VIA CEO Forum 2024 – Friday, August 23, 2024 – Hyatt Regency Valencia

Executive Summary:

On August 23, 2024, approximately 75 Santa Clarita Valley-based CEOs, Presidents, Business Owners, and Top Executives gathered at the VIA CEO Forum to discuss top issues identified through a multi-question survey circulated to SCV business leaders in mid-2024.

Through the survey, several topics were identified by Santa Clarita Valley based businesses as most critical for the next 2-5 years. The following three topics/questions were selected as top priority and included in the discussions at the Forum:

RISING COSTS: How are CEOs and other business leaders effectively navigating rising costs from Inflation, Minimum Wage, Insurance, Transportation, Fuel, and more?

AI: How are AI and Technology being leveraged for automation to remain competitive?

WORKFORCE DEVELOPMENT: How is lack of productivity and engagement, the shortage of skilled workers, hybrid work environments, complex cultures and generational conflict impacting business?

Below are the observations and takeaways of those discussions.

Rising Costs for Businesses: Navigating Challenges and Opportunities

As businesses face a wave of rising costs, from labor to materials, the landscape has become increasingly challenging—particularly for small businesses striving to compete with industry giants like Amazon. With Amazon offering $30 an hour plus benefits, smaller enterprises are grappling with how to attract and retain talent. This article explores the pros and cons of these rising costs, offering insights into how businesses can adapt and thrive amidst adversity.

Key Insights for Business Owners

Reassess Job Value: Small businesses need to emphasize the unique aspects of their roles. Employers should engage potential employees by asking, “What do you want in a job?” This dialogue can uncover motivations beyond just salary, such as career development and community impact.
Invest in Young Talent: Mentorship programs and investment in younger employees can yield long-term benefits. By cultivating skills and loyalty in the next generation, businesses can create a more resilient workforce.
Innovate Operational Strategies: Businesses are finding creative ways to manage rising costs. For instance, some are cutting back on hours to reduce utility and staffing expenses, while others are leveraging technology for remote work to decrease overhead.
Adapt Pricing Strategies: As operational costs rise, businesses must communicate price increases to customers transparently. Educating clients about the reasons behind these changes can help maintain trust and understanding.
Explore New Revenue Streams: Companies are pivoting to explore alternative business models. For example, delivery services are adapting by offering high-demand, higher-margin services, while others are focusing on quality over quantity in production.
Leverage Community Support: Local initiatives, such as business incubators or online performance benchmarking tools, can provide small businesses with valuable resources. Engaging with community programs can help businesses thrive despite rising costs.

The Current Climate of Rising Costs

Rising costs are impacting various sectors differently. For example, the construction industry is grappling with increased labor rates, where $30 per hour plus benefits has become the norm. The pandemic has shifted workforce dynamics, altering expectations around work-life balance and pushing many younger workers to seek roles that offer fulfillment rather than just financial rewards.

Moreover, industries like hospitality and retail are adapting to economic pressures by reducing operational hours to manage expenses effectively. For instance, Jersey Mikes is streamlining shifts to control overtime costs, while delivery businesses are refocusing their services to cater to changing market demands.

Pros of Rising Costs

Enhanced Job Fulfillment: As businesses struggle to compete on wages alone, they are increasingly emphasizing the non-monetary benefits of their roles. Employers can highlight opportunities for personal growth, mentorship, and a supportive work culture. This shift can lead to more engaged and loyal employees who value purpose over paycheck.
Encouragement of Innovation: The need to manage rising costs can spur creativity. Companies are finding new ways to deliver services, such as combining remote work with occasional in-person meetings. Businesses are also diversifying their product offerings to meet evolving consumer preferences, as seen with creative alternatives to helium balloons in the events industry.
Focus on Quality: The trend toward higher wages has prompted some businesses to emphasize quality over quantity. Consumers are increasingly willing to invest in durable products, fostering a market that values craftsmanship and long-term sustainability.

Cons of Rising Costs

Competitive Disadvantages for Small Businesses: Small businesses often struggle to match the compensation packages offered by larger companies. As a result, they may find it difficult to attract and retain talent, potentially compromising their service quality and operational capacity.
Increased Operational Pressures: Businesses are facing escalating costs across the board—utilities, insurance, and materials. This necessitates constant adjustments to pricing structures, which can alienate customers and strain relationships. For instance, companies like Mission Valley Bank are noting increased challenges in securing loans to manage these rising costs.
Employee Mental Burden: As companies cut back and expect remaining staff to take on more responsibilities, employee morale can suffer. This added pressure can lead to burnout and higher turnover rates, negating the savings anticipated from cost-cutting measures.

