Factors Leading to Success for CEOs
The essay helps in the entire analysis of the different kinds of factors which are responsible in the success of the CEOs in the different kinds of organizations. Furthermore, the different kinds of challenges of focusing only on the financial metrics to the long term success of the organization are required to be analyzed and identified effectively. Lastly, the different challenges which are being faced by the leaders in balancing financial along with ESG performance metrics are required to be identified as well. Proper discussion is required to be done in which this will help the leaders in addressing the different challenges.
In the present era, the CEOs are the leaders of the organizations who help in guiding the employees in performing their best and gain competitive advantage. There are few major roles of the leaders which are required to be identified in order to evaluate the success in the organization. The major roles of the CEOs are to inspire trust with both competence and character along with creating a vision for the organization as well. Moreover, the CEOs need to execute the different kinds of strategies which will be helpful in the success of the entire organization and coach the potential as to improve the performance of the team and solve problems in an appropriate manner (Adner, 2016).
In the present turbulent world, there are different kinds of aspects which are required to be considered in evaluating the performance of the different CEOs in various organizations. In order to become an effective CEO, there are few aspects which will lead to success of the leaders which are described as follows:
Firstly, this is the duty of the CEOs to disruptive and pragmatic in nature which will help in evaluating the success. The CEO is considered as the leader in corporate world who needs to be pragmatic about the focus and pace of innovation which is required to be implemented in the organization (Cashman, 2017).
Secondly, in order to be a successful CEO, the risk taking approach is necessary which helps in analyzing that the leaders should take calculated risks and which are opportunistic (Lester & Kezar, 2017). Moreover, the CEOs need to analyze the overall success of the organization in different aspects which is inclusive of taking care of the financial aspects along with providing motivation to the employees as this will increase the productivity of the organization.
Challenges of Focusing on Financial Metrics for Long-Term Success of Organization
Thirdly, there should be the nature of continuous improvement process among the leaders or CEO of the organization. This will help in ensuring that grit and perseverance do not turn into self-delusion. The CEOs need to be strong enough which will counsel them towards making continuous efforts to organization and themselves as well. The decisions are the fuel on which the organizations run and this increases the productivity of the company if the decision which has been taken is positive and is opportunistic in nature (Cashman, 2017).
Lastly, delivering the different tasks in a reliable manner is the other aspect which is required to be considered while analyzing the success of the organization. The ability to reliably produce the different kinds of positive results in the organization will help the organization along with the employees in becoming highly potential and gaining huge competitive advantage as well in the entire competitive kind of environment (Inyang & Ekeng-Ita, 2016).
From the above factors, this can be considered that in order to become a successful CEO in an organization, this is mandatory in nature that the person needs to constantly anticipate the requirements of the organization and they should not allow any kind of shortage of resources to cause the company to miss the different kinds of opportunities in the market (Goddard, Hazelkorn& Vallance, 2016). Additionally, the CEOs are responsible for delivering the performance in the organization; however, there can be different kinds of challenges which can be faced by the leaders. In such cases, the CEOs need to consult with the management team to understand and analyse the key metrics in each area as this will lead to superior performance in the entire organization (De Paoli & Ropo, 2015).
For example- Sundar Pichai is one of the most successful CEOs at Google who is being able to be successful as his approach was to take into consideration the different kind of viewpoints of the employees and implement them. Furthermore, there is a nature of continuous improvement in Sundar Pichai which has helped him in gaining competitive advantage and the productivity of the firm has increased to a huge extent as well.
There are various kinds of challenges which can be faced by the different organizations when they focus on the financial metrics for the long-term success of the organization. In analyzing the long-term success of the company, there are various factors which are required to be taken into consideration apart from financial metrics. As a leader of the organization, the CEOs need to analyze the capability of the organization to achieve the different organizational goals efficiently (Adner, 2016).
Other Challenges Faced by Leaders in Addressing Changing Demographics
Firstly, the main challenge will be lack of motivation among the different employees and this can affect the morale of the employees working in the organization in a negative manner. The employees are the assets of the company and they are required to be valued which will help them in feeling motivated and perform their tasks. With the hard work and effort of the employees, the financial aspects can be taken into consideration as when the employees will work, and then the performance of the organization will be improved (Bras & DeMillo, 2017).
