StanChart’s Rughani opens up on business trends to watch in 2023

QUESTION: For starters, what is your take on 2022 in terms of business and leadership trends?

ANSWER: 2022 has been a year mixed with both great positive growth, prospects and optimism in the business community following the full opening up of the economy in January after the Covid-19 restrictions. The positives notwithstanding, we are at the tail-end of a year that was filled with enormous ongoing global challenges like climate change, the rise in fuel prices and inflation which led to an increase in the cost of doing business. There were other challenges like the rising debt burden, the Russia-Ukraine war and the resulting supply chain disruptions, COVID 19 and local challenges like the Ebola pandemic and unemployment challenges, among others.

In my current roles as CEO of Standard Chartered Bank Uganda and Chairman of the Professional Accountants in Business Advisory Group (PAIB AG) of the International Federation of Accountants (IFAC); I have had the distinct honour of interacting with several business and global leaders across the world and locally. From the same interactions, the common view is that 2022 has been quite a turbulent year to which I attest.

The other general sentiments were that the world has become much faster due to technological advancements, the business environment is tougher and there are constant changes in the regulatory and political landscape leading to most business leaders having to deal with harder business tradeoff decisions to sustain and grow businesses.

What will be some of the key trends that will dominate 2023 and beyond that leaders should prepare for?

There will be a myriad of trends from the social and economic spheres. However, allow me to focus on four (4) critical business and leadership trends that we are likely to witness in 2023.

First, we need to accept and normalize uncertainty, volatility and crises as part of life. Like Benjamin Franklin once aptly stated; ‘Change is the only constant in life.’ Therefore, leaders’ abilities to adapt to those changes will determine their overall success.

Successful business leaders in 2023 will have to adopt a stronger growth mindset, empathize more, practice more candid communication, accept that we will not have answers to everything and therefore build muscles for ambiguity management, embrace resilient practices and appreciate worst-case possibilities through scenario planning.

Secondly, a key trend to keep tabs on is around technology & digitization: The wave of technology continues to radically transform people’s lives and livelihoods. Businesses will therefore need to extend their focus on smartly adopting technology. Leaders must also take time to understand and evaluate the potential and implications of what I call the ABCDEs of technology i.e. Artificial Intelligence, Blockchain, Cloud computing & Cyber, Data and E-Commerce. Wise adoption of technology and digitization will remain key to business success as it enhances better accessibility, drives agility, improves productivity, significantly supports cost management for business sustainability and provides massive opportunities for scaling up and transformation.

The role of leadership fundamentally changes when it comes to technology and digitization. Businesses will inevitably transition to new cultures and behaviours due to the need to support more creativity and innovation, the need to extend the talent pipeline with the right skills to optimize organizational potential, the need to adopt and practice agility, as well as the need to build and support capabilities of curiosity and self-disruption and finally the need to extend tolerance for risk.

Thirdly, the changing landscape of the workplace and talent is a trend that will continue to create ripples in 2023. Business leaders will need to spend more time thinking about talent engagement; integrating and serving the new generation since about 78% of Uganda’s population are youth below the age of 30 most of whom, don’t know life without the internet or social media. Evaluating ‘Generation Z’s’ (born after the mid-1990s) behaviours, spending patterns, work culture, learning approaches, passions and interaction models etc will be a critical business trend.

Their attitudes and priorities are characterised by the attitude of being born free, having equal opportunity, being change-driven, ability to challenge the status quo and having their voices heard. Most Gen Z’s are willing to embrace more disruption and be involved in co-creating. Unfortunately, we do not have enough employment and entrepreneurship opportunities to maximize their potential. The reality is Gen Z will continue to become a bigger part of business and society decisions and therefore, there is a pressing need for leaders to wake up to this reality more consciously and create policies and strategies that are reflective of this emerging trend.

Diversity & Inclusion as well as an organizational culture will also become a core part of business strategy and values in 2023 as inclusive leadership and work culture directly enhance performance, improve psychological safety and drive higher employee retention.

This is critical in a world that is so greatly riddled by uncertainties, changes and opportunities too. Leaders must set the tone from the top on this agenda by being purposeful to related organizational ambitions.

Creative human capital management concepts like hybrid working are also going to be key trends in 2023 as technological interventions now allow for working from Home or working from Office without compromising productivity. Leaders will therefore need to horn their soft skills like building trust, and emotional intelligence to effectively lead a productive workforce that is self-managing.

