As the cliché goes, the market hates uncertainty. So why are so many experts worried about the future of organizations now that a lot of the clouds surrounding 2020 are fading?
Last week the US election was finally settled and COVID-19 vaccinations slowly made their way through the world. But with those massive unknowns now known, corporate leaders will need to get out of short-term thinking and make quick, substantial progress in setting up their organizations for the future. Not all of the execs may be up to the task. “Last year everyone got a pass. Now people want to know where is the growth,” says Beau Lambert, a Korn Ferry senior client partner and part of the firm’s Financial Officers practice.
Though many didn’t see it that way, the pandemic removed at least one key part of a CEO’s job: long-term strategic planning. It wasn’t necessary to much thought to what the organization would look like in five years when the firm was on track to burn through all of its cash in five weeks.
Indeed, it became common for CEOs to skip making forecasts at earnings calls and to tell stakeholders they had “no idea” about the next 12 months. With crisis management ruling the day, everything from capital investments to new products could be put off. Now leaders have to plan much farther down the horizon, but that may not be easy for many leaders who have been focused on the short term for months. “You’re asking a CEO to conceptualize a new thing. That’s a far more challenging task than to say ‘We need a reduction in workforce,’” says Debra Nunes, a Korn Ferry senior client partner.
Complicating issues is that the pandemic created three types of short-term thinking, says Alan Guarino, vice chair and co-leader of Korn Ferry’s Board & CEO Services practice. Many are focused on the organizations that had to scramble to stay in business. But there are many examples of companies scrambling just to keep up with increased demand for their products and services. “The firms that benefitted significantly, that’s actually a completely different crisis,” Guarino says. A third group of organizations didn’t see their businesses dented much by the pandemic, but the virus upended where and how its employees work.
Many corporate leaders understand they have to adjust how their organizations interact with customers, reform the corporate culture, or even replace its entire business model. “If we don’t change everything now we’re going to be dramatically left behind,” Lambert says. But the question is will the C-suite be able to.
To be sure, with the vaccine rollout behind, a new COVID strain looming, many companies and industries will still have plenty of short-term crisis’ to handle. For some organizations, experts say, it will remain a matter thinking about quarter over quarter or even month over month. Indeed, nearly 70 percent of talent acquisition professionals say they are only planning for short-term hiring needs, according to a new recent Korn Ferry survey. Nearly one third of them say they do not have a post-pandemic talent acquisition plan in place. “What this crisis has shown us is the only thing that will remain constant is change,” says Jeanne MacDonald, global operating executive of Korn Ferry recruitment process outsourcing (RPO) business.