The Cost of Waiting, the Pressure to Act

In this episode of the ExecutiveEDGE Podcast, Abby White and Geert De Lombaerde dig into five stories that got executive readers’ attention this month and the bigger picture behind them. From tariff uncertainty and earnings pressure to workforce readiness and change management, this conversation is really about what happens when business problems stop feeling temporary and start looking like the new operating environment.

What you'll learn:

• How to lead change after a spinoff
• Why tariff uncertainty is still dragging on business
• What it takes to rescue a struggling company
• Why Gen Z readiness is also a management issue
• What Q1 earnings revealed about costs, labor and demand

Episode Resources:

CEO Corner: David Sewell On Managing Change and Defining Success Beyond Early Wins  

Tariffs One Year On: Leaders Are ‘Absorbing More Than Adapting, Waiting More Than Acting’  

Tough Choices: How to Rescue a Struggling Company   

Survey: Gen Z is Unprepared for the Workforce, but Nearly Half of Companies Have Yet to Adapt to Them  

Pressure Points: Early Takeaways From Q1 Earnings Season  

Prefer to read? Here's an excerpt of the podcast transcript*

Abby White: This month’s most-read stories weren’t really about optimism. It was more about pressure — and what leaders are doing when that pressure stops being temporary. From tariffs to the recap of the Q1 earnings calls to workforce readiness and corporate turnarounds, this is a lot about executives who are trying to protect performance while also dealing with these deeper, more thorny structural issues. I think if there’s a common theme here, it’s that executives are being asked to lead through a lot of difficult situations right now. Would you agree with that?

Geert De Lombaerde: Yeah, a lot of pushes and pulls on their time and their attention and their money and their budgets, and none of the issues are terribly new. It’s more that they are stacking on top of each other, whether it’s tariffs, which you could say go back the better part of a decade now, one way or another, whether it’s price pressures, which also go back the better part of a decade by now. As soon as they disappear in one form, they return in another. A lot of it is about classic blocking and tackling of management and leadership. But it seems like the elements that you’re trying to block and tackle are getting bigger, and they keep coming at you as you’re trying to get your arms around them.

Abby White: One consistent theme I’ve seen in a lot of your articles lately is that a lot of these are technically temporary issues, but they’re stacking, and they’re almost compounding on top of each other, and some of them are not feeling as temporary as we originally thought they were, right?

Geert De Lombaerde: No, and you could see the things that we’re going to talk about, whether it’s price pressures, whether it’s input costs, whether it’s labor issues, management kinds of mainstays. They’re not going to go away later this year, or next, or in ’28. These are things that are always high on the strategic agenda, but just sometimes a little more productively than it feels like they’ve been of late.

Abby White: Let’s dive right in. The first story we’re going to talk about is your CEO Corner on managing change and defining success beyond early wins. Tell us a little bit about this conversation.

Geert De Lombaerde: I had a chance to talk with David Sewell, who’s the CEO of Solstice Advanced Materials, which was spun out of Honeywell last year. What David has really had the opportunity to do — and I liked the way that he framed it — is, we were part of Honeywell, and we had to kind of fight for scraps to a certain extent. But now that we are spun out of Honeywell, and we have our own priorities, and they are truly priorities, because we are a smaller, more nimble organization, we can shape the path of the company a little more directly and more urgently.

We really talked about the growth opportunities that they have, where do we really want to pay attention, and what kind of clarity do we want to create for ourselves so that we can move forward. He had some really good insights about how he wants to take advantage of the new guy mentality. There is always the new guy energy that you bring, right? There’s a whole different wave of enthusiasm and energy. He had some good thoughts about what it looks like once that quote-unquote new guy energy dissipates. Then what? How do you look at success in a longer-term frame?

It was a good conversation about how to create some urgency, how to create some clarity, and then have those things set the stage for lasting change and lasting progress.

Abby White: It was almost kind of like a case study in change management, which is a term that is just thrown around so much and feels really abstract sometimes. But when your company is being reshaped in real time like this, he had the ability to refresh some things and obviously take some best practices, but also put his new spin on it with that new guy energy.