Strategic Approaches to Mitigating Rising Costs

Invest in Employee Development: Mentorship programs and professional development can create a more motivated workforce. By fostering a culture of growth, businesses can enhance employee satisfaction and reduce turnover, ultimately mitigating the costs associated with hiring and training new staff.
Enhance Company Culture: Establishing a strong company mission and values can attract employees who resonate with the organizational ethos. A robust culture can also encourage teamwork and loyalty, resulting in reduced recruitment costs over time.
Explore Creative Cost Management Solutions: Businesses are encouraged to rethink their operational strategies. For example, embracing technology for remote meetings can save travel costs, while re-evaluating service offerings can help companies remain competitive without compromising quality.
Community Collaboration: Local businesses can benefit from joining focus groups to discuss common challenges and share solutions. Collaborating with organizations like SizeUp Santa Clarita provides valuable benchmarking tools, allowing businesses to evaluate their performance against industry standards.
Adapt to Generational Preferences: Understanding what younger job seekers prioritize can help businesses align their offerings with the values of potential employees. Emphasizing work-life balance and personal fulfillment can attract a dedicated workforce that contributes positively to the business culture.

Conclusion

Rising costs present significant challenges for businesses, but they also offer opportunities for growth and innovation. By fostering a positive work environment, investing in employee development, and exploring creative operational strategies, businesses can navigate this turbulent landscape successfully. While the road ahead may be fraught with difficulties, the resilience and adaptability demonstrated by many companies suggest that the current climate may ultimately yield a stronger, more engaged workforce ready to meet future challenges head-on.

The Impact of AI on Business and Community: Balancing Efficiency and Human Connection

Artificial Intelligence (AI) has emerged as a transformative force in business and community dynamics, reshaping the way we work, interact, and innovate. With the rapid advancement of AI technologies, from virtual assistants like Siri and Alexa to sophisticated data analysis tools, organizations are constantly exploring new ways to leverage these capabilities. However, the integration of AI into the workplace and community life brings both opportunities and challenges.

Key Insights

AI as a Tool, Not a Replacement: AI should be viewed as an enhancement to human capabilities, not a substitute. The most successful implementations integrate AI with human skills, allowing employees to focus on higher-value tasks.
Clear Communication is Essential: Effective use of AI hinges on the ability to ask clear, concise questions. Organizations that foster a culture of clear communication can maximize the benefits of AI.
Education and Training: Ongoing education about AI tools is crucial. Companies should invest in training their workforce to effectively utilize AI and integrate it into daily operations.
Balanced Approach: Organizations should balance AI’s advantages with ethical considerations. Transparency in AI’s usage and addressing employee concerns about job security will foster a healthier workplace culture.
Continuous Evaluation: As AI technologies evolve, businesses must continuously evaluate their strategies and implementations to stay competitive and compliant with regulatory frameworks.

The Pros of AI Integration

1. Enhanced Efficiency

AI tools streamline operations, allowing businesses to operate more efficiently. For example, AI can automate repetitive tasks, such as data entry, email management, and customer support, freeing up human employees to focus on more strategic endeavors. Companies utilizing AI for functions like web traffic monitoring, customer relationship management, and sentiment analysis report significant gains in productivity.

2. Data-Driven Decision Making

AI’s ability to analyze vast amounts of data quickly aids in informed decision-making. By examining trends and consumer behavior, businesses can optimize pricing strategies and reduce operational costs. For instance, AI tools can help identify inefficiencies in supply chains or automate ordering processes, resulting in cost savings and improved service delivery.

3. Improved Customer Experiences

AI enhances customer interactions by personalizing marketing efforts and providing timely support. Companies are increasingly using AI to draft correspondence, summarize meetings, and create marketing content, thereby enriching the customer journey. In sectors like real estate, AI-driven tools improve property presentations, enhancing appeal without deception.

4. Workforce Empowerment

Rather than replacing jobs, AI serves as a tool to augment human capabilities. Employees can utilize AI to analyze information, develop insights, and complete projects more efficiently. For instance, individuals in various fields, from legal research to finance, use AI to expedite tasks and enhance their output.

The Cons of AI Integration

1. Job Displacement Concerns

Despite AI’s potential to enhance productivity, it raises concerns about job displacement. As automation becomes more prevalent, employees may fear job loss, leading to resistance against AI adoption. In some sectors, like fast food, the reduction of staff through automation has sparked debates about the long-term implications for workers.

2. Reliance on Technology

There is a risk of over-reliance on AI, leading to a diminished human touch in business processes. For effective use, AI requires clear instructions and continuous human input. Organizations must navigate the delicate balance between leveraging AI’s capabilities and maintaining essential human connections, particularly in customer-facing roles.

3. Ethical and Regulatory Challenges

The deployment of AI raises ethical considerations, particularly regarding data privacy and intellectual property. Companies must be transparent about how they use AI and ensure compliance with regulations. For example, businesses that rely on data from other companies may face limitations if that data is not permitted for AI training.

