2023: Business Volatility With Slower Growth… And Books I Loved This Year
2022 was a tumultuous year. High inflation, an overdue stock market correction, and continued increase in interest rates. Most CEOs see a slowdown ahead and so do I.
In January we will publish our annual Predictions report, so in this article I want to share perspectives and give you my favorite books to read next year.
The first thing to expect in 2023 is more volatility. As we exit the Pandemic and industries continue to merge, every company feels threatened by some disruptor. Google is worried about GPT, Netflix and Disney see streaming on the wane, and even consumer products companies are feeling the slowdown from inflation.
I can’t think of an industry that isn’t experiencing an acceleration in its transformation. Healthcare is suffering from a talent shortage and immense increase in demand. Banks are continuing their slow efforts to transition to digital platforms (one estimate says that 85% of computing is still on-premises). And energy companies are constantly dealing with oil price changes and the growth in hydrogen, solar, batteries, and electrical distribution. Is there a company out there that doesn’t feel disruption?
And while all this continues, the economy is slowing down. Our fifteen year experiment with near-zero interest rates is over, and consumption is slowing as a result.
Slowing Growth: Focus on Productivity and Doing Less With Less
JP Morgan and most other economists forecast a 1.6% GDP growth next year so it’s likely your budget and headcount will be flat. What that means is this will be a year to do two things: increase productivity and redeploy people into growth areas of your business.
Many companies are still struggling to hire (travel, entertainment, leisure), but for most of us this will be a year to focus on training (capability academies), internal mobility (talent marketplace), job redesign (team-centric organization design), and everything you can do to increase productivity.
The pandemic created a flurry of new tools, systems, and distractions (the number of employee systems in companies went up 42% in the last three years). This year you will want to consolidate, simplify, and focus.
While only about 40% of employees are “back in the office,” I expect a big push to formalize hybrid work. We’ve seen enormous interest in our Irresistible Employee Experience assessment as companies look for ways to reduce bureaucracy and make work simpler. Yes, offices will be radically redesigned, and this in itself will help drive intentionality and productivity. And a new breed of “workplace management” tools is coming (think scheduling, presence awareness, office configuration, space planning).
But there’s also a need to reduce clutter. As I used to say during the 2008 recession: it’s time to “do less with less.” And that includes, by the way, possibly working fewer hours. The 4-day Workweek project found that “work-time reduction” (paying people for 40 hours but working 32) greatly reduced burnout and had no negative impact on total work accomplished. Here in the US we work more hours than any other country, so just “telling people to work more” may not be the answer.
I discuss the value of “slack time” in my book Irresistible. Many studies have shown that giving people “free time” or “less work” increases productivity, output, quality, and customer service. Let’s spend some time next year really figuring out what is essential and what people no longer need to do. (I do like Elon Musk’s comments about cancelling meetings.)
And by the way, now that most families have two working parents, giving people flexibility is more than a “good idea.” It’s essential to making families function. (The Obama Administration studied this in 2014 and concluded very clearly that flexibility in schedule and work style was essential to business and economic growth.)
You’ll be happy to know that vendors like Microsoft are working with lots of tools to help. We’re past the stage of buying Zoom and Teams and scheduling hundreds of group meetings. Next year is a time to look at the data and shed the meetings that don’t make sense any more. (Microsoft’s new tools can measure the level of multi-tasking in a meeting, telling managers they are probably wasting people’s time.)
This also leads us back to tools for performance management. Largely overlooked for the last few years, new systems like Viva Goals, BetterWorks, WorkTango, Lattice, and others are coming back in favor, as companies try to help employees track and focus their goals with more precision and transparency. Google has redesigned its performance management process this year and is back to focusing on OKRs. again.
Performance management, by the way, has evolved over time. Today, as we enter 2023, we are entering an era of “Performance Enablement.” In other words, if the process does not improve performance, then why are you doing it? It’s not simply a way to weed out low performers, that was the old GE model. I’ll be doing a webinar on this in February featuring the talent team at Rivian, so stay tuned.
In the theme of doing “less with less,” the HR function will get more integrated this year. Our Four R model (Recruit | Retain | Reskill | Redesign – part of the Global Workforce Intelligence Project) is getting rave reviews and it’s all about thinking about HR as an “operating system,” not just a bunch of centers of expertise delivering services. We are going to detail this for you next year so come to Irresistible 2023 to hear the details.
