Updated: May 28, 2020
“The global Coronavirus pandemic has caused uncertainty that many of us have never known. In the following months, as people and businesses begin to get back on track, the role of the CEO must evolve if they are to align their brand and see profits rise.”
Said Maria Hvorostovksy, Founder & CEO HVO Search
Our world has been turned upside down as a result of the Coronavirus pandemic and none of us know how this will shape businesses when we get back to ‘normal’.
Before people began social distancing and working from home, we were able to squeeze in one final HVO Search networking event, where we discussed the changing landscape of leadership roles in Fashion, Beauty, Luxury and Lifestyle. (At the time, we didn’t fully realise how much of an important topic this would be!)
We brought CEOs, Founders and investors together at our Women Who Win breakfast, to discuss how the CEO role has evolved and why this makes it harder to successfully turnaround a business.
The Goalposts Have Moved
“CEOs today need to be more resilient than ever.”
said Suzanne Harlow ex-CEO of Jack Wills.
Forget spending the first 90 days observing, meeting and learning about the business.
The timeline has compressed dramatically and now CEOs are expected to make immediate recommendations about strategy, service delivery, the P&L, team, culture, relationships, governance and process.
This gives the new CEO less breathing room and puts them under pressure to make fundamental decisions in the first 6 weeks, instead of what used to be the first 6 months.
“To be successful, you have to perfectly align everyone’s DNA. You need to bridge expectations and mindsets”.
Marie Leblanc de Reynies CEO, Victoria Beckham.
Assuming the new CEO is able to hit the ground running, they then need to manage up and down at breakneck speed to align all stakeholders:
Aligning the “DNA” of everyone involved in the brand’s success is fundamental to ensuring the brand stays authentic to its roots as well as pushing its boundaries to become more successful in its present and future.
Sophie Charbonneau, CEO of Varana echoed Marie’s thoughts by saying,
“When relaunching or buying a brand, it is very important to respect the DNA of the company, so customers can immediately feel and recognise the spirit of the brand.”
Given the current economic situation and global uncertainty, investors are reluctant to spend money investing further in the business without evidence that the P&L is moving in the right direction.
The ‘chicken and egg’ situation then arises where CEOs aren’t given the financial tools they need to solve problems, but the investors won’t release those resources until they start to see a return.
Investors in addition typically have sight of what’s happening at Board level only, and don’t have visibility of some of the day-to-day challenges faced by the CEO when setting KPIs.
The other challenge faced by many businesses is having the wrong investors.
For example, those who don’t understand the brand or market, thereby ultimately undermining what the CEO is trying to achieve.
As Ranjit Munro, MD at Lazard underlined:
“Fashion and finance need to be partners to make it work”.
Tracey Huggett Ex-MD, NEO Investment Partners added
“Fashion entrepreneurs do expect some kind of resonance to be demonstrated by their financiers.”
The biggest challenges facing CEOs in 2020 (and how to solve them)
Even if what everyone wants to achieve is crystal clear and theoretically attainable, the day-to-day variables that undermine the CEO’s ability to succeed are more numerous than they have ever been:
1. What the consumer wants is drastically evolving
Changing shopping habits and generational shifts are having a massive impact.
As Tracey Huggett Ex-MD, NEO Investment Partners noted,
“just look at the three most notable recent entrants into the LVMH Empire: Virgil, Rihanna and Stella McCartney.”
Brands currently thriving in the market are those who have shifted from B2B to B2C sales. Those who have pivoted from ‘selling’ to ‘listening’.
Instead of a 'push' sales approach, digital platforms are being used to focus on 'pull' mechanisms to engage with consumers. This requires a whole new way of working - new talent, new organisational structures, new technology, new processes and new brand strategies.
2. The constant need to advocate
Today if you ask someone to do something they want to know ‘why’.
Emma Mortimer MD, The Outnet highlighted:
"The CEO needs to maintain the momentum in the present, as well as reflect on the past and plan for the future. It is the role of the CEO to make sure that strategic planning aligns not only with numbers and brand positioning, but also the values and mission of the company."
Marie Leblanc de Reynies CEO, Victoria Beckham agreed:
“Statistics provide a stable set of resources that everyone can agree on. But sometimes proactive action needs to be taken quickly, especially during times of crisis.”
What most employees don't appreciate is that the CEO is in a unique position to assess what’s happening outside the business (the ‘results’), and also what’s happening inside (the ‘costs’).
In order to achieve sustainable profits and investor return, everyone needs to be moving in the same direction.
Given the average employee has limited perspective on what’s really happening, the CEO needs to continually advocate and present the proposed path to those who are to be held responsible.
As Sandra Mertens CEO, Lulu Guinness pointed out:
“Yes you want your employees to be happy, but they also need to be held accountable for delivery of the brand’s KPIs.”
While it may not be necessary to get into the numbers, being transparent about what is known and how things have been interpreted is likely to gain trust and encourage greater ownership of the proposed solution.
KPIs will likely need to change as a result, and it is important for CEOs to appreciate that the change curve and associated resistance is an inevitable part of the process, regardless of what’s being proposed.
