Hazlewoods is a member of HLB, an international network of independent accounting firms and business advisers. HLB surveyed 575 business leaders from 60 countries to understand what they are doing to manage these turbulent times, whilst at the same time preparing their organisations to prosper in the longer term. HLB has now released the results from their 2023 survey of business leaders.
Recent years presented companies with a series of low-probability, high-impact events. Just when we thought the worst of the global crisis was behind us, new difficulties struck and caught most industries at a point of a slow recovery. Russian aggression against Ukraine triggered a global energy crisis, food shortages, climbing inflation and soaring interest rates. Simultaneously, businesses in many industries continued to struggle with talent shortages, trade disruptions and digital-led business transformations.
The 2023 HLB survey found that global businesses now face eight major risks. Over half of respondents now feel concerned about the impacts of inflation, economic uncertainty, geopolitical risks, rising resource costs, rising interest rates, access to talent, exchange rate volatility, and cybersecurity issues.
Which do you consider to be the most concerning risks today?
The silver lining
Amidst the storm, businesses continue to display a promising capacity to maintain a dual focus: on survival and long-term business transformation. In the next 12 months, 67% of the HLB survey respondents are committed to improving operational efficiencies, 48% to reducing operating costs and 45% to adopting new technologies.
The current prognosis by the International Monetary Fund (IMF) puts the global growth slow down at 2.7% in 2023 versus 3.2% in 2022. Yet, business leaders seem to believe in their organisations’ resilience, with 79% being confident about their company’s ability to grow over the next 12 months.
HLB asked business leaders about critical leadership behaviours they will need to ride out these crises, and the top three were flexibility, integrity and accountability.
What do you think are the essential behaviours for successful leadership in times of crises?
Flexibility
It is not a surprise that flexibility was the highest ranked essential behaviour for successful leadership in a crisis. Thriving in this unstable environment will require the ability to simultaneously manage often contrasting activities. Leaders will have to manage what is happening right now and all the risks that come with it, but also remain focused on main goals and long-term strategy.
Integrity
37% of respondents agree that integrity is essential in a crisis. During trying times concerns run high, and leaders have to demonstrate commitment to the right principles, or they risk losing the trust of their staff, customers and stakeholders.
Integrity can take many forms but, in a nutshell, organisations need a clear sense of purpose to guide the organisation, supported by a clearly understood and shared set of values.
Accountability
Today’s society is more connected than ever and, as a result, business activities are more visible. This means that business leaders are being held accountable for their actions and behaviour by company stakeholders beyond investors, shareholders and customers.
Amongst other things, sustainability is under the spotlight. Businesses can no longer escape scrutiny when it comes to their environmental, social and governance (ESG) practices. ESG commitments often get a second priority amidst ongoing market turmoil; however, sustainability and profitability are not mutually exclusive, and a commitment to sustainable practices can help businesses emerge with a more sustainable (and profitable) business model.
Every storm inevitably stops
While the current business landscape is challenging, there will undoubtably be better times ahead.
To emerge stronger after this storm, business leaders must ensure they are flexible, lead with integrity and encourage it across the business, get better at operating in a state of ambiguity and remain focused on their long time strategy, not forgetting to measure and report progress against it.
For international business enquiries, please contact Scott Lawrence on scott.lawrence@hazlewoods.co.uk or 01242 680000.