Lastly, Partnerships & Alliances will be critical. A conducive business environment with a stronger motive and cooperation to drive prosperity will be the cornerstone to driving economic growth and optimising these revolutionary times.

Smart leaders understand that in order to remain relevant, expand operations and accelerate speed-to-market in an increasingly dynamic and digital world will require businesses to make connections, strive for synergy and optimize collaborative brand potential.

In 2023, we will therefore witness businesses engaging in more strategic ‘give and take’ partnerships to create collaborative value. Leaders practising this approach are already seeing improved influence, increased penetration, more profits, higher customer satisfaction and retention through cooperation and co-creation.

All these trends present both opportunities and risks. What are some of the risks that leaders ought to look out for? And what do you advise leaders, to do to hedge against some of these risks?

Most of the risks leaders need to contend with are part of the challenging operating environment that includes; inflation and economic downturn, increased cyber risks, climate change-related risks, increased customer and stakeholder expectations, growing regulatory intrusion, data management and governance, a workforce that is constantly playing catchup to rapid technological change, global political instabilities and a growing debt burden on governments, corporations and individuals among others.

Hedging against external factors in business is not a ‘one bullet’ solution. It requires all stakeholders to pull their weight towards finding solutions, creating an enabling environment and for businesses to continuously evaluate, strategize and re-strategize.

Leaders will need to be wise to navigate the compounded risks as there is no shortcut to ensuring preparedness. This requires doing scenario analysis, having good risk mitigation plans, extending awareness and knowledge on risks in the organization, having diversified business value streams, being security conscious, taking a hard look at the business portfolio and optimizing it and having a strong tone from the top on risk compliance.

The overall risk environment over the past few years has certainly proven to be challenging and demanding but the resilience shown by many businesses and their leaders is indeed commendable, we should continue to be more and better prepared as days ahead of us are not going to get easier.

Sustainability/Environment, Social and Governance (ESG) and especially climate change is a bolder re-awakening for businesses – how will this pan out in 2023 and beyond? What do you have to say for businesses that are not yet taking this as a big issue? Will we see climate change become a deal-breaker in 2023?

Today more than ever before, ESG has become a moral imperative, a great source of leverage and an opportunity, as it not only makes a difference where it matters the most i.e. reversing the deadly effects of climate change, but it also represents a growing source of income for businesses.

The Covid pandemic gave us a taste of what a global disaster looks like. However, this could have been a dress rehearsal for a much larger crisis looming ahead for humanity and that is the threat of climate change!

Unlike a pandemic, climate change reversal can’t be remediated very fast, and yet the earth is warming faster than was previously envisioned and the window to avoid the catastrophic outcome is quickly closing.

Therefore, all stakeholders must come together very quickly to not only flatten the curve of Carbon emissions but to bring them down to net zero to avert the climate pandemic.

While all of us at an individual level should play our part in this endeavour by changing our habits and lifestyles to reduce our personal carbon footprint, this can only go so far. We need system-level solutions through partnerships between the government, the private sector and development organizations for effective and permanent change.

The banking, finance and investment communities are currently playing a critical role in facilitating investments in renewable energy solutions and carbon-neutral technologies. These sectors have started to integrate environmental and sustainable development criteria into their lending and investment decision-making processes so all futuristic businesses that will survive in the medium to long-term need to prioritize ESG.

As Standard Chartered Bank, we have over the years committed to minimizing the environmental impact associated with our operations to the greatest extent possible and seek to improve our environmental effects management. We, therefore, have an “Accelerating Zero” agenda where we aim to help reduce carbon emissions as fast as possible, without slowing development, to reach net zero in our operations by 2025 and in our financed emissions by 2050. Globally, as a bank, we are committed to mobilizing USD 300 billion in green and transition finance by 2030 to support our agenda of achieving a just transition.

It has been our goal as a Bank to integrate the concept of sustainable development into all our business operations through our Environment and Climate Change Strategy which addresses two elements of our overall approach to building a sustainable business, and that is, Protecting the Environment and Sustainable Finance.

For leaders, driving responsible businesses is a call to action. There is a need to commit to ESG as it is critical for prosperity and survival. The concept of “corporate purpose” is an essential mandate for all business leaders and boards.

Organizations should therefore align, simplify, own, reward and exemplify their impact-led organizational mission.

In conclusion, as one of the leaders, I am inspired by Peter Kimbowa who once told me “the diet of a brain, is the company of good people.” as I settle down in Uganda having moved from Tanzania 5 months back, I do look forward to meeting more good leaders in 2023.

I wish you all a Very Happy and Prosperous 2023!