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There Be Dragons: Three Things That Keep Today’s CEOs Up At Night

Forbes Technology Council

I am the co-founder and CEO of Azul, with 30 years of experience as an entrepreneur and executive in the technology industry.

As today’s business leaders adapt to an uncertain future, the traditional concerns of a CEO only make up part of the picture. Beyond the responsibilities everyone knows about—setting a strategic direction in a chaotic economy, employee morale and retention, acquiring new customers and driving product innovation—lurks a host of challenges that often don’t register as problems until it’s too late.

The most successful CEOs—those who create lasting value—are the ones capable of driving topline aspirations while avoiding pitfalls that can derail growth. Below are three hidden dangers CEOs must spot before it’s too late.

Cybersecurity Risks

At the top of that list is protecting against cyberattacks. Ensuring the security of a company’s applications and data goes beyond a technical issue—it should be a cross-functional concern at the highest levels of the organization. Last year, an IBM study found that the cost of a data breach averaged $4.24 million, the highest in the 17-year history of the report. That number is deceptively low because most of the breaches studied were relatively small. The average cost of a mega-breach (between 50 and 65 million records) was nearly 100 times more expensive.

To compound the cyberattack problem, the average time to detect and contain a breach was found to be 287 days, one week longer than the prior year. Vulnerabilities sat undetected for an average of nearly seven months, and it took another 75 days to contain them.

CEOs must push their security, technology, risk and compliance leaders for a more proactive approach or risk these breaches sending shockwaves throughout the business. Employee morale drops and customers feel betrayed, not to mention serious financial penalties and big hits to the stock price. Leaders who don’t prioritize data security can even find themselves out of a job.

Out-Of-Control Cloud Costs

Along with security concerns, cloud infrastructure costs represent another first-class metric for chief executives. In their 2021 study, partners from the VC firm Andreessen Horowitz estimated that across the 50 top public software companies, $100 billion of market value is being lost due to the cloud’s impact on margins. Across all public software companies, the figure is even higher: an estimated $500 billion.

A cloud cost strategy helps business leaders think about how to use cloud resources efficiently, how to organize internally around cloud awareness and how to optimize cloud deployment practices to maximize performance and keep costs low. Companies that get all these things right will rocket into cloud maturity—with improved margins, profitable growth and all the benefits that category leadership entails.

Those who fail to implement a cloud cost strategy will find themselves in a world of pain. Gartner has said: “Organizations with little or no cloud cost optimization plans rush into cloud technology investments. They end up overspending on cloud services by up to 70% without deriving the expected value from it.”

In short, using the cloud to drive innovation is a foregone conclusion for most enterprises. But doing so without a plan to optimize costs is just inviting trouble.

Misalignment Among Technology And Business Leaders

Businesses’ mandate around digital transformation has created an atmosphere where technology decisions make an outsized impact on the top (and bottom) line. But in the executive suite, there isn’t always agreement on how technology spending delivers value. Technologists and business leaders often hold different priorities, so the CEO must step in to ensure everyone stays aligned.

Research shows that “only 30% of CFO-CIO relationships can be described as strong digital partnerships,” even though the same study found that strong relationships between those two camps have clear positive outcomes for the business. When those finance and tech camps are speaking the same language, companies are “51% more likely to easily find funding for digital initiatives,” “39% more likely to keep digital spending in line with the budget plan” and “18% more likely to achieve the intended business outcomes.”

It falls to the CEO to ensure that technology leaders are business strategists (not just budget owners) and that finance executives are growth-focused investors (not just accountants).

Successful CEOs must ensure their entire executive staff has a shared understanding of how technology investments impact the entire balance sheet, then align these constituents to drive positive outcomes.

With so much on the shoulders of today’s CEOs, it’s tempting to delegate items to subject matter experts and focus on big-picture strategy. But these three potential pitfalls represent an existential risk to the business, and therefore, CEOs must identify and solve them before they turn into career-enders.


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