impolite’ or taboo, but there is really nothing wrong with doing so. Having these conversations is the best way to benchmark and to create transparency about whether or not the team is being fairly compensated. Ask the question. You’ll often find that your colleagues are happy to share their figures with you, and those who aren’t will decline and that’s that. Knowing what you could be earning within your same organisation, level, or department compared to what you actually are earning helps provide you with leverage for negotiation. Do not be afraid to ask for what you deserve. If others at your level are being paid higher, it’s often not because they were more qualified or were offered that. It’s often the case that they were simply more willing to ask for it or negotiated after receiving an initial offer. Our advice is to research the market. Use sites like Glassdoor to benchmark what others in your role earn in your city. Take all of these figures with you into salary or raise discussions. Know your number, and don’t back down. If you present these figures to your employer and they are unwilling to close the gap, do not be afraid to move on to a company that will value your work and compensate you appropriately. Women are often told that our contributions, skills, knowledge, and experience are ‘invaluable,’ but that praise isn’t quite enough. All of those factors combine to create a monetary value for the organisation, so why shouldn’t they create monetary value for you? Put a price on your skills and contributions, and do not sell yourself short.
• Set Boundaries: Women have often been the ones to sacrifice for the sake of family, but that doesn’t have to be the case. If the pandemic taught us anything, it is how to achieve better balance. The pandemic’s enforced remote work helped to challenge the misconception that senior executive roles cannot be done flexibly, and hopefully hybrid working becoming the norm will help to support this even further. Hybrid and flexible working models have made it much easier for working parents to be present for their children. This applies to both male and female caregivers, which in turn has helped the responsibilities of childminding become more balanced. However, women are finding it easier now to be both parents and professionals in these models as they do not require a choice between the two. Hybrid is also helping professionals draw clearer lines between their working and home lives and better manage both. This new era of work will likely see professionals regardless of gender setting higher standards and demanding more from their working life. It is essential that female executives determine what their non-negotiables are and stick to them. If flexible working models mean not having to sacrifice, then push for that. Now that we know most of our jobs can be done from anywhere, there is no reason to sideline oneself for the sake of having a family. If your current employer is not willing to work with you on that, perhaps it is time to find one who will. You are not asking for ‘too much’ by having boundaries and not settling. You’re simply commanding the respect you deserve as both a professional and a person with a life outside of their career.

For any real change to happen it’s not just women who need to speak up, demand more, set boundaries, or work together. Male executives, especially those with influence on personnel decisions, need to look inwards to challenge their own biases and assess how those beliefs and opinions might be impacting their decision making. Employers need to actively promote diversity and equality in their organisations rather than just talking about it. We can all do better to be more empathetic, to challenge what we see happening around us, and to speak in support of those we feel are being treated unfairly. The longer we continue to let the ‘status quo’ continue simply because it might not be effecting us directly, the thicker and thicker that glass ceiling gets and the harder it is to break through. Change starts and ends with us all.

At Rialto, we often stress the importance of artificial intelligence (AI) for the future of business. We published a white paper on the digital imperative, discussed how to navigate your career through technological change, outlined strategic priorities for leadership, made predictions for AI’s role post-pandemic, and highlighted some of the ways that AI can help with leader’s people management challenges. This technology has impossibly vast potential that is finally coming into mainstream acceptance, meaning that innovation is happening at a rapid pace with changes happening frequently.

There are a number of forward-thinking leaders who got on board early and are now exploring more advanced applications of AI, but the majority of global business leaders are just beginning on their journeys. In this article, we aim to bring leaders up to date with the state of AI as of Q1 2022, and put this into context in terms of what may be expected of their role during the adoption journey of AI in transforming business models.

The Current State of AI

AI adoption has only continued to grow in the past year, with more businesses and their decision makers coming to grips with this technology. In McKinsey’s latest State of AI survey, 56% of all respondents reported AI adoption in at least one function of their business, which is an increase of 6% from the 2020 survey. Gartner’s Second Annual Emerging Technology Product Leader Survey found that the majority of respondents (87%) predict industry-wide funding for AI will increase at a “moderate to fast pace” throughout 2022. Their survey also found that a third of global organisations with plans to adopt AI intend to invest $1 million or more into the technology over the next two years.