Geert De Lombaerde: One of the biggest takeaways is he said, we’re not going to get stuck in a certain way of doing things. If it’s good, and it worked for Honeywell, and it works for us, we stay with it. But we have a chance to question some things, question some processes, some priorities, and then find the best way forward. Other management teams and other leadership teams can also be very intentional about saying, are we really doing things the way we could do them best, or can we kind of hit reset in certain parts of the business?

Abby White: Continuing that thread of what leaders can change versus what they’re forced to absorb, that shows up very clearly in our next article: tariffs one year on. Tell us more about why you took this angle and what you discovered.

Geert De Lombaerde: This was some research that our colleagues at Endeavor Business Intelligence did, and we’ve been working on this ever since the rollout of the tariff wave last year. One of the takeaways here is the uncertainty created by those tariffs, some of them being put on, then taken off, then amended, then put on again, taken off again, and so on and so on. There’s a real cost to that. And in this case, the cost is that even if businesses aren’t doing anything, it’s hurting their profits. The majority of them said, yes, our profitability is down, our margins are down because of all this.

And yet a large number of them haven’t made fundamental changes to their business models because they can’t, because they don’t know what’s ahead. It’s this really delicate dance that they’re doing. Fundamentally, it’s really hard to change your business model if you don’t know what the next three years, five years looks like, never mind the next three months if the tariffs are changing.

The biggest takeaway from this survey from our friends at EBI is a lot of people are saying, I can’t make any big changes. I’m just going to sit tight, take a little pain, take some more pain, and just deal. Which is not healthy. That flows through to profitability, but then it flows through to, potentially, are you hiring as many people? Are you taking measures a step further and saying, now I have to lay off some folks? It sets the stage for not good things because of the uncertainty.

Abby White: Our collaboration with our colleagues at Endeavor Business Intelligence has really given us some unique insight into what’s happening and enabled us to compare across different industries what kind of actions are being taken.

Abby White: If waiting isn’t working, the next question becomes a lot tougher: what do you do when your business is already off track? Andrea Zelinski tackled this one in her Tough Choices series on how to rescue a struggling company.

Geert De Lombaerde: One of the takeaways for me here really is that there are tools — technological, financial, whatever — to give you the insights that you need to make clear-headed decisions. But what I took away was, Walter Simson said, this is not an exercise in perfection. This is, you are fixing a problem. It doesn’t have to be perfect, you just have to recognize the problem, scope it, identify it, and then address it.

It’s really something about being very honest with yourself and with your organization, and saying, hey, we made a mistake, right? And let’s fix it. Maybe not point the blame, not point fingers, because you can get the visibility, you can get the granularity into your data, and then you can put your finger on it and say, okay, how are we going to address this? But it takes, in the midst of all this noise, a little moment of brutal honesty with yourself and your organization to say, are we gonna do this? Okay, well, let’s get to it, and let’s be real about it.

Abby White: This is one of those times where clarity is more important than optimism. You need some reality when things are struggling, and you need to focus on what is core to your business: the products, the customers, the cash flow, and really your operating priorities.

Not every leadership problem is about a business in distress. Sometimes it’s about a workforce that’s coming in with a very different set of expectations. Andrea Zelinski also wrote this one: Gen Z is unprepared for the workforce, but nearly half of companies have yet to adapt to them. The problem is two-pronged here, right? It’s not just the kids, huh?

Geert De Lombaerde: It’s never just the kids, right? People have opinions about the kids these days, and that’s not a new thing. But even knowing that people would have strong opinions, I was still surprised by just how negative a lot of the commentary and a lot of the views were.

But it is a two-sided equation. People recognize — this was super interesting to me — a lot of folks recognized their biases, whether that’s from the stereotypes or social media. They acknowledge during the survey, yes, I am biased about this. But the kids still stink, is what they would say.

So it’s like, well, hold on, what are we collectively in the workforce doing to get these folks up to speed in a way that people did for us back in the day? The fact that very few organizations said they are making substantive changes to ensure the success of the Gen Zers coming in is really telling.

