3 Challenges You as a CEO Will Face in 2017

2017 has commenced both full of outstanding promise and a few potential pitfalls.

In discussions with CEOs, Chairpeople, and Directors I have identified 3 main challenges that many firms are confronting this year and can be of consideration for your organization as well.

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In 2014 Tom Petty had the No. 1 Spot on the Billboard Hot 100: Why Your Metrics may no Longer be Working

In June 2015, the number-one Billboard album in the United States was not Beyoncé, nor Jay Z, nor Taylor Swift, nor any of the other artists that the radio, MTV, and streaming systems around the world are inundated with: it was from James Taylor, the folksinger, who while very talented, just isn’t normally top of mind as the number-one Billboard artist as measured by sales.

What’s going on?
David Graham,in his excellent article in the Atlantic on June 25, 2015, notes that technology has changed how people consume music and how consumption is measured, and that demographics of customers have shifted the formerly platinum-standard Billboard Hot 100 into a strange time warp where Tom Petty and the Heartbreakers, Tony Bennett, and Weird Al Yankovic are now topping global mega crowd-pleasers such as Taylor Swift and Beyoncé.

The music business raises many passions and has even more opinions about what is good, what is hot, and what is not, but one lesson we can take to the boardroom and to strategic management leadership is this:

If the music industry continued to use only the Billboard album charts as a bellwether, they would be considering artists whose careers peaked in 1968 as where to most suitably invest their money for strategic success tomorrow.

What worked well in the past as your strategic performance indicator may not necessarily work well tomorrow

While setting strategic performance indicators may seem like a routine task, its importance can be demonstrated simply by looking at what is going on in many industries and learning from examples such as the music industry and the formerly rock-solid Billboard charts. I have had the privilege of working with a number of leading global organizations on resetting their SPIs (strategic performance indicators), and here are three takeaways that have made my clients more successful:

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Airbnb now has a Market Valuation Higher Than Marriott Hotels

Airbnb—the web portal that enables the renting on a short-term basis of properties—has a market valuation today estimated at more than US$24 billion—surpassing the 1927-founded Marriott group that manages close to 700,000 rooms in 187 countries.

While there are many interesting considerations to discuss here, it is the speed with which this occurred that is certainly most disruptive. Airbnb is a startup founded in August 2008—it has yet to reach its seventh anniversary of operations—while Marriott has been operating continuously for close to 90 years. And unlike Marriott, Airbnb doesn’t actually manage, operate, or own even one bedroom.

Interestingly Italy, which is one of the countries where chain and group-flagged hotels have had the most difficulty in penetrating the market profitably, is now the third largest market in the world for Airbnb, according to a report they released (the United States and France are first and second, respectively). In Milano for example, the company recorded a fourfold increase in bookings in 2015 compared to the same period of 2013 due to hosting Expo 2015. Italy proved to be particularly welcoming for Airbnb because the web platform has solved the long-term challenge of how to successfully match supply and demand for short-term accommodation.

Economists, labour experts, politicians, and many other groups are discussing both the positive and negative effects of the “sharing economy” and how it will reshape society in the upcoming decades. A different series of strategic questions you may want to be asking regarding your business units and portfolio are:

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You Must “Own the Product” for Long-term Success

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Customers of the Future- Decide Which Customers You Must Attract

The casualty list of failed companies that focused on pleasing the customers they had as opposed to targeting their customers of the future continues to grow. Meanwhile- in a much more inspiring and interesting story- a company focusing on their customers of the future continues to delight investors and target customers alike.

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