Published: 02 February 2023
Executive leaders must drive profitable growth despite slowing demand; persistent inflation; scarce, expensive talent; and global supply constraints caused by the Russian invasion of Ukraine, COVID-19 lockdowns and energy shortages. Learn what actions you can take to fight this “triple squeeze.”
The Navigate Inflation and Recession Resource Center shares the key actions thatshould drive all functions and the enterprise to support growth and profitability in these times.
Topics in this initiative include:
Optimize Budgets: Manage resources and spend strategically to act swiftly against persistent high inflation.
Secure Critical Talent: Be agile in securing digital talent to offset scarcity and expense.
Accelerate Digital Investments: Accelerate key digital and technology initiatives to combat global supply constraints.
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Executive leaders are currently facing three critical sources of pressure that require action.
Pressure 1: Persistent High Inflation
Ninety percent of CEOs say inflation will be an ongoing, significant factor in their region.
Sixty-nine percent of CFOs believe nonlabor input costs will continue to rise significantly.
Pressure 2: Scarce, Expensive Talent
Fifty percent of HR leaders expect increased talent competition in the next six months.
Forty-six percent of HR leaders anticipate attrition will remain high for in-demand roles in 2023.
Pressure 3: Global Supply Constraints
Fifty percent of chief supply chain officers expect a net increase in supply chain costs in 2023.
Sixty-seven percent of chief supply chain officers say they will likely need to pass input cost increases on to consumers in 2023.
Speculators, analysts and even central banks are recognizing a greater likelihood of global recession. Lessons learned from previous downturns show industry leaders accelerate in downturns by boldly investing in initiatives that differentiate their organizations from their peers. As an executive leader, you must drive profitability, productivity and innovation, and avoid harming your organization’s long-term capabilities by cutting back on the wrong things.
To emerge from the current downturn stronger, executive leaders need to make the right trade-offs in their budgets, secure critical talent and keep their foot on the digital accelerator. Right now, executives’ investment decisions are all about digital. In fact, 66% of CFOs plan to invest more in digital through the recession, and 32% plan to maintain their current spending levels, which grew significantly during the COVID-19 pandemic.
What follows are the key actions that you as leadersshould be driving across your function and enterprise to support growth and profitability in light of these pressures. We have carefully selected Gartner insightsto help younavigate the economic headwind, build back stronger and advance your own career.
Our research in this area addresses the following topics:
Manage resources and spend strategically through three major actions:
Action 1 — Make tough trade-offs. Create a prioritized list of the resource trade-offs you will make in cost management and budgeting. Develop a clear narrative that explains your thinking and that you can communicate to stakeholders to build buy-in.
Action 2 — Accelerate cloud migration. Accelerate movement to the cloud as part of a purposeful digitalization of critical business needs. This shift will enable you to reduce the impact of rising energy costs and become a more nimble, adaptive organization.
Action 3 — Challenge workflows. Radically challenge workflows and processes to make them faster, simpler and more agile.
How do I drive profitability, productivity and innovation, and avoid cutting back on the wrong things?
Visit the Navigate Inflation and Recession Resource Center frequently to see Gartner’s latest research.
Be agile in securing digital talent through three major actions:
Action 4 — Rethink work models. Fundamentally rethink the way your organization leverages its people. Consider flexibility, location, hours, part time versus full time, and in-house versus outsourced.
Action 5 — Clarify the employee value proposition (EVP). Clarify your EVP so you are positioned to attract and retain the right digital talent.
Action 6 — Secure digital talent. Aggressively seek to secure, retain and retrain the digital talent you need to accelerate your digital plans. Look for talent that has been cut loose from digitally native companies as they retrench.
How do I secure and retain critical talent?
Visit the Navigate Inflation and Recession Resource Center frequently to see Gartner’s latest research.
Accelerate key digital and technology initiatives through three major actions:
Action 7 — Reassess customer and employee vision. Identify your customers’ and employees’ most likely needs and behaviors in the coming years during the recovery and growth phases of the business cycle. Invest in digital initiatives that will differentiate your organization and allow you to emerge stronger from the recession to capture market share.
Action 8 — Invest in predictive and autonomous capabilities. Invest in predictive and autonomous digital projects that make your organization faster and leaner, including in its decision making.
Action 9 — Narrow your digital metrics. Narrow the metrics you use to measure digital initiatives and monitor their progress to ensure you focus on the few that align with your desired outcomes.
How does my organization accelerate digital business investments?
Visit the Navigate Inflation and Recession Resource Center frequently to see Gartner’s latest research.
2022 Gartner CEO and Senior Business Executive Survey: This survey was conducted to examine CEO and senior business executive views on current business issues as well as some areas of technology agenda impact. The survey was conducted from July 2021 through December 2021, with questions about the period from 2021 through 2023. One-quarter of the survey sample was collected in July and August 2021, and three-quarters was collected from October through December 2021. In total, 410 actively employed CEOs and other senior executive business leaders qualified and participated. The research was collected via 382 online surveys and 28 telephone interviews. Disclaimer: Results of this survey do not represent global findings or the market as a whole, but reflect the sentiments of the respondents and companies surveyed.
2022 Gartner CFOs’ Playbook for Enhancing Profitability and Driving Digital Acceleration Webinar Poll: This data was collected online from 182 to 189 global CFOs and finance executives in July 2022.
2022 Gartner Benchmark With Brian: Attracting Talent and Improving the Employee Experience Amid Uncertainty Webinar Poll. We had over 240 HR leaders on the line representing a spectrum of industries. The majority were based in North America, though the perspectives and practices they shared were developed to support their global organizations.
2023 Gartner HR Priorities Survey: This survey was conducted from 5 July 2022 through 29 July 2022, and includes responses from more than 850 HR leaders across 44 countries and all major industries. Multiple HR leadership roles were represented: 41% were CHROs and 15.6% were heads of talent management. The firms represented included 65.3% large enterprises with annual revenue of at least $1 billion.
2022 Gartner CSCO Community Poll on 2023 Cost & Inflation Outlook: This data was collected from an online quick poll from 42 chief supply chain officers in August 2022.
2022 Gartner Finance Cost Reduction Quick Poll: This study was conducted to understand the areas of the business organizations are targeting for cost reductions over the next 12 months. The research was conducted online during July 2022, among 234 respondents across multiple industries. Respondents were CFOs or other finance leaders (including heads of financial planning and analysis, controllers and finance transformation leaders). Disclaimer: Results of this study do not represent global findings or the market as a whole but reflect the sentiments of the respondents and companies surveyed.
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