With the onset of COVID-19, the world turned upside down. The pandemic continues to wreak havoc on our lives, businesses, economies and governments, but as we enter the final quarter of 2020, YPO, the global leadership community of more than 28,000 chief executives, surveyed their members to get a pulse on their outlook and gather insights on how they plan to navigate in a post-COVID-19 world.
Nearly half of the 2,572 chief executives surveyed (49%) have a slightly or significantly more negative business outlook compared to what it was on 1 March, while more than one-third (37%) report their business outlook is slightly or significantly more positive versus 1 March. Both sentiments represent a notable improvement over YPO Survey data from the previous six months.
Participants in the latest YPO Global Pulse represent chief executives in 100 countries and 38 industry sectors. Positive business outlooks came from the health care (53%), transportation/trucking/railroads (50%), retail and wholesale (45%) and product services (45%) industries. Pessimism remains among hospitality/restaurant (77%), aerospace/aviation (71%) and the automotive (67%) sectors, which remained almost identical to sentiment in May 2020.
What does this mean? The new reality for global business leaders will likely strike a balance between returning to old ways and creating new norms in business.
One-year outlook
Chief executives are mixed when it comes to the road to recovery for business outcomes. While there are notable improvements compared to previous 2020 data from April and May, there is not a clear consensus on anticipated growth among the business outcomes.
Of the three business factors — revenue, fixed investment and the total number of employees — survey respondents were most optimistic about revenue growth in the next 12 months as compared to 1 March.
With the exception of South Asia and Europe, move than one-third anticipate a 10% increase or more in revenue one year from now. As expected, the top three industries where chief executives predict a 10% decrease or more in revenue one year from now include hospitality/restaurant (76%), education (61%) and aerospace/aviation (61%).
Thirty percent of chief executives expect a 10% increase or more in fixed investment one year from now. Half of respondents in telecommunications forecast a 10% increase or more in total fixed investment, whereas over half of respondents in hospitality/restaurant (65%) and media/entertainment (52%) forecast a 10% decrease or more in total fixed investment one year from now as compared to 1 March.
Forty-five percent of leaders representing 15 industries expect the number of employees to remain the same a year from now.
Multiple forces have the potential to impact businesses in the next 12 months however, YPO chief executives state the top three as COVID-19 resurgence/restrictions (63%), the regional economic environment (61%) and the political environment (56%).
Employees are critical component of recovery
The route back to work remains ambiguous in many regions not only for chief executives, but also for their employees. Many businesses were forced to move to remote operations, which created a new set of challenges: leading virtual teams, stifled communication due to lack of non-verbal and social emotional cues and processes designed for in-person collaboration.
Thirty-four percent of respondents believe employee engagement will be the most significant issue they’ll face when it comes to managing their teams. Engagement may be more difficult as the world moves to a more permanent remote work environment. Chief executives cited other major challenges in managing employees in the future include productivity (20.6%), collaboration (14.6%), mental health (12.4%), health and safety (7.7%), and burnout (7.4%).
Post-COVID-19, 50% of survey participants said that they plan to offer part-time remote work in the post-pandemic world.
A global economy in turmoil
Nearly half (47%) of respondents say the most significant issue facing the CEO of the future will be the global economic environment. This is a justifiable concern. According to the World Economic Outlook, 2021 global growth is projected at 5.4%, which would leave the GDP for next year about 6.5 percentage points lower than in the pre-COVID-19 projections of 2020.
There will be challenges shared by all, regardless of region. Digital technology, which was the second-most selected challenge across all regions, shows that these are global issues and not region-dependent. Government policy was the most popular suggested issue, and chief executives in the manufacturing sector responded that supply chain constraints will also pose significant challenges for leaders in the coming year.
Never going back: The CEO of the future
In these tumultuous times, employees look to their leaders for reassurance and guidance about the path forward. Business leaders are under increased pressure to maintain business continuity, manage employees in potentially new settings, and forge a path to better days.
Nearly 4 out of 10 leaders surveyed agree that adaptability is the most important skill for the CEO of the future. World-renowned psychologist Daniel Goleman defines adaptability as “having flexibility in handling change, being able to juggle multiple demands, and adapting to new situations with fresh ideas and innovative approaches.”
Resilience was also noted as the second-favorite choice amongst respondents (15%), citing emotional intelligence, judgment, and vision also high on the list of traits.
Ninety-eight percent of chief executives say they made multiple adjustments due to the pandemic that will benefit their businesses in the long term. No. 1 is work flexibility.
One thing is certain, leadership will change forever after this pandemic. Leaders will have to continue to be nimble and make important decisions faster and better in the future much like they did when COVID-19 struck.
Crisis has a way of revealing, course-correcting and recalibrating what leadership really means.
Download the full 2020 YPO Global Pulse Survey Report.