This can be solved with the implementation of Maslow’s theory; the needs of the employees are required to be considered such as physiological needs along with safety and security needs. These are the different kinds of aspects in the needs theory which will be mainly focusing on the growth of the employees through career development and gain more competitiveness in the entire market.
Secondly, there can be another challenge of lack of innovation is required to be considered. With proper innovative capabilities of the employees and the leaders, there will be huge productivity of the organization and the morale of the employees will be increased as well. With the implementation of innovation, there will be implementation of ESG metrics which is required to be considered for the success of the organization (Kickbusch, Cassels& Liu, 2016).
For instance- Tim Cook, the CEO of Apple is not successful like the other CEOs in the market as the main approach of him is to gain profitability in the market. However, this has been seen that there are ethical issues which have been faced by Apple due to Tim Cook has led to different kinds of criticisms which led to loss of profitability of the company in a negative manner. From the respective analysis, this can be considered that the motivation of the employees plays a major role in gaining competitive advantage and become clearer in the different types of approaches as well.
Furthermore, the other challenge is that there would be no communication if the higher authorities feel that only financial metrics are essential for the success of the firm. When there will be no engagement among the different employees, this will lead to ineffectiveness in the different tasks which are being performed in the organization and there will be financial loss as well. The strategic focus plays a major role which will be getting affected when only the financial metrics are taken into consideration (Spencer, 2016).
Examples from Successful CEOs
Lastly, the negativity in the customer relationships is the other major issue which is being faced by the organizations in the present scenario. This has been noticed that in the present era, the leaders should be transformational leaders in which the opinions of the employees are required to be taken into consideration which will improve the overall efficiency of the organization in a positive manner (Chin, Trimble & Garcia, 2017). Both employees and the leaders should be innovative in their approaches to gain competitiveness or else there will be huge failure of the organization (Price, Schneider& Quick, 2016).
There are various kinds of challenges which are being faced by the different leaders in the current era along with the last 5 years as well in balancing the Environmental, Social and Governance performance and financial metrics. Firstly, the main challenge which is being faced by the CEOs is that the financial metrics is based on the different kinds of financial aspects as profitability, increase in gross and net profit of the organization effectively (Madsen &Mabokela, 2018).
Furthermore, on the other hand, in the ESG metrics, this serves as the indicator of quality and this can be used as the risk management tool in the organization. According to the research by Vogel (2017), the ESG helps in maintaining a proper position in the competitive market by maintaining proper focus on environmental, social and governance aspects. However, there are few organizations, wherein the CEOs do not take ESG metrics into consideration (Bach, Kaufman & Duckworth, 2015).
In order to balance the financial metrics and ESG metrics, there are various kinds of issues which are being faced by the different leaders or the CEOs in the organization which is inclusive of the following:
Environmental aspects are inclusive of determination of the change in climate along with the emission of the carbon along with implementation of anti-carbon policies as well upon the companies.
Social aspects are inclusive of relationship between the different suppliers, managers and the other employees in the organization along with the different communities wherein the organization in an operative manner.
Governance aspects is inclusive of the various audits, pays along with internal control and shareholder rights which is required to be followed by the organization.
Firstly, there will be lack of knowledge management in balancing the ESG metrics and financial metric as this can be seen that when the company is trying to handle the financial aspects, there can be situation wherein there will be lack of expertise in the handling of ESG metrics.
Practical Recommendations
Secondly, there will addition of cost as while the company is indulging in the welfare of the society and they are engaged in different kinds of CSR activities, this will reduce the entire profitability of the company which will affect the overall productivity of the organization.
Lastly, there can be conflict of interest with respect to the shareholders as the main motive of the shareholders will be gaining profit and this will be helpful in managing the different kinds of aspects such as gaining huge productivity. However, the conflict of interest will arise when the company and shareholder are of different opinions and this will affect the profitability.
