PwC recently published their Annual Global CEO Survey which suggests that the vast majority of companies are already taking some steps towards reinvention. Yet even as CEOs attempt meaningful changes to their companies’ business models, they are even more concerned about their long-term viability. Although the 4,702 CEOs responding to this year’s survey were more optimistic about global economic growth than last year, 45% of them are still not confident that their companies would survive more than a decade on their current path. Among the other key findings:
- The impetus to reinvent is intensifying. CEOs expect more pressure over the next three years than they experienced over the previous five from technology, climate change and nearly every other megatrend affecting global business.
- Survival-conscious CEOs among the 45% who are less confident of their company’s viability are slightly more likely than other CEOs to have taken action aimed at reinventing their business models. Small company chief executives are more likely than their larger company counterparts to feel their company’s viability threatened.
- CEOs perceive enormous inefficiencies across a range of their companies’ routine activities—everything from decision-making meetings to emails—viewing roughly 40% of the time spent on these tasks as inefficient. A conservative estimate of the cost of that inefficiency would be tantamount to a self-imposed US$10 trillion tax on productivity. Generative AI, which about 60% of CEOs expect to create efficiency benefits, could help relieve some routine burdens.
- Four in ten CEOs report that they have accepted lower hurdle rates for climate-friendly investments than for other investments—in the majority of cases, between one and four percentage points lower. This is clear evidence that some CEOs are willing to make complex trade-offs as they strive to boost the sustainability of their businesses.
- Meanwhile, two-thirds of CEOs report reallocation of resources (financial and human) of 20% or less year to year. The connections among reallocation, reinvention and financial performance suggest that more aggressive reallocation—up to a point—is required to succeed.
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