Business Leaders Face Increasingly Harsh Global Environment

The CEO of any company in the world is under severe pressure. The primary forces the CEO is facing are built directly on the forward-moving nature of business and the sheer number of walls he has to scale as he struggles for transactional relevance in a marketplace.

To understand the causes of worry for CEOs, we have to look at the increasingly diverse challenges that the uncertain global business environment is forcing on his leadership systems.

In any environment, the world is changing so rapidly and with such speed that it can be impossible to keep up.

This fragmentation process of technologies, global competition, and divisions of people is the force behind this rapid change. The only way to keep up with the change process is by diversifying the work structure to be able to embrace and adapt to the current world and see what is coming in the future market.

It is worth looking at a sample of the different types of forces as they break into cellular formations that are causing knock-on effects in multiple environments.

The list is long and each force has additional relations, which sometimes connect to each other and at other times do not. This makes for difficult forecasting as actuaries struggle to make sense of a world that is not one they recognize from their training.

A Hostile Environment

The forces against the CEO are many: finance, currency, recessions, depressions, social change, human capability, emerging technologies, competition from every part of the world, disruptions, increased requirements for performance, ethical standards being reduced, and employees who are being reduced to the next workday as uncertainty forces them to take ever more risky decisions to break themselves out of a perceived downward cycle.

This environment is everywhere, and problems that should be handled by the organizational structure are constantly rising to the top as people try to make heads and tails of the daily appearance of new challenges, which need to be understood and then tackled.

The CEO has to deal with all of these diversified pressures and be held accountable for them at all times. He has to delegate responsibility and accountability to his management, and either put them in positions of management internally or hire outside consultants and management agencies to perform these tasks, all while reducing costs and trying to penetrate new markets to remain relevant in the sales process.

Becoming Obsolete

Yet the CEO’s greatest difficulty is obsolescence. As soon as one issue is dealt with, it is already obsolete—whether this comes in the form of technology, skills, finance, economic issues, pricing, delivery problems, or any other issue with the health of the organization.

This overwhelming force of obsolescence is what is currently powering the changes in the world. Take a look at the military: fighter pilots are becoming obsolete because of the advent of drones and the increasing obsolescence of flight based military systems becoming counterproductive.

This likewise affects every CEO who produces fighter jets as they scramble to sustain a business built on the back of Cold War technological thinking. No matter how much they upgrade the aircraft, pushing even more technology into the existing platform to try to make the existing aircraft even more high performance, it makes no difference.

The primary force that is driving the change is transactional obsolescence. In a world of warfare, obsolescence is the fact that military warfare as defined in the past is completely obsolete and has become counterproductive.

The more you use a tool like the military in counterproductive situations, the worse it is for that particular tool in itself.

Taking a bird’s eye view of the situation, we come to realize that warfare in itself has changed, and this is my point here. When we look at an aircraft manufacturer, we begin on the shop floor by asking, “What’s bothering you?” The next stage is to get to the plant manager and say the same thing, “What’s bothering you?”, and bring it to the next stage up in the business unit, and then to the CEO.

Grasping the Changes

But when all is said and done, it doesn’t rest with the CEO. The real change comes from understanding the environment and accepting that things have changed. Then we can see the simplicity of the truth that guides our decisions.

With the aircraft industry, the question should be, “If warfare has changed, and if the environment has changed whereby these aircraft are increasingly obsolete, becoming irrelevant and counterproductive units, what can we do to remain relevant?”

The issue is always a higher one than we expect, and the questions always go into a historical, philosophical perspective with a deep cyclical underlay involving multiple measurements of the forces of change.

The questions a CEO must be asking may not be hidden in the management section of the organization. The questions the CEO needs to ask are quite obviously on the production line and the delivery process to the customer who may be confused about what he wants.

This is where the CEO finds the truth about his marketplace, and where research and development needs to be directed.