CEOs focus on the 3Cs

2008

American chief executives are battening down the hatches to weather the current economic storm, preferring to "hunker down" and consolidate what they already have rather than changing direction or making bold or potentially risky decisions.

A study by U.S research firm Vantage has found a general reluctance among many CEOs to make sudden business moves right now.

Instead, the priority in these uncertain times seems to be build upon and consolidate what they already have.

Rather than making bold decisions, many CEOs are focusing on consolidation and strengthening their businesses internally, the research has suggested.

This has included fine-tuning internal operations, improving the quality of company culture and internal communications and focusing more on customer service.

These very important, yet perhaps less obvious, changes are meant to help companies stay on track while the economy hovers in uncertainty, argued Vantage.

Nearly three quarters of the CEOs polled for its Management Action Programs (MAP) research said they did not expect the economy to improve for at least 12 months.

In coming to grips with this gloomier long-term reality, most CEOs also said they had now completed most of their major business moves, such as cost containment and workforce reduction.

The priority and focus now was reassuring and supporting employees by frequent, mostly face-to-face, updates about company financials, results and strategies, they added.

Lee Froschheiser, president and CEO of MAP, said the survey highlighted the major significance of strengthening business fundamentals and, especially, the need for clear communication.

Bottom-line, clear communication was the most important thing a business leader could do in the current climate to ensure success, he stressed.

"This means that to properly manage and grow a business through tough times, you must be an effective, compelling communicator," Froschheiser said.

"Great CEOs are doing this by implementing regular meetings, adopting a transparent leadership style and creating a very candid workplace culture.

"They're also boosting company-client communications with better customer service. These changes produce an open environment, which is the necessary breeding ground for establishing successful strategies and achieving a company's goals," he added.

Among other findings, the survey found that half of the CEOs polled felt customers had reduced their purchases, on average trimming they spending by between 10-30 per cent.

CEOs were making face-to-face meetings, rather than video or online conferencing, a priority when it came to communicating.

Most CEOs preferred to communicate this way at least once a month and a quarter were meeting more often with employees than a year ago, the survey found.

Managing internal change was becoming an even more important part of their business.

It was now one of the top-five challenges CEOs confronted regularly, in addition to revenue growth, cost containment, competitive pressures and hiring talented employees, the poll reported.