Talent Intelligence vendors like Eightfold and Gloat will prosper this year, as companies look for integrated data systems to make this model work. I also anticipate a lot of growth in Next-Gen HCM platforms like Darwinbox, Unit4, ADP, and even ServiceNow (recently acquired Hitch and invested in 15Five), as companies realize that their core system of record may not adapt fast enough for change. (SuccessFactors new platform is also next-gen by the way.)
2023 is also a time to revisit your leadership strategy. We’re moving past the era of “flexibility and empathy” to focus on the hard edge: how do managers create clarity, simplicity, and growth? Companies are spending a lot of time on organization design, teach leaders how to rearrange teams around new platforms and better manage project-based work. We are starting a big study of “work productivity” and we’re already finding astounding results. A tech company, for example, unleashed more than 20,000 of surplus capacity by letting employees do “gig projects” outside their normal job description. This saved real money on external contractors. This is a new model for management, one that impacts the role of leaders in a significant way. (Read “coach not boss” and “work not jobs” in my book for more.)
Wellbeing will continue to be an issue, but I want to encourage you to think deeper. As the business environment tightens, it’s important to think about being a Healthy Organization, not just providing health and wellbeing solutions to your employees. Individual wellbeing is always important, but in 2023 we need to make the whole company healthier. (More on that topic here.)
And this is why I believe People Sustainability will enter the mainstream. I just talked with Heineken, Liberty Mutual, Cisco, and several other iconic companies and they have now reached a point where DEI, pay equity, wellbeing, and development are part of the company’s “human rights” or People Sustainability strategy. We are going to discuss this deeply next year but I’ve become a big fan. Great companies don’t just “hire people and grow.” They create a platform for steady, enduring, environmentally sound growth. Your people strategy should do the same.
It turns out these issues are high on the priority of CEOs. A recent PwC survey found that 45% of CEOs believe “people sustainability” will be a key to growth in the year ahead. In a world of inflation, cyber risk, global warming, and war, these are sound investments to create long term growth.
HR platforms and AI will become much more ubiquitous next year, and I expect you’ll have passive employee listening tools and talent intelligence platforms as standard checklist items in most large companies. Employee Experience design and workflow platforms will go mainstream, and this means the HCM platforms will step back in importance.
Your skills as an HR professional will be tested. It will be a year to sharpen your edge, learn about your industry, and dive deeply into your domain so you can really consult with the business. Every company will be searching for growth vectors, and a lot of this will come from our direct work with product, sales, marketing, and delivery teams. (Our #1 course in the Josh Bersin Academy is “The HR Consultant: A Masterclass” – I suggest you take it.)
It will be time for patience, inspiration, and teamwork. When the economy stutters we have to be agile, thoughtful, and deliberate. It’s not a time to rush into anything (hiring, redeployment) until the signals are clear. Work with your business teams, look at your people data, and focus on the development, mobility, and job redesign where it matters.
(Stay tuned for more details when The Josh Bersin Company Predictions launches in January. And sign up for Irresistible 2023, we have lots of surprises and the conference will sell out early.)
My Favorite Books This Year
Let me now leave you with some great business reading, since we all have some time to reflect. Looking back at my Kindle library, here are the books I loved and recommend.
Irresistible: The Seven Secrets of The World’s Most Enduring, Employee-Focused Organizations by Josh Bersin. My book is “ultra-relevant” to the year ahead.
CEO Excellence by Carolyn Dewar, Scott Keller, Vikram Malhotra. Fantastic book about talent, leadership, and organization design from the CEO perspective
Morality, by Jonathan Sacks. A truly inspirational book about values in society, and it will teach you about corporate culture.
An Immense World, by Ed Yong. An inspirational book about animals and vision, smell, and perception and a great way to broaden your respect for the world.
The Man Who Broke Capitalism, by David Gelles. An eye-opening book on the problems Jack Welch brought to business and a manifesto about how “not” to build an Irresistible company.
Bibi, The Turbulent Life And Times Of Benjamin Netanyahu, by Anshel Pfeffer. A study of one of the world’s most successful leaders ever born.
Eleanor Oliphant Is Completely Fine, by Gail Honeyman. An eye-watering story of a young girl dealing with adversity, one I will never forget.
After The Ivory Tower Falls, by Will Bunch. If you’re as frustrated with the education system as I am, this book will decode the problem clearly for you.
The Ride Of A Lifetime, by Robert Iger. An amazing and educational story of a business icon we can all admire.