They value authenticity, they value open communication more. But they also came of age in school during COVID. They were becoming aware of the world more broadly during the Great Recession. A lot of young people’s views of the workplace have been shaped by that. They’re not as invested in all-out success, in go, go, go, and build a career. They want that balance, they want some authenticity, they want some real value, and we kind of, as a group of older professionals, we need to meet them there to a certain extent.

Abby White: One of the biggest pain points we see from a lot of our readers is this fear of losing institutional knowledge as the older part of the workforce moves toward retirement. If we’re not meeting younger workers where they are, and we’re not finding ways to upskill them and train them and pass this institutional knowledge on, that’s going to put companies at a really scary breaking point.

Geert De Lombaerde: It is, absolutely. There’s some new academic research out that really has raised a lot of eyebrows that looked into the theory that the rise of AI is suppressing hiring of young folks. The researchers found that, no, at least not yet. That’s not happening. AI isn’t suppressing hiring of young folks, but work from home is.

When I saw that the first time, I was like, oh, of course it is, because we sent experienced professionals home, they’re not in the office, they’re not mentoring as actively, or even as organically. Some of the best things coming up as a young person in a workplace are the very organic, natural connections that you make. We have broken some of those links between the generations in the workplace, and yet we expect the kids to come in bright-eyed and bushy-tailed. We probably need to check ourselves a little bit on that front.

Abby White: This takes us to our last story here, your piece called, Pressure Points, Early Takeaways from Q1 Earnings Season. What was the common takeaway that you walked away with?

Geert De Lombaerde: There were a couple. First, workforce-related: there are still some severe, and in some cases growing, shortages of qualified talent, of skilled labor in different parts of the economy. Executives were still talking about, hey, we’re having a hard time. We’re probably going to have to pay more for experience. We can bring people in, but it takes time to train them. The experienced labor is really at a premium.

Another takeaway was really the price pressures. This was the first quarter where I heard a lot of CEOs and CFOs use the word fatigue. There was fatigue among customers, both in the consumer space and B2B. It’s been a long couple of years in terms of prices, and having to figure out how to pass on price pressures, how to absorb price pressures of your own, and it’s not going anywhere still.

And then I’ll wrap on a positive one: demand hasn’t been hurt. If anything, more parts of the industrial economy are picking up some steam, whether that’s the AI construction boom, whether that’s the energy transition work more broadly, whether that’s infrastructure laws from a couple years ago, or whether it’s the tax cuts from last year that are starting to free up some dollars for investment that had maybe been put off. More CEOs from industrial distributors and different parts of the manufacturing world were saying, we’re seeing some strength. Orders are holding up.

So, very much this yin and yang. If you’re in the C-suite, you’re having to weigh those two things. What am I seeing? What am I doing? How do I juggle the fact that I am paying more, but my customers are okay paying more? How much of that price can I push through without really starting to create some demand destruction?

Abby White: Over the past few weeks, it’s always interesting to see what our readers are reading on our websites. This kind of mood shift we have from cautious recalibration to something a little bit more demanding — leaders are trying to protect margin and performance, but there are also these deeper organizational questions that they cannot afford to ignore.

Geert De Lombaerde: If we can kind of put a bow on it with a little bit of optimism, the one word that kind of comes to mind is opportunity. Yes, there were these challenges and things are stacking, but there are opportunities to address them. If you’re a CEO, you can try to bring some clarity to your business. You can take advantage of some of the megatrends that are growing. You can improve relationships with a big chunk of your workforce. The opportunities are out there, we know how to do this, and the challenges are time and attention spans.

Delegate to your leadership team, expand your leadership team. Really put people in positions where they can address some of these individual challenges, because you, as the CEO, the president, or the CFO, you can’t do it all. You have to be strategic, you have to remain very much focused on the longer term. Identify the problems, measure them, and go out and get them as a group, as a team. Every challenge comes with an opportunity as well to improve.

*Transcript lightly edited for clarity and brevity