Thinking Now and Then

CEOs need to be thinking and dealing with both the now and then, but are struggling to find the time for the then. The PWC 26^th Annual Global CEO Survey (download it here) has looked at nine key themes and found that things are changing, and CEOs are needing to adapt. The report is not a huge read, but it is an interesting one. A very high level summary for you follows:

• What is the half-life of your business?

Following the current trajectory is not an option if businesses wasn’t to survive. “Nearly 40% of CEOs think their company will no longer be economically viable a decade from now, if it continues on its current path.” Issues like skill shortages, technology disruption, demographic shifts, and social instability are changing the business environment and CEOs need to a “reimagination of  company’s place in the world.”

• When will you company’s climate clock run out?

Most CEOs are expecting some impact within the next 12 months from climate change, particularly impacting costs, supply chains and their physical assets. This is a long term problem that needs to be broken down into manageable chunks if CEOs are going to make any headway.

• Should you bring your key business risks forward?

In the next 12 months it is inflation, economic volatility and geopolitical risk that are attracting most CEOs attention right now. In the five-year horizon it is these plus cyber risks. The challenge for CEOs is to avoid being blindsided by these longer term risks while trying to deal with the here and now.

• How much is your mood affecting your view of tomorrow?

Most of the CEOs believe there will be a decline over the next 12 months in global economic growth. The report asks whether “inordinate optimism a year ago has been replaced by excessive pessimism?” Will this impact effective decision-making? And will boards also succumb to this pessimistic outlook?

• How do your resilience and your workforce strategies fit together?

“In the current environment, CEOs report cutting costs and spurring revenue growth – but most don’t plan to reduce workforce or delay [M&A] deals. The consensus is that workforce churn is here to stay, so keeping workers happy and engaged “will be a mission-critical priority.”

• As geopolitical risks rise, what new contingencies are you preparing for?

CEOs generally are more optimistic about their won countries economies than the global economy. Strategies to address this include cybersecurity investments and shoring up supply chains.

• How much time and money are you investing in the future?

Current operating performance is dominating the CEOs time, where as they would like to be spending more time “evolving the business and its strategy to meet future demands.” The main strategy to address this is to invest big in technology, including automation, upskilling and AI.

• How central are you to your company’s reinvention?

The responses from the CEOs “suggest that in many organisations, the conditions aren’t in place for managers and employees to run on their own towards major new opportunities or to independently spot and respond to disruptive threats.” The advice from PWC is for CEOs to “double down on setting a shared vision, empowering people to make decisions, and being visible champions for change.”

• What kind of ecosystem are you building?

Where companies have a wide network of collaborators, new sources of value arise. And “companies are most likely to collaborate to create business value than to solve societal issues.” Can businesses continue to ignore societal issues?

It is a very interesting report, with many challenges for CEOs, especially those wedded to a traditional trajectory and mindset. This report challenges these and provides some practical advice on how to think about both now and then.