Zooming in on the UK, it seems as though businesses of all sizes are betting on tech for their recovery and growth efforts. The Department for Digital, Culture, Media & Sport (DCMS) recently published a report on the current and future use of artificial intelligence by UK businesses, which found that around 15% (432,000) of all UK businesses have adopted at least one AI technology, while around 2% (62,000) are currently piloting AI and a further 10% (292,000) plan to adopt at least one AI technology in the future. 68% of large companies, 34% of medium sized companies, and 15% of small companies have adopted at least one AI technology.

IT and telecommunications (29.5%) and legal (29.2%) currently have the highest rate of adoption, while hospitality (11.9%), health (11.5%), and retail (11.5%) represent the lowest adoption rates in the UK. In terms of actual use cases, the DCMS report found that AI solutions for data management and analysis are the most commonly adopted with 9% of UK firms having adopted them. This is followed by natural language processing and generation (8%), machine learning (7%), AI hardware (5%), computer vision and image processing and generation (5%) tools. Looking ahead, the DCMS report predicts that expenditure on AI technologies could increase to between £27.2 billion and £35.6 billion by 2025. By 2040, that figure could increase to between £50.4 billion and £127 billion.

This reaffirms what we already know: AI is inevitably the future of business and the majority of leaders will need to become more confident in utilising AI. The increase in adoption rates indicate that the resistance to transformation is dwindling as many of the hold outs enter the exploration phase and the more forward-thinking businesses transition to application or explore further AI projects. For transformation projects to be successful, there needs to be buy in and involvement at every level and department. Whether your organisation is just embarking on its AI journey or looking ahead at what other problems this technology can solve, there will certainly be impacts on your specific role and function.

The Role of Senior Leadership

CEOs

The role of the CEO or top executive of the organisation is that of both decision-maker and champion. These executives are tasked with delivering results to various stakeholder groups, while also serving as the public face of the business. The two entities are so deeply intertwined that the failures of the organisation are often considered to be the failures of the CEO in the court of public opinion. Plotting, strategising, and delivering a change project is a massive undertaking and a huge responsibility for the CEO. Getting it right will ensure happy stakeholders and customers, but getting it wrong could have major career consequences.

Of course, any transformation plans should come from the board as a whole, but it is often the CEO who has the final say. Typically, they are also the ones responsible for selecting which tools to adopt, sometimes with input from the CTO or other knowledgeable parties. However, not every organisation has a tech expert on hand to advise, and CEO or top exec might have to go it alone. Therefore, it is essential that these leaders have a strong understanding of AI and its capabilities so that they may make informed decisions about the future of their organisation. Continuous learning and upskilling will be valuable to professionals in all functions, but for top leaders especially. Seeking out training, keeping up to date with the news, or pursuing a proper course on AI can make a massive difference. The most successful leaders are those who realise the world is changing around them and work to change with it.

But arguably more important is the CEO’s role as a champion of change. Wherein staff in the organisation will need to adapt to working alongside these tools, the CEO is not likely to see their role massively reshaped by AI. Instead, top leaders will need to focus on getting the rest of the team on board and encouraging a willingness to give this technology a try. Change is uncomfortable, and there will likely be staff who resist the introduction of new tools. The team will be looking to their leadership for guidance and reassurance, and the CEO is about as senior as it gets. Your people will be looking to the top in order to assess the legitimacy of these new mandates. Does it seem like you truly believe in what you are saying? Are your words telling one story, but your actions telling another? Top executives need to lead by example. If you want your people to buy into new initiatives, then you yourself need to practice what you preach and truly understand what you are asking for.

The Rest of the C-Suite

The rest of the C-Suite serve as the top representatives for each of the business’s various functions, including Marketing, Finance, Operations, Technology, Sales, Growth, and so on. Individually, these executives are responsible for their individual departments and all the staff and activities that fall under their domain. Collectively, these leaders must unite these individual pieces to work towards the best interests of the business. If the sum of its parts is successful, then the senior leadership team could be considered successful as a result.

