As the dust settles in the wake of the COVID-19 pandemic, businesses are gradually regaining momentum, picking up the pieces and putting it all back together. The new picture looks quite different than it did in the pre-pandemic days, and while many business leaders have adapted well and restructured their operations accordingly, there will continue to be big pandemic-driven factors that will impact how we do business in 2022 and beyond.
Inflation has had an enormous impact on how CEOs have had to rethink business practices. Supply chain challenges, plus rising costs of goods and labor, are driving forces behind many of these necessary changes.
The CEO Pulse: Inflation Resource Center
One thing is certain of challenging times: it exposes the truth of a situation. Companies that had weak points in their management, operations or processes have been exposed in the wake of the pandemic. In business-to-business relations, savvy leaders can no longer turn a blind eye to poor communication, sub-par management, and less than ideal relationships amongst customers and suppliers.
Companies that have innovated and adapted well to the pressures of 2021 and 2022 have had to sever many of their business relationships in an effort to do what’s best to keep their company afloat.
Marco Petruzzi, CEO of Dovetail Furniture based in California, is staying focused on better understanding and communicating with the network of independent sales reps who represent the business.
“We are really trying to nail down the communication with them. They’re our face, even if they’re not part of our company,” he said. “We’re thinking long term about how to gain market share by staying on message with our value proposition to our customers.”
Petruzzi uses these three questions to guide his strategy:
There comes a time when a relationship no longer serves both parties’ best interests, and while severing that connection can sometimes be difficult, it’s often necessary.
It’s sometimes necessary to sever relationships with clients who no longer align with your company.
Existing customer relationships need to be well-maintained in 2022 as the need to engage existing customers is now even more accelerated. For those relationships that no longer align, a different course of action must be followed.
Letting go of clients can be challenging, but customers who aren’t the right fit drain resources that could create more profitable opportunities. So Brian Burns, founder, partner and owner of Cutting Edge Countertops in Ohio, dropped a top 10 account because they couldn’t keep up with changing costs.
“Their process to get price increases approved was so slow and cumbersome that we decided to part ways before we really even got to that point,” he said. “Frankly, business is really, really good in our industry and there were bigger fish to fry.”
Petruzzi’s customers are accustomed to net 30 invoices, but with months-long delays, they began getting upset with paying for furniture not received.
“We have had to be flexible with payment terms, which has been painful to a certain extent,” he said.
Some leaders are feeling the challenge of acquiring materials more greatly than others and have adjusted production accordingly. Others have chosen alternative materials as a solution. But all agree that maintaining excellent communication with their suppliers is the key to managing supply chain scheduling challenges, material attainment, and production delays. We asked 4 CEOs to weigh on how their supply chain relationships have changed in 2021 and heading into 2022.
Janice Miller: With the supply chains drying up, it’s been difficult to get new equipment and parts for our aerial lifts. We’ve been trying to replace older pieces of equipment, but we’ve had to hold on to them because new ones aren’t available.
Steve DeWeese: For us, the impact on supply chains has been significant, both in terms of pricing and availability of materials. The unpredictability of supply chains has also impacted both the duration and completion of projects.
Dave Offerman: Fortunately, we have longstanding relationships with very good suppliers, both overseas and in the U.S. For the last 18 months, we’ve had constant communication between our purchasing folks, production folks and key suppliers. We haven’t seen any meaningful delays or interruptions in the supply of our inputs for raw materials.
Cassandra Gluyas: We are contending with a global shortage of components in the electronics manufacturing industry. Although I’ve been expanding our suppliers, it’s been hard to find some of the parts we need, even within that larger group. It’s been a challenging year.
Logistics Management: Note to CEOs: Your Supply Chain Issues Will Not Fix Themselves!
Whether the pandemic has helped workers reevaluate and reprioritize their needs and wants, or that there really is a reduced workforce due to the baby boomers leading the Great Resignation, it remains true that in 2022, workers will drive talent search and retention.
Workers have shifted priorities, including a need for great company culture, increased wages, better overall compensation, and an ideal work-life balance.
Kiplinger: Workers Expect Higher Salaries and More Perks in 2022
Inflation has driven wage increases, causing employers to dangle the proverbial carrot in the form of signing bonuses and retention payouts.
READ: Vistage Points of View: How Are You Handling Inflation?
Many business leaders are struggling with the one-two punch of rising wages and talent scarcity. We asked four CEOs to share how their businesses have been impacted by the wage increases.
Have wage increases impacted your business?
Miller: We’ve always paid our employees above-average for the industry, so our wages haven’t changed, aside from yearly increases. When we get someone who is a great fit, we make sure we keep them.
DeWeese: It’s a competitive market for talent, from laborers to leadership. We’ve had to increase wages to remain competitive in the marketplace and we’ll likely need to continue to do so.
Offerman: Wage increases have impacted us for a while; even before the current labor shortage, minimum wage increases were impacting us. But we’re able to pass along those costs without causing too much pain.
Gluyas: Wage increases haven’t really impacted us. Each year, we give annual bonuses based on how much the business made. This allows us to tailor amounts to how good or bad the year has been.
To retain valuable employees and attract new talent, companies should focus on company culture, work perks, work-life balance, and exhibiting genuine concern for workers’ wellness and overall well-being.
In lieu of more payouts, bonuses and salary increases, many companies are opting for shorter workweeks to cut expenses. This option can also help an employee feel appreciated and valued and have a better sense of work-life balance.
Workers are much more concerned about their overall wellness, so a company culture that makes them feel included, supported and genuinely cared for can be of extreme value to job seekers.
In 2019, 47% of workers cited company culture as their driving reason for looking for work, and that percentage may be higher in 2022.
Shoring up and correcting weak points, continued focus on excellent communications and mutually beneficial relationships, plus building an attractive company culture that values and compensates its employees are three huge ways business leaders can elevate themselves in 2022.
UP NEXT: 5 Tips for Leading Through Inflation