Business leaders face a near perfect storm in 2023

Economic contraction, war, soaring prices and another Covid variant will impact leadership in new ways.

2023 could prove to be the most challenging year for business leaders in their careers. Yes, Covid-19 pushed many companies to the brink and required leaders throughout the organization to rethink business models, operations, talent retention and more.

Some businesses survived the pandemic, others did not. If your company made it, then now is not the time to be complacent. There is more to come. And, once again employees, shareholders and customers will be looking at you to have the answers in 2023.

“The role of a leader is to define reality and give hope.”

-Ken Chenault, former CEO and chairman, American Express

Let’s start with the reality and why leadership will be challenged on so many fronts before we touch on hope.

Firstly, International Monetary Fund director, Kristalina Georgieva, has warned that as much as one-third of the global economy could face recession – driven by economic contraction in the United States, European Union and China.

Coupled with the war in Ukraine and rising energy costs, as the West tries to isolate Vladimir Putin with crippling sanctions, the cost of living for ordinary citizens globally has been impacted. This has resulted in worldwide anger as food prices soar.

To maintain trust leaders will have to balance profits with the social needs of customers and stakeholders, while also navigating the increasing impact of ESG on business.

Also concerning is the apparent rise of the new Covid strain, XXB 1.5.

During the previous waves of the pandemic the importance of human capital came to the fore.

Companies learned in 2020 that people matter more than ever. Successful companies prioritized employees and focused on employee growth, development and engagement. These valuable lessons remain as important today as they were during the height of the pandemic.

One should also not make the mistake that so-called domestic issues will not have a profound effect on your company, whether it be growing unhappiness of the state of health and transport in the United Kingdom, women’s rights in Iran or the impact of climate change in terms of flooding, wildfires and extreme weather.

In our always-on-ever-tweeting social media age the moral and ethical behavior of companies can impact the bottom line as employees and consumers increasingly demand social justice and equity.

In this perfect storm it may be difficult to see where hope lies and what a better tomorrow might look like.

In a time of crisis the most important commodity is trust.

I believe the difference between leaders will be those who have short-term selfish goals versus those who stand for something and are grounded in core values. This does not mean good leaders have all the answers, but they are able to inspire those around them to act, sacrifice, innovate or collaborate in times of dire need because they stand for something.

Over several decades of working with top global companies I have seen how agile leaders and their teams can unite an organization around its purpose. This requires a diversity of leadership skills as well as people.

Revolutionary ideas can come from anywhere – and the more diverse a company the more minds they have coming together to be solutions orientated, rather than being fixated on the problems because everyone thinks and looks alike.

Leadership has undergone a fundamental shift. The C-Suite command-and-control model is outdated. It has been replaced by leaders who don’t tell employees what to do, but rather inspire action and innovation through purpose.

Our global crises are so interconnected and interdependent we can no longer make it on our own. Collaboration is our only option, as Cisco’s Chief People, Policy and Purpose Officer, Fran Katsoudas, pointed out at a recent Duke CE event.

“There is a belief that you can be good for business, or you can be good for the world; but you just can’t do both.

And here’s the thing – you can.”

-Fran Katsoudas, Chief People, Policy and Purpose Officer, Cisco

Leadership may be tested in 2023 but there is no need to forsake hope. I have seen time and time again how resilient and agile organizations can thrive during times of adversity through a focus on principal, purpose and commitment to our shared humanity.