Key questions business leaders need to address

Blair Sheppard - Global Leader Strategy & Leadership, PwC and Peter Bartels Leader, Global Entrepreneurial & Private Business, PwC

However, as they play out, they have also generated a set of urgent, short-term impacts that private business leaders must tackle now. The challenge for private business leaders is working out how to navigate these immediate issues while also staying focused on the ongoing global trends.

This is all complicated by the fact that most business leaders have not experienced many of these issues before. Some – like climate change – are here for the first time. Others, such as inflation, have not arisen for decades. These issues are also more interdependent and more uncertain; they come fast and they involve more stakeholders. To help private business leaders think about how to address these challenges and how to both preserve and create value in this fragile world, we have created a list of five key questions.

How good is our radar for detecting immediate issues while also keeping longer-term imperatives in view?

A good way of illustrating this question is when considering the short term impact of the ‘great resignation’ alongside the long term issue of right-sizing the workforce.

In 2021, we identified workforce planning as a key long term priority. Since then, businesses worldwide have been dealing with the short term impact of widespread resignations and the resulting need to recruit staff. Instead of reacting with a short-term mindset and replacing like with like, now is the time to implement this longer-term workforce planning.

Think ahead to the skills that you will need in the future and start replacing leavers with new hires who have these different skills. Or use it as an opportunity for existing staff to train and learn these new skills on the job.

Who in our business will own issues like environmental, social, and governance (ESG)?

Many private businesses struggle to identify the natural ‘owner’ for dealing with these big issues. Listed companies may have a chief sustainability officer to manage the company’s ESG strategy, or a chief technology officer to oversee technology investment and implementation. However, private businesses may not see the need or have the budget to employ such roles.

Nevertheless, we believe that each of these issues presents an opportunity for different people to take on new leadership responsibilities. For instance, ESG can be an opportunity for the CFO to take the lead. They have experience of setting up systems and processes for monitoring and reporting. They have expertise in managing costs and leading change programmes. They also have the authority needed to drive the change required.

Where will we get the expertise to make smart decisions and address complex issues today?

One of the disadvantages that private businesses may have over listed companies is access to expertise. This raises the question of where to get the expert insight needed to enable smart real-time decisions. We believe that this is a good opportunity to look at the workforce and consider the different ways that skills can be contracted.

Another avenue for sourcing these skills is through the local community. One of the advantages of private businesses is often how embedded they are in the communities in which they operate. Using this network such as local business associations or academic institutions may uncover talent that previously had been unavailable.

Finally, when considering untapped skills within the organisation, consider the next generations for their digital expertise. Often, millennials or Gen Z are digital natives or have learnt various digital skills that are invaluable and could be under-utilised.

How will we ensure tech investments support strong outcomes?

One of the advantages that private businesses have around technology is their license to operate from a long-term perspective. Unlike listed companies, private businesses are not being pushed towards short-term, knee-jerk reactions by stakeholders associated with the public markets.

Private businesses’ ability to take a longer-term view can make it easier for them to invest in technology that supports their longer-term innovation, without having to immediately justify the return.

Where and how will we find the diverse leadership needed to address these challenges?

The leadership styles of the past need to adapt to today’s different demands. We have identified what we call the six paradoxes of leadership. They are not only the paradoxes that leaders face now, but also those that will remain important in the future. When considering the composition of the board or the senior leadership team, private business leaders need to identify their strengths amongst these paradoxes, and then appoint others who can complement them.

For example, one particularly relevant paradox for private firms is that of the “traditioned innovator”. This is someone who can respect the past while deciding what needs to be brought forward into the future. They recognise that innovation does not have to always mean brand new, but should be consistent with and build upon a firm’s history and traditions.