What Matters to CEOs and CFOs Right Now: Growth, Technology, and Talent
In the fast-evolving landscape of modern business, CEOs and CFOs are united in their focus on three critical priorities: growth, technology, and talent. According to the 2023 Gartner CEO and Senior Business Executive Survey, these elements are at the forefront of strategic planning. Marko Horvat, VP of Research with the finance practice at Gartner, highlights the alignment between CEOs and CFOs in prioritizing these areas. Here’s an in-depth look at why growth, technology, and talent are the top organizational priorities for business leaders today.
1. Growth
Growth remains the central objective for CEOs and CFOs. In an unpredictable economic environment marked by inflation, supply chain disruptions, and global uncertainties, achieving sustainable growth is more challenging yet more critical than ever.
Strategic Expansion: Business leaders are focusing on expanding into new markets and diversifying their product lines. Global expansion and market diversification provide avenues for tapping into new customer bases and mitigating risks associated with dependence on a single market.
Mergers and Acquisitions: M&A activities are crucial for accelerating growth, providing access to new technologies, customer segments, and operational synergies. CEOs and CFOs are strategically pursuing acquisitions that align with their long-term vision.
Innovation and Differentiation: Innovation drives growth by differentiating products and services in a crowded market. Companies are investing in research and development to bring novel solutions to market, enhancing their competitive edge.
2. Technology
Technology is a cornerstone of modern business strategy. CEOs and CFOs recognize that digital transformation is not just about adopting new tools but about fundamentally reshaping their business models and operations.
Digital Transformation: Embracing digital technologies such as artificial intelligence, cloud computing, and data analytics is essential for enhancing efficiency, improving decision-making, and creating new business opportunities. Companies that lag in digital adoption risk falling behind competitors.
Cybersecurity: As businesses become more digitized, cybersecurity is a growing concern. Protecting sensitive data and ensuring business continuity in the face of cyber threats is a top priority. Investment in robust cybersecurity measures is crucial for safeguarding company assets and maintaining customer trust.
Customer Experience: Technology plays a pivotal role in enhancing customer experience. By leveraging data analytics, businesses can gain insights into customer behavior, personalize interactions, and build stronger customer relationships. Superior customer experience drives loyalty and growth.
3. Talent
Attracting and retaining top talent is a significant challenge and priority for business leaders. The success of any growth or technology initiative hinges on having a skilled and motivated workforce.
Talent Acquisition: In a competitive labor market, finding the right talent is crucial. CEOs and CFOs are focusing on creating compelling value propositions for potential hires, including competitive compensation, career development opportunities, and a positive work culture.
Employee Retention: Retaining talent is as important as acquiring it. Organizations are investing in employee engagement, wellness programs, and flexible work arrangements to retain their best employees. Building a supportive and inclusive workplace culture is essential for employee satisfaction and retention.
Skills Development: Continuous learning and development are vital in a rapidly changing business environment. Companies are providing training programs to upskill their workforce, ensuring they have the capabilities to leverage new technologies and adapt to evolving market demands.
The top strategic business priorities shared by CFOs and CEOs
Here’s an in-depth look at these top priorities and how they are shaping organizational strategies.
1. Meeting — and Exceeding — Growth Expectations
Growth remains the paramount objective for both CEOs and CFOs, though the focus has shifted slightly over the past year. CEOs report a slight decrease in prioritizing growth, with 45% ranking it among their top three strategic priorities, down from 53% in 2022. In contrast, CFOs have increased their focus on growth, with 62% ranking it in their top three, up from 59% in 2022. This shift highlights the intensified pressure on CFOs to drive profitable growth while managing costs and cash flow.
Key Strategies for Profitable Growth:
Ruthlessly Prioritize Projects: Organizations need to focus on projects that align closely with strategic business priorities. This ensures that resources are directed towards initiatives that offer the highest potential returns.
Reallocate Capital Strategically: Making significant changes to capital allocation, rather than incremental adjustments, can drive substantial improvements in profitability. Quickly shifting capital away from low-value to high-value uses is critical.
Economic Value Added: Companies that effectively implement these strategies can achieve, on average, 2.5 points more in economic value added than their peers. This underscores the importance of disciplined capital management and strategic investment.
2. Keep Investing in Technology
Technology continues to be a top priority for CEOs and CFOs, with both groups recognizing its critical role in driving business transformation and competitive advantage. However, there is a noticeable difference in risk tolerance, with CEOs being somewhat more risk-averse about increasing IT funding compared to CFOs. Despite this, the consensus is clear: technology, particularly AI, will significantly impact businesses over the next three years.
Driving AI Adoption:
Board and CEO Expectations: There is a strong mandate for C-suite leaders to not only protect the organization but also drive broad AI adoption across various use cases.
Customer Expectations: As customers increasingly leverage generative AI in their daily lives, their expectations for enhanced user experiences rise. Businesses must meet these expectations to remain competitive.
Employee Concerns and Opportunities: While there are concerns about job loss due to AI, employees are more likely to stay with organizations where they can leverage generative AI to enhance their roles.
Investor Pressure: Investors are looking for new sources of growth and improved margins, pushing leaders to deliver results through technological advancements.
New Market Opportunities: AI has the potential to create new markets and business lines, expanding service offerings and driving revenue growth.
3. Prioritize Workforce Issues and Address the Talent Shortage
Workforce issues are a pressing priority for both CEOs and CFOs, although they rank higher for CEOs (second-most pressing) than for CFOs (fourth-most pressing). The talent shortage in key areas poses significant challenges to business growth and profitability, making talent management a critical focus area.
Strategies to Address Talent Shortages:
Upskilling and Digital Skills Development: Offering employees opportunities to develop digital skills through programs like digital accelerators can enhance their capabilities and value to the organization.
Creating a Sense of Purpose and Belonging: Improving retention involves fostering a shared sense of purpose and belonging within the organization. This can lead to higher employee satisfaction and loyalty.
Revamping Job Descriptions: Making job descriptions outcomes-based, engaging, and growth-focused can attract top-tier candidates, especially in finance and technology roles.
Conclusion
The alignment of CEOs and CFOs on growth, technology, and talent underscores the interconnectedness of these priorities. Sustainable growth is driven by technological innovation and a skilled workforce. Digital transformation and a robust tech infrastructure enable companies to scale efficiently and stay competitive. At the same time, a focus on talent ensures that organizations have the human capital needed to execute their strategies effectively.
By prioritizing these three areas, business leaders can navigate the complexities of the modern business environment and position their organizations for long-term success. As Marko Horvat suggests, benchmarking your thinking against these priorities can help identify opportunities for greater alignment and strategic advantage. The future belongs to those who can seamlessly integrate growth, technology, and talent into their core business strategies.