4. Quality of Output

While AI can generate content and analyses, the quality of the output depends heavily on the quality of input it receives. There is an ongoing debate about whether AI can produce truly original work or if it simply regurgitates existing information. This raises questions about creativity, ownership, and the value of human contributions.

Conclusion: A Future with AI

The integration of AI into business and community life is a double-edged sword, presenting both remarkable opportunities and formidable challenges. To harness the benefits of AI while mitigating its drawbacks, organizations must adopt a thoughtful approach. This includes educating employees on effective AI usage, fostering a culture of collaboration between AI and human intelligence, and maintaining ethical standards.

Ultimately, the question for businesses is not whether to use AI, but how to do so effectively. With 79% of business leaders believing AI is crucial for competitiveness, the path forward lies in strategic implementation and a commitment to preserving the human touch in an increasingly automated world. As we navigate this AI-driven landscape, the collaboration between technology and human insight will be key to unlocking the full potential of our endeavors.

Workforce Development: Bridging Gaps Between the Workplace and Community

In today’s dynamic labor market, the conversation around workforce development is more crucial than ever. Insights gathered at the recent VIA 2024 CEO Forum emphasize the multifaceted challenges and opportunities businesses face in cultivating a workforce that is both skilled and engaged. This article explores the key themes from the forum, including the importance of workplace culture, employee relationships, and community involvement, while also discussing the pros and cons of various workforce development strategies.

Key Insights from the Forum

1. Embracing Departures

One of the most refreshing perspectives shared at the forum was the idea of celebrating employees who leave rather than shunning them. Former employees can be invaluable advocates for a business, referring potential candidates and providing insights into company culture. This shift in mindset not only maintains relationships but also fosters a network of goodwill.

2. Fostering Strong Relationships

Creating a workplace where individuals have close connections—ideally, a “best friend”—is essential. These relationships enhance employee satisfaction and retention, contributing to a more positive company culture. The notion that “people are our most valuable asset” underscores the importance of valuing and recognizing each employee’s strengths and aspirations.

3. Career Growth and Coaching

Recognizing employees’ strong suits and providing opportunities for growth is vital. Promotion should align with an employee’s strengths to avoid disillusionment. Regular coaching and mentorship programs can help guide career development, ensuring that individuals feel supported in their roles.

4. Culture and Work-Life Balance

The forum highlighted the importance of a strong workplace culture, especially in hybrid work environments. Companies must strike a balance between flexibility and maintaining engagement, as remote work can sometimes diminish company culture. Providing spaces that encourage collaboration—like break rooms or wellness centers—can foster community and belonging.

5. Understanding Generational Needs

Younger generations, particularly Millennials and Gen Z, seek work environments that offer more than just financial incentives. They desire work-life balance, personal development opportunities, and alignment with their values. Businesses need to adapt by offering mentorship, professional development, and community involvement initiatives that resonate with these workers.

6. Bridging Generational Gaps

To bridge the generational divide in the workforce, organizations should facilitate skill exchanges between older and younger employees. This mutual learning can enhance teamwork and understanding, paving the way for a more cohesive work environment.

7. Addressing Leadership and Culture

Leadership plays a critical role in shaping workplace culture. Employees are more likely to stay when they respect and resonate with leadership decisions. The forum discussed the need for transparency and open communication, which are essential for building trust and retaining talent.

Pros and Cons of Workforce Development Strategies

Pros

Enhanced Retention: A focus on culture and relationships can reduce turnover, saving businesses recruitment and training costs.
Increased Engagement: Providing opportunities for growth and recognizing individual strengths can lead to higher job satisfaction and productivity.
Stronger Community Ties: Encouraging community involvement fosters a sense of ownership among employees, enhancing loyalty and brand advocacy.
Diverse Perspectives: Bridging generational gaps through mentorship promotes diverse perspectives, driving innovation and adaptability.

Cons

Resource Intensive: Implementing comprehensive workforce development strategies can require significant time and financial investment.
Resistance to Change: Some employees may resist cultural shifts, leading to temporary disengagement during the transition.
Balancing Flexibility with Structure: Navigating hybrid work models can lead to trust issues and misunderstandings regarding productivity.
Overemphasis on Individual Needs: While catering to individual desires is essential, excessive customization may disrupt overall team dynamics and cohesion.

Conclusion

As organizations strive to attract and retain talent in an evolving job market, the principles discussed at the VIA 2024 CEO Forum offer valuable guidance. Workforce development is not merely about skills training; it’s about creating an environment where employees feel valued, engaged, and connected to their work and community. By prioritizing culture, relationships, and inclusivity, businesses can build a workforce that is not only skilled but also motivated to contribute to long-term success.

Investing in workforce development is investing in the future—of both the organization and the community it serves.