7 MAJOR DIFFICULTIES

Being a CEO has recently become even more difficult than ever. Because the number of problems that they have to deal with keeps on growing. For example, when it comes to the difficulties they have to cope with, Omsan General Manager Osman Küçükertan‘s lis

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1UNCERTAINTY IS CREATING DIFFICULTIES

Uncertainty has now come to head the “list of difficulties” facing businesspeople. Many sectors, from construction to retailing, share the same concerns. For example, the issue is on the agenda of Yıldırım Group Board Chair and General Manager Yüksel Yıldırım. Yıldırım groups the difficulties he has recently been facing under three main headings and explains how he is tackling them as follows: “Our group is trying to deal with the difficulties by being proactive. Our package of short-term solutions is headed by cost control and improved efficiency. Increasing efficiency and productivity is at the top of our agenda. When it comes to overcoming the difficulties we are facing in terms of sales, we are not resorting to slashing prices in order to increase sales volume. We are looking to selected customers in niche markets and our commercial activities are focused more on profit margins than volume. We have reduced our production capacity in order to avoid the risk of oversupply.”

2THE STRUGGLE WITH COSTS

The increase in the minimum wage and the rise in the foreign exchange rate have resulted in a significant growth in all companies’ costs. For this reason, the struggle with costs is one of the most important difficulties facing CEOs in 2016. Omsan General Manager Osman Küçükertan stresses the same issue and adds:

“The introduction of the new minimum wage has not only affected those on the minimum wage but has also had a knock-on impact on other employees as well. This situation has resulted in a significant increase in total labor costs, particularly in labor intensive sectors. At Omsan we have introduced some innovations and improvements to our processes in order to increase efficiency. Within this context, we are conducting analyses of the processes, eliminating those processes that don’t produce any added value and developing effective and innovative business models.”

3THE UNPROFITABILITY SYNDROME

Another issue that is making life difficult for CEOs is the lack of profitability. This is particularly the case in the retail sector… Makro Market Board Chair Mehmet Songör confirms that excessive pricebased competition and the unprofitability syndrome are important problems. Songör continues as follows:

“In recent years there has been an increasing contraction of the market in the retail sector. This is a situation that is difficult to manage and it is making serious problems for businesses. What needs to be done in this situation is to avoid making the wrong investments and to avoid high costs. For the sake of the future of the sector, it needs to treat this as an opportunity. I think that the sector needs to focus on efficiency rather than growth. If not, then the future of the sector under serious threat.”

4PAYMENT TERMS ARE INCREASINGLY LENGTHENING

The negative impacts of uncertainty, fluctuations in the foreign exchange rate and rising costs have naturally been reflected in payment and receivables processes. As a result, one of the most significant problems that CEOs have to manage is the lengthening in payment terms… Boydak Holding Board Chair Mustafa Boydak says: “Payment terms are usually 30 or 60 days. Let’s say a maximum of 90 days. But we see that in some sectors there are transactions with payment terms of 12 or 18 months. This is very dangerous. Moreover, the payment terms are growing this long without any form of bank or financial guarantees. This should not happen. If it does, then the consequences could be severe.”

5THE CASH FLOW BALANCE

Another critical issue that is giving CEOs and bosses food for thought is the cash flow balance. Boydak Holding Board Chair Mustafa Boydak stresses this risk and explains the solution as follows:

“The most important mistake in our industry is for companies to use short term funds and short term loans to make long term fixed investments. This constitutes a very big risk in times of turbulence. In fact, we are very sorry to see that companies which have made this mistake are experiencing serious financial difficulties. No company can ever go bankrupt because of its debts on loans. Companies go bankrupt because they have not secured a steady cash flow. They should definitely use financial instruments.”

6THE MANAGEMENT OF THE NEW GENERATION

Another issue which is currently creating difficulties for CEOs is generation management. In particular, managing the adaptation of Generation Y and the difference between generations has become critically important for many professionals.

İpekyol Board Chair Yalçın Ayaydın is one of those who is focusing on this problem. “A lot of the employees in our company are from Generation X and Generation Y,” says İpekyol Ayaydın, noting that members of Generation Y are playing an increasingly influential role at management levels. “On the other hand, this generation has its own peculiarities and special characteristics. This means that, in order to manage the abilities of the members of Generation Y in the most effective way, we have to harmonize and strengthen their communications with Generation X.”

7WORKING PRODUCTIVELY

The seventh difficulty that CEOs and bosses are focused on is productivity. But this is not so easy. İnoksan Board Chair Vehbi Varlık says: “Productive output needs very flexible production systems and dynamic human resources. These are difficult to acquire and to manage. Adaptation requires the continuous updating of processes, procedures and directives. We are trying to overcome these difficulties through investments in technology, quality and information systems.”

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