CEO Insights for What's Ahead | 10.19.22
The Conference Board?Measure of CEO Confidence??fell to 32 to start Q4 2022, down from 34 in Q3. (A reading below 50 reflects more negative than positive responses.) That’s the deepest level of pessimism our quarterly CEO survey has found since the nadir of the Great Recession in 2008-9.
By the numbers:
On the bright side:?So far, today’s combination of crises appears unlikely to leave the kind of deep, wide, and long-lasting scars like those of the Great Recession. Indeed, 86 percent of CEOs said they expect to maintain or increase capital spending over the next 12 months. Likewise, 44 percent still plan on expanding their workforces, with just 16 percent expecting a net reduction in staff.
Having engaged employees can have a direct impact on business results. But a survey from The Conference Board Human Capital Center found that nearly a third of workers report their level of engagement—the commitment and connection they feel to their work—decreased in the last six months.?
Could the shift to remote work spurred by the pandemic be at fault? The survey says no. Work location—whether on-site, remote, or a hybrid blend of the two—has no impact on self-reported engagement levels.?
But some people do feel decreased engagement more than others: Women, Millennials, and individual contributors report lower levels of engagement than men, older generations, and executives.?
What we’re saying:?“For businesses to truly thrive, they should focus on improving employee engagement, no matter the employee’s work location or schedule,” said Rebecca Ray , PhD, Executive Vice President of Human Capital at The Conference Board. “Especially during challenging times, it is important for leaders to reconnect all workers to the mission and purpose of the organization, as well as to lead with compassion. For workers who are remote or hybrid, this may mean being more intentional about making time for connection.”
Personalizing products, services, and communications has been among the most potent advantages of the digital ecosystem. Using data to understand what people want before they know it themselves and presenting it to them in the most compelling manner possible is the ambition of every marketer. But the space between serving the customer and stalking them is being patrolled more assiduously and legislation is tightening.?
Why it matters:?The practice of personalization can be in the best interests of the customer, making it easier for them to discover what they want with less effort. But 57 percent of US consumers are willing to give up personalized marketing in exchange for not being tracked, while only about a quarter value companies’ use of their personal data for personalization. In addition, more states are introducing data privacy legislation.?
The path forward:?The sweet spot for both the consumer and the marketer is in customizing for customer segments, not bespoke individual personalization. To ensure balance is maintained, corporations should embed privacy into their own policies, maintain the principle of putting the consumer first, more clearly communicate the value of customization, and make opting in easier.
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This November marks one year since the passage of the $1.2 trillion Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law. With the bill still in its early stage, public and private sector leaders have an opportunity to map out a successful rollout to strengthen the nation’s infrastructure and overall competitiveness. For guidance, they can turn to a?Solutions Brief?by the Committee for Economic Development , the public policy center of The Conference Board (CED).?
Why it matters:?In several aspects of infrastructure, the US has fallen decades behind its competitors. The law provides an extraordinary opportunity to strengthen the economy’s productivity, especially in the long run. But what makes carrying out the legislation challenging are factors including inflation and a recession, labor shortages and supply chain challenges, along with permitting issues and other regulatory hurdles.?
The path forward:?The report underscores the need for close collaboration between private sector leaders and public officials at all levels of government. Solutions include addressing regulatory paralysis; setting priorities to prevent delays of at-risk projects; sharing data; improving transparency; and addressing supply chain issues and the labor shortage.
89 percent of participants in a recent Working Group on the Roles of the Board in the Era of ESG and Stakeholder Capitalism said their board has a good understanding of their stockholders’ views. That compares to 56 percent of boards that understand the views of employees, followed by customers (44 percent), and communities (just 15 percent).?
With a majority of participants saying stakeholder capitalism is here to stay, it’s important for boards to understand the perspectives of a broad set of constituencies. Indeed, investors themselves will want boards to know what their employees, customers, and others are thinking.?
The path forward:?Direct engagement is just part of the answer. Public company directors commonly speak directly with major shareholders; they have opportunities to meet formally and informally with employees; and some firms have established community advisory groups that meet with members of management and the board. CEOs should focus on what kinds of?data?the company is collecting on the views of customers, business partners, employees, and others on relevant environmental and social topics—and how to build that into regular reports provided to the board.
QUOTABLE
“The key, though, is investment. And it's not just investment dollars from funds and investors upfront; its investment by end users, its investment by communities. Recognizing that we can't keep solving the same problems over with the same materials, the same solutions. We need to pursue big, disruptive, revolutionary changes in the way that we think and the solutions that we bring to the table.”
—? George H. Kirby CEO of Resilient Structures , in a new episode of?CEO Perspectives. Kirby covers what technologies are needed and what investments should be prioritized to prepare the energy grid for the needs of the future.
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