At this level, you may find yourself less concerned with the day-to-day use of automation tools in your role and more focused on the ‘why’ of it all. It will be your responsibility to determine what role technology will play in your function, give input into the tools that will be introduced, and help to form a business case for adoption and transformation. But more important than that, your role will be to champion and to help shift the rest of the organisation towards an AI mindset. While the CEO may serve as the main spokesperson for your company’s transformation efforts, it will fall on you as a top-level executive to reinforce that message within your division of the company. It is crucial for the senior leadership team to present a united front when it comes to change management. That way, the message is clear and reinforced. Communicate clear expectations with your team so that there is an unimpeachable understanding of roles and responsibilities. Depending on the structure of your organisation, you may choose to funnel this message down via your managers, but your stance as the head of your department should never be in question. Help form the plans and stick by them once they are introduced. Otherwise, you risk losing all confidence from your team and your project may be doomed before it even has a chance to begin.

HR Director

When undergoing a transformation project, ‘people costs’ need to be factored in alongside the costs of the technology itself. According to the DCMS report mentioned previously, the 432,000 UK companies who had already adopted AI in 2020 spent a total of £46.0 billion on labour associated with the development, operation, or maintenance of those technologies. The average labour spend was £24,400 per small business, £1.7 million per medium business and £3.1 million per large business. This overall expenditure is predicted to increase to between £80.2 billion and £103.2 billion by 2025, and between £185.2 billion and £456.0 billion by 2040.

HR Directors (HRDs) will likely be the ones tasked with managing this expenditure, whether it be via onboarding new talent or upskilling existing staff. When adding talent to the team, it will be essential to look for baseline technological skills, but attention should also be paid to the types of capabilities that technology cannot match in order to create a well-rounded team. These are what we typically consider to be ‘soft skills’ such as communication, creativity, strategy, and so on. If adding new talent to the team is too costly, investing in the people you have is a strong option. Upskilling initiatives will likely fall under HR’s domain

Beyond ensuring the right talent and skills are on hand to cope with new technologies, AI tools can also be used to help facilitate a lot of these processes. AI can help to automate some tedious activities that eat up time for HRDs. For example, AI can help with document verification and data entry, scheduling staff, managing leave, setting up meetings and appointments and automating communication with prospects and current staff. Automation can be introduced to various stages of the recruitment process to streamline the experience for the candidate and save time for the HR team. But further than that, AI can help with a major challenge HRDs currently face: retaining their staff in the wake of the Great Resignation.

AI can be leveraged here to gain insight into the mindsets of current staff. How satisfied are your people? What has motivated them to stay, or what is driving them to leave? AI can help provide answers to these tough questions, and also provide insight into the needs and desires of the market. Often, these tools can signal HRDs to potential problems before it’s too late, allowing them to potentially intervene and retain. Investing in existing talent is a draw for people to stay, and HR will likely be tasked with leading any upskilling or retraining initiatives for current staff. E-learning platforms can help support these training efforts by tailoring the materials to suit individual needs, helping to ensure that staff are grasping the information and that HR’s training budget has been used effectively. While the directive for upskilling may come from higher up in the organisation, HRDs should expect to be the ones the board turns to in order to help figure out the logistics and oversee the process. It is recommended that anyone in this position take the time to learn about some of the tools available in preparation.

Artificial Intelligence is one of the greatest technological advancements of our lifetime, and its impacts will be felt across industries and job functions. However, AI is here to assist and augment, not replace and make redundant. This technology can achieve remarkable things, but not without the assistance of human intelligence. These projects will only be as successful as the teams driving them.

After coming to grips with the idea that AI is something you need to explore, we recommend focusing on building your skills and understanding. Knowing that AI is important and actually believing in its potential and the benefits it can bring to your business are two very different things. Your mindset can make or break you when it comes to delivering change, regardless of your role in the organisation. As a senior executive, you need to ensure you buy into what you are looking to achieve before you can ever expect your team to buy in. You need to walk the talk if you want your people to follow.