As future-seeking leaders strive to create continuity and normalcy in 2022, their ability to adapt to uncertainty puts them in a stronger market position and sets them apart from their peers. While 2020 was a disruptive year downward, 2021 generally was disruptive upward. Leaders seek to maintain the upward trajectory by acting on the following five trends:
1. Risk is here to stay: Future-seeking leaders acknowledge risk has become a mainstream element of business decisions and will remain so for 2022 and beyond. The frequency and simultaneous occurrence of high-impact risks require connecting and managing a “portfolio” of risks at the enterprise level (e.g., climate, geopolitics, health, financial, supply chain, talent shortages, human capital, cyber, war). These risks likely will continue to increase, necessitating a culture of adaptability to incorporate new information that arrives daily or hourly, and requiring leaders to act decisively when events happen. The role of the chief risk officer will continue to increase in prominence at the board and senior management level, working to create flexibility and addressing the volatility of risk across the organization to avoid downward spirals caused by intersecting events (for example, concurrent illness spike, extreme weather, labor shortage, supply chain disruption, reputation damage, financing crunch).
2. Remote and hybrid work models will stabilize and normalize: Even as different countries tackle the Omicron variant of Covid-19, future-seeking leaders work to restore and maintain in-person work arrangements where appropriate and necessary. They also offer remote and hybrid work models where they make sense. They know various models are effective for some but not all organizations, roles or employees, and that research suggests remote work eventually will stabilize for 25% to 40% of the global workforce. A challenge for 2022 is that far more employees desire remote and hybrid work arrangements than companies are willing to commit. Future-seeking leaders analyze remote and hybrid work arrangements and make decisions by factoring in the impact of enhanced access to talent markets, as well as productivity, engagement, turnover, culture, health, innovation and risk outcomes. They balance the opportunities with the risks associated with off-site work, aiming to drive better results.
3. The “Great Resignation” will give way to permanent talent shortages in some areas: Eventually, labor markets will stabilize after pandemic-created job shifting, but more permanent demographic shifts will manifest into talent shortages for certain jobs, skill areas and geographies that could exist for years. Future-seeking leaders emphasize talent strategies that involve both offense and defense, and create places people want to be regardless of circumstance. They strive to be “net talent gainers,” hiring more employees than they lose, and learning why people join and stay as well as why they leave. They differentiate culture and employee experiences instead of merely ratcheting up pay and perpetuating wage inflation. They know that providing workers with flexible work, pay, benefit, and skill development programs results in significant competitive advantage over less flexible peers. They use purpose as leadership glue to drive constancy in company culture while business models and daily operations transform.
4. ESG and sustainability will become mainstream: Debates by investors regarding the validity of stakeholder capitalism continue to give way to greater focus on long-term economic health. J.P. Morgan reports growing evidence of a positive relationship between environmental, social and governance (ESG) factors and financial performance, citing a recent report from NYU Stern analyzing 1000 ESG studies published from 2015-2020 comparing ESG portfolio performance with conventional investments. Along with such findings come expectations on ESG and sustainability commitments from key stakeholders, including investors, customers and employees. Future-seeking leaders understand that people, risk and capital are interconnected across ESG factors. They act accordingly to fortify their organizational purpose, drive performance and take meaningful action around climate, social factors of ESG (such as DEI, dignity, and wellbeing), and effective governance practices.
5. Employee wellbeing and organization resilience will create competitive advantage: Future-focused leaders promote employee wellbeing, connecting the support of healthy, resilient employees to healthy, resilient organizations. They also take an expansive view of resilience by focusing on its financial, operational and workforce dimensions. For financial resilience, they experiment with various risk mitigation and investment opportunities to become more adaptable to unpredictable events and better match risk and capital. For operational resilience, they develop new ways to serve customers and protect employees during unforeseen events, as well as emergency response planning, crisis management, workforce flexibility and technologies that ensure that business can be done regardless of circumstances. For the workforce, they meet employees’ unique physical, emotional, financial and social wellbeing needs and create a common sense of purpose as well as physical and psychological safety that enable employees and organizations to thrive under the most trying conditions.
Courtesy- https://www.forbes.com/sites/johnbremen/2022/01/06/2022-forward-look-the-future-of-risk-omicron-the-great-resignation-hybrid-work-esg-and-more/?sh=4434463c6234