As we race to the end of the year, business leaders are busy trying to close up 2023 with a flourish as
they prepare for what feels like a very bumpy beginning to 2024.
The Advantexe research team has been busy surveying industry leaders, conducting research, and leveraging our daily global interactions with participants of our Business Acumen learning programs to cull three big macro business trends that are about to hit.
This blog is meant to share ideas, insights, and a unique point of view as you face the volatile and uncertain days ahead.
Trend #1: Budget Freezes and Cuts in Staff
They started happening in October and November and are now in full swing. Many major S&P 500 companies have quietly started to freeze budgets and make cuts in staff. The budget freezes are for travel, meetings, training, and anything “non-essential.” The cuts in staff are long-awaited "right-sizing" and it is the perfect storm for many organizations to get rid of the non-productive resources that are bringing down productivity and profitability.
The challenge as we see it is that many companies are going a little too heavy on the cutting as job performance is mixed and the impact of working remotely for some and working in an office environment for others is masking the reality of true performance.
The primary business drivers of the freezes and cuts are coming from:
- Financial difficulties – Missing revenue targets, slow down in buying from customers, destocking of inventories, and inflation of labor and materials.
- Increased automation and technology – New technologies including AI are starting to make some jobs obsolete and companies are investing to reduce the workforce even further.
- Outsourcing – Companies are realizing that outsourcing business processes, manufacturing, marketing, and sales functions can be cheaper and more effective.
Trend #2: Increased Expectations of Workers
The post-COVID days of hiring more people for growth and letting them do whatever they want with limited accountability are over. Boards of Directors are finally realizing that not having specific goals, objectives, and realistic coaching and feedback dialogues have caused many companies to literally hit rock bottom.
As a result, 2024 is going to see a revitalization of the basics of leadership like having specific goals and holding employees accountable to realistic performance. We predict that leaders are going to come into 2024 blazing with an increased determination like never seen before to get back to proven approaches of business leadership.
Trend #3: More Demand for “Business Savvy” Employees
It is almost unanimous that every company on the planet is looking to dramatically increase the business savvy of every employee in their organizations. By business savvy, we are talking about these ten elements:
- Understanding the strategy of their own business
- Industry knowledge
- Financial acumen
- Market awareness
- Problem-solving
- Networking skills
- Communication skills
- Risk management
- Ethical decision making
- Versatility
The challenge for most leaders and even leaders of talent development is that you can’t develop these skills in an hour. It takes time, practice, and immersion. It will be interesting to see which companies realize that increasing business savvy is going to have to be prioritized about the budget freezes and job cutting.
