What keeps CEOs up at night? When it comes to external worries, in most cases, executives must simply hope for the best. But most of their internal fears lie directly within their control.
As we head deeper into the year ahead, The Conference Board polled over 800 CEOs about the biggest business challenges they expect to face in 2019. Executives opined on not only their top external concerns, like trade and politics, but also their top internal anxieties.
To that end, here are American CEOs' top three internal anxieties for 2019 and ideas for turning these challenges into opportunities.
CEOs cited the ability to attract and retain quality workers as their top internal concern. This comes as no surprise given the challenges posed by today's tight labor market. With work opportunities abundant during this time of record-low unemployment, people are leaving their jobs at the highest rate since 2001.
In this economic environment, executives need to remember that short-term financial metrics are just one part of the equation. They need to place even more emphasis on building and maintaining a strong company culture. And to make their organizations attractive, enticing places to work, companies need to constantly measure and improve their "people metrics" – benchmarks like attrition, diversity and engagement.
Focusing on these factors can help retain an organization's brightest employees. Departures can take a real toll on the bottom line: When a worker leaves, it costs employers an average of 33 percent of the worker's annual salary to hire a replacement.
Kodak. Radio Shack. Toys "R" Us. They represent just a handful of companies that recently went bankrupt due to their inability to successfully innovate. With the digital economy continuing to upend every industry, CEOs understandably ranked the need to create new business models as their second biggest worry for 2019.
Among the investments that CEOs should at least consider: Expanding market opportunity by enhancing a physical product with complementary services – or in some cases, making a "dumb" product "smart." The good news is that CEOs recognize this shifting customer landscape. Globally, two-third of the executives we surveyed say they will need to emphasize solution selling. Companies that provide services have the opportunity for deeper, longer-lasting relationships with their customers.
And if that weren't challenging enough, CEOs will have to innovate at a time when growth starts to slow. Over the next five years, the U.S. economy likely will grow at an annual pace of between 2 and 2.5 percent – well below historical averages. More tepid growth will tempt CEOs to dial back on the long-term investments needed for success. But if they pull back too much, their companies will likely be behind the curve when the economy regains momentum. Figuring out how to strike the right balance between short-term priorities and long-term success will surely keep them up at night.
Finally, CEOs cited the challenge of developing leaders for the next generation as their third biggest internal concern. The survey showed that executives recognize the need to invest in succession planning for future achievement.
But here's where things get tricky: In the digital era, many roles that exist today won't exist in the future. And the new roles that no one has yet to forecast will emerge. Without a crystal ball, CEOs must invest in continuous learning for their employees. Successful businesses navigating through these uncertain waters focus on modernizing their employee's skills. FedEx, for example, has partnered with higher education organizations that teach through online, competency-based education. Employees are rated according to their mastery of new skills rather than how much time they put into the learning process. In many cases, this accelerates the whole procedure.
Just as important, digital education needs to extend to the top of the house. Less than one-third of the CEOs we polled cited giving leaders digital exposure as a top priority. Culture and priorities flow from the top, and the stakes are high: Organizations with the strongest digital leadership capabilities are financially outperforming those with the weakest capabilities by a whopping 50 percent.
CEOs' fears in these three areas are understandable. But they will be able to rest a little easier knowing that all are manageable, with the right game plans.