In the recent turbulent world, the leaders need to consider the different kinds of ESG metrics as this will help them in long term success of the organization. The ESG metrics helps in the construction of the portfolio which will improve the overall performance of the organization and this will be inclusive of the financial performance longevity as well. However, there are few challenges which are being faced by the leaders in managing both the metrics in the present scenario (Ward, 2016). The main issue which is being faced by the leaders is that the main focus is on the financial performance of the organization and this leads to different kinds of risks which affects the growth of the firm in negative manner.
The ESG metrics is designed in such a manner which provides the different employees with measuring their current exposure to listed companies which will help in providing sustainable impact solutions for the entire growth of the firm in this turbulent kind of environment (Hopkins et al., 2016). In order to create and maintain balance between the two metrics such as financial and ESG, there will be problem faced by the company as there are few organizations which mainly focuses on generating profitability in the organization (Nissinen & Laukkanen, 2018). Furthermore, the CEOs do not care about the morale of the investors or employees working in the organization.
From the management perspective, this can be analyzed and identified that integration of the ESG metrics and dimensions of the performance makes the organization more resilient in nature and this helps them in create a dynamic kind of business environment which is less complex in nature as well. However, without the integration of the same, the managers or the CEOs of the organization will be deprived of the same and this can cause huge issues in the organization as this will lead to failure of the success of the organization (Vogel, 2017).
There are different kinds of aspects which can be considered by the leaders in order to reduce the different challenges in balancing the ESG and financial metrics in the organization. This has been noticed that in the present scenario, there are different kinds of role of the successful leader which is required to be adopted in order to gain competitive advantage in the entire market. As a leader, the CEOs of the organizations need to be the representative of the organization in which they should plan for the success of the overall organization and not the personal goal (Vogel, 2017).
Proper integration of the different kinds of personal goals along with the organizational goals is required to be analyzed and taken into consideration as well. As a successful leader, this is the core responsibility of the CEO to take care and take the entire responsibility of the different kinds of approaches which will be helpful in managing the different aspects in an efficient manner. The appropriate kind of balance can be created between the ESG and financial metrics by taking into consideration the different financial aspects of the company (Vogel, 2017).
With the appropriate kind of integration of the ESG metrics, this will be acting as the key differentiator for the different organizations in competing to retain and attract long term capital and this will be avoiding and reducing the different kinds of risks which are included in the business. With the implementation of the same, the financial aspects will be safeguarded and there will be no such worries on gaining profitability in the entire competitive environment. The relationship of the companies with their investors is directly related to the integration of the different ESR practices which will be helpful for them in becoming more compatible in nature.
Furthermore, this can be difficult to do the entire valuation in financial terms, however there is a simple kind of evidence that the different organizations perform well who has included the ESG metrics in the different kinds of operations of the organization and which is being performed by them as well. The CEOs of the organizations can increase the usage of the ESG metrics over the financial metrics as the development of the ESG metrics helps in increasing the number of the investors in the entire market which is competitive in nature. The standards related to ESG are being incorporated in the business operations and strategies which will be helpful in becoming more competitive and gain more competitive advantage in the market as well.
For instance- Jeff Bezos, the CEO of Amazon tried to include the ESG metrics in the organization wherein the company tried to maintain proper relationship with the different investors and this has helped them in increasing the overall growth of the firm in a positive manner in comparison to the other competitors in the market. On the other hand, Tim Cook mainly focused on the different financial approaches and there is lack of ESG metrics and this has affected the growth of the firm few years ago as well.
Conclusion
Therefore, this can be concluded that there are various kinds of challenges which are being faced by the different leaders along with the employees in the organizations. From the entire analysis, this can be analyzed and identified that there are different kinds of aspects which are required to be taken into consideration which will help in maintaining the effectiveness and importance. Moreover, this has been analyzed that in order to generate the success of the organization, there will be inclusion of both financial and ESG performance metrics as well.
However, there were different challenges which were faced by the CEOs in the organization in order to maintain balance between the two to improve the performance of the organization in a positive manner. Furthermore, the different recommendations have been provided which will help in improving the overall situation in a competitive and appropriate manner. Moreover, with the help of the ESG metrics, there will be proper integration of the different activities of the organizations with the investor of the company and there will be no such inclusion of the potential risks in the organization as well.
References
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