The amount of time needed to communicate and manage these changes should not be underestimated. The CEO in charge will need to delegate or take on some of these responsibilities to ensure things remain on track.
3. Low employee engagement
The challenge for the CEO trying to turnaround a business in a very short space of time is that you can’t do it all by yourself. You need commitment from everyone around you.
Therefore, it can be challenging when employees are not prepared to put in a little extra effort.
Suzanne Harlow ex-CEO, Jack Wills observed:
“When a business is in a state of crisis management and leaders are seen to be absent, the team starts to question how committed they are to turning the business around.”
Having a clear employee engagement strategy for change-weary employees will be vital.
Employees are more motivated and engaged when they have:
Leadership that gives a ‘strong strategic narrative about the organisation’
Visibility of the management team, and can see that what they say is what they do
Line managers who motivate, empower and support them
A degree of autonomy and adequate ‘voice’ - leading them to feel they have a degree of involvement in decision making
As Charlotte Semler, Co-Founder of Votary explained:
“quarterly ‘listening’ sessions can often really resonate with employees”.
4. A weak leadership team
Our audience acknowledged that too often people operated at a level below their job title, which led to the CEO getting embroiled in micro-managing issues that should have been taken care of by their directors.
As a result, the CEO is often expected to spend much of their time mediating or providing life coaching.
Sophie Charbonneau, CEO of Varana commented,
“this can take up more than 50% of your day, and distract from the business at hand that needs to be dealt with”.
Ranjit Munro, MD at Lazard agreed:
“It’s like parenting - and these are the sort of daily struggles investors are unlikely to see”.
Having the right team allows the CEO to get on with turning around or growing the business, and do the job they were hired to do.
Tracey Huggett Ex-MD, NEO Investment Partners observed:
"It’s also the shareholders' responsibility to help get the recruitment side right so the brand can build a team that delivers”.
The good news is that it only takes a few senior hires to transform a business.
Sometimes tough decisions have to be made, and the more managers you have onside that can also proactively manage their people, the more effective the change will be. So it’s worth taking the extra time to do extra due diligence and a full search of the market for key roles.
Furthermore, your needs and priorities may have dramatically changed in the last few weeks. Consider hiring an interim CEO consultant who specialised in crisis management, whether this is someone to bounce ideas off once a week, or someone full-time to help you navigate through the storm.
5. Evolving job descriptions
These days as a CEO you’re not just expected to strategise and execute, you also have to continually adapt your thinking and ways of working.
You need employees who can do the same.
Long gone are the days when a job description was set in stone, and employees carried out the same tasks year in, year out.
People need to be encouraged on a daily basis to commit, think and take the initiative, not just function on auto-pilot.
Uncertainty is the new certainty, so a culture of continuous improvement and pushing the envelope will ensure brands are able to stay one step ahead.
We talk about how to find leaders who can adapt to and embrace change in Episode 2 of our Hiring Series.
6. Outdated tech
Heritage brands may know where they want to get to, but legacy systems can make such a shift almost impossible. In this way, smaller, newer brands are at a significant advantage and can remain more agile.
Often what needs to be done can in theory be turned around in just a few weeks but it is not always this simple:
Lara Mazzoni, Co-Founder & CEO, Bodi Me explained that
“due to the ‘spaghetti system’ that evolves in large organisations it can take months to untangle things and get traction”.
Old technology can result in problematic data silos, where business opportunities fall through the cracks as a result.
Where possible, existing providers should be asked to update their software to ensure it remains relevant and useful.
If not, they should be prepared to replace them.
Make sure any technology models you are using are helping your business become more efficient and not taking away the time and attention of your employees.
Ultimately though, the only solution may be to explain the impact the outdated software is having on the P&L, and ask investors to stump up more cash for an integrated system.
The CEO is in a unique position to see opportunities that others don’t.
While they are ultimately accountable for the performance of the company they cannot turn things around or achieve sustainable growth on their own - so having a solid team around them and being able to inspire the workforce is critical.
Investor expectations should be challenged where timelines for delivery have become unrealistic and adequate tools are not being provided to help the CEO solve the problems they’re been brought in to fix.
As Maria Hvorostovsky, Founder & CEO of HVO Search, highlighted:
“when we do a search for a CEO there are so many variables to take into account. The brief can vary dramatically - with some more focused on the internal and operational, and others having significant work to do with external stakeholders and customers. The key is to ensure all parties are in agreement about what they need before they hire someone.”
Charlotte Semler Co-Founder, Votary
Emma Mortimer MD, The Outnet
Lara Mazzoni Co-Founder & CEO, Bodi Me
Marie Leblanc de Reynies CEO, Victoria Beckham
Ranjit Munro MD, Lazard
Sandra Mertens CEO, Lulu Guinness
Sophie Charbonneau CEO, Varana
Tracey Huggett Ex MD, NEO Investment Partners
Suzanne Harlow Ex CEO, Jack Wills
At HVO Search, we place leaders who share your brand’s values, mission and ethics. During this crisis, we are also placing experts in crisis management in interim CEO and C-Suite roles. If you'd like to find out more, please get in touch.