by Karen Armon, CEO/Founder, MarketOne Executive
Companies Already Feeling Recession Squeeze
Most U.S. business leaders believe the economy is in a recession now, or that one is inevitable within six months. That’s according to a survey conducted by The Boston Consulting Group (BCG) of 101 senior decision makers at U.S. companies with at least $500 million in annual revenues.Almost every executive (94.9%) who said that a recession is likely believes his or her company will not be able to avoid the effects of the recession. A total of 53.4% of executives believe that we’re in a recession now (37.6%), or that we will be within six months (15.8%).
“We believe companies should approach signs of a recession as an opportunity – to prepare. Downturns magnify relative strengths and weaknesses, so companies that gird themselves intelligently can leverage a change in the dynamics of an industry – something that always happens in a recession – so that it works in their favor,” said Hal Sirkin, global leader of BCG’s Operations practice, which spearheaded the research. Most executives – 57.6% – said the recession will present opportunities (though 42.4% said it won’t). Of those who said it will, 64.7% said the recession will lead to chances for market share gains.”
The Boston Consulting Group, 3/6/2008
Trend: Shifts in demand cause shifts in organizational structures. Executives who keep a sharp focus on improving revenue and gaining market share while competitors flounder will be in demand. Revenue contraction causes organizations to look internally for opportunities to trim fat or improve productivity. Leaders who know how to do this while improving market share will be in demand in 2008.
Tip: Develop a strong plan that drives these changes and include them in your presentation – whether you are in transition or looking to make a move later this year.
The Executive Job Functions Most in Demand for 2008
Demand for senior-level executives with significant business development, sales, operations management and general management will outstrip corporate appetites for management-level hiring this year. That’s according to the findings of ExecuNet’s 16th annual Executive Job Market Intelligence Report survey of more than 250 employer organizations. The responding companies indicated that they expect the selection of executives with functional expertise in finance, engineering and marketing to also contribute to the most growth in leadership hiring throughout 2008.
Trend: No longer will executives be allowed to just have functional expertise. Executives who understand business issues will be brought to the C-Suite table – as long as they embed those business issues into their functional leadership roles. Back-office leaders who have stood upon their expertise yet are cost centers will have a struggle in presenting their abilities versus an organization outsourcing to service firms.
Tip: Executive leaders of such cost centers as human resources, information technology, accounting, quality and the like need to move from being “cave dwellers” and learn how to be “bear killers.” Nobody gets a free ride anymore.
Recession may or may not be upon us. It really doesn’t matter if it is or isn’t because when we know it will be too late. Instead, executive must focus on how to grow organizations and build revenue streams regardless of their functional role.
Today, executives need to see that organizations will not grow leaders from within because it just takes too long. Instead, executives with a full compliment of contextual understanding of how to grow a business must come into the organization employment-ready with a value proposition that fits the strategic direction of the industry, the market, and the company. Too many executives believe that their functional expertise is enough and, sadly, it isn’t.
Scientific management thinking, created a century ago, fit the economic structures of the present day with a labor force of immigrants who had little education but were needed to assemble with their hands (i.e. functionally expert). Today, this type of thinking doesn’t fit well with what an organization needs from its executive ranks. Whether big or small in revenue size, all hands must be like the small cottage industry where everyone is focused on serving the client and making money (i.e. business expert). The rest is just noise.
The MarketOne Executive Bottom Line
Executives who are landed must get their “back-office” function aligned for maximum productivity. When revenues hit, they are going to hit big and companies can no longer afford slop in the system nor can executives who lead functional areas miss this opportunity that this downturn affords. Executives who are in transition must deep dive into their knowledge set and understand what drives hiring in a slowing economy – revenues, revenues, revenues – and align their pitch accordingly.