CEOs Worry Their Companies Aren’t Evolving Fast Enough
If the current business environment seems intimidating, just wait until a decade from now.
A new survey of over 4,400 CEOs from PwC finds 40% of global corporate leaders worry their company will not be economically viable in 10 years if they continue on their current course.
That’s a chilling number, but it’s one that also underscores the critical need for companies (and executives) to continually evolve. But are companies spending enough time reinventing their businesses? Many CEOs admit they’re not.
The survey, the 26th by the company, also found CEOs are worried about near-term challenges, with the global economy a top concern. Some 75% of the leaders PwC spoke with said they expect growth to decline in the coming year
The thoughts on the viability of their business in a decade weren’t restricted to a single industry. More than 40% of executives in the technology, telecommunications, healthcare and manufacturing fields were worried about the economic viability of their companies. The challenges CEOs though they would face varied, however.
More than half agree changing consumer demand and preferences will have an impact on their profitability to either a large or very large extent. And changes in regulation as well as labor/skills shortages also topped the 50% mark.
Just less than half point to technological disruptors, from AI to the metaverse, as something that will impact profitability. Supply chain disruption, transition to new energy sources and new entrants in the industry from adjacent industries round out the list of challenges.
"We are living through extraordinary times, with five broad megatrends—climate change, technological disruption, demographic shifts, a fracturing world and social instability—reshaping the business environment,” wrote PwC. “Although none of these forces is new, their scope, impact and interdependence are growing, with varied magnitude across industries and geographies."
There were some geographic lines in the survey. CEOs in Japan were among the most concerned about their businesses, as they’ve been facing demographic headlines for decades. Corporate leaders in China were also at the top of the list, pointing to uncertainties about free-flowing global trade.
CEOs in the U.S. were the most optimistic about the future of their businesses.
The takeaway, PwC says, is for today’s CEOs to reimagine their company’s place in the world. Look beyond your current portfolio of businesses and products and determine what value your business can create for future customers.
That is, of course, not an easy thing to do, the professional services network admits.
“Such reimagination often involves hard choices about what not to do,” it writes. “For example, when Philips reinvented itself as a health-technology company, bringing together the Amsterdam-headquartered multinational’s consumer-insights capabilities, depth in medical-device technologies, and strengths in data analytics and artificial intelligence, it also exited some businesses and de-emphasized others. As Frans van Houten, the CEO at the time, described it … ‘I recognized that the chances that we would transform lighting and healthcare simultaneously were not so high. And so we made a choice.’
Another key to reinvention? Encouraging honest feedback from workers and leaders. Some 43% admitted they aren’t as open to debate and dissent as they should be.
No company is built on the vision of a single person. To grow and remain relevant with the target customer, companies need to accept input from anyone who has a stake in that business’s growth.
Sometimes the best ideas come from the most unlikely of places.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.