Today, leaders' agendas of leading Latin American companies are full of unprecedented challenges. The global market faces increasing economic pressures, talent deficits, changes in business models, higher energy costs, and cybersecurity threats, not to mention new demands from customers and clients every day.
How should CEOs deal with these challenges? In most opinion articles, recommendations usually focus on "resilience." However, I believe "audacity" is the term that should be in every Latin American leader's mind. Beyond the capacity to adapt and survive in turbulent times, there is an opportunity for companies in the region to take advantage of this global vertigo to reduce the competitiveness gap with more mature markets. It is necessary to open up new approaches to succeed.
Companies operating in the region face a combination of critical factors disrupting virtually every aspect of the business. In particular, the COVID-19 pandemic has generated weak economic growth worldwide, along with inflationary rates not experienced by stable economies in decades and the disruption of global supply chains. Moreover, the war in Ukraine has brought further pressure on these vectors and generated new obstacles, such as higher energy costs in Europe. In this context, the political environment in Latin America has also created a challenging environment for companies.
All these economic, political, and social pressures created additional challenges in attracting investment and required higher levels of productivity and efficiency from companies. Additionally, currency fluctuations have hindered pricing strategies. Therefore, companies must take bold steps to address these challenges and seize the opportunity to close competitiveness gaps with more mature markets.
ESG: Unique Opportunities for Latin America
Latin American business leaders face a unique opportunity to incorporate sustainability strategies. The region can lead the change toward a more sustainable and responsible model in a world increasingly aware of companies' environmental and social impact. It is essential for sustainability to be the guiding thread of the business strategy for companies in the region to seize this opportunity. This means ESG initiatives must be integrated into all operating practices, including investment in new technologies, customer service, production processes, governance structure and transparency, communication processes, and talent management. Achieving this transformation will require a bold new vision, possibly impacting the company's business model. But if implemented successfully, incorporating ESG strategies can drive Latin American companies' sustainable growth and development.
Talent: Embracing People Centricity
Talent is a critical issue for every organization and should not only be addressed by the CHRO and the People Management area. The challenges faced by Latin America are tremendous. A severe lack of skilled talent, especially in digital profiles, leaves millions of unskilled people out of the labor market. Furthermore, the pandemic has generated changes in work models, from fully remote to hybrid work.
In contrast, new generations have a different perspective on the purpose of work and the reasons behind their choice of a particular organization. To address these challenges, companies must adopt a strategic approach to talent management that engages with all areas of the organization and aligns with their business strategy. Once again, boldness takes center stage. Instead of strategizing to attract and retain talent or adapting old management models to modern times, it is time to adopt a people-centric approach. This means embracing diversity and inclusion, rethinking people-related processes, and, most importantly, developing initiatives that contribute to upskilling and fostering regional growth.
Emerging Technologies: Accelerators of Transformation
Emerging technologies are key allies in counteracting these challenges. Edge computing, for example, brings speed and scalability to distributed environments by allowing data processing where it is generated. Biometric solutions, meanwhile, enable significant advances in data protection and information security. Automation, advanced robotics, virtual reality, quantum computing, digital twins, the metaverse, and, of course, artificial intelligence contribute to driving the required transformation. A recent study conducted by Harvard Business Review Analytic Services in association with NTT DATA found that 90% of CEOs consider its adoption to be important or very important in the upcoming years to obtain business value, gain productivity and efficiency, increase brand reputation, improve customer knowledge, get insights for data-driven decision making and even predict scenarios, an essential point considering the uncertainty of our current context. However, we must maintain sight of the fact that technology is only an enabler. Latin American companies must advance on deep transformation processes to obtain tangible results, involving the entire organization and even daring to review the company's vision and mission to verify that they are in line with the demands of society.
Suppose the region's CEOs advance with strategic vision and audacity. In that case, we will begin our analysis of the upcoming year by saying: "The leaders’ agendas of large Latin American companies have never been so full of opportunities."