Global CEOs' recipe for survival, business growth in tough times
Reimagination, retaining top talents, building trust are among next moves of companies, says PwC survey
Global chief executive officers recognise the potential disruptions ahead as global uncertainties continue and nearly 40% of them surveyed by the PwC think their firms will not be able to be economically viable even in the next 10 years if they walk the same path.
But they also suggest options to overcome the constraints and move ahead faster. Though cost cutting has been in their recipe, most of them do not find job and pay cuts as a solution, rather they feel that retaining skills and promoting inventions will help them survive and prosper.
The PwC's global CEO survey asked the world's 4,410 top executives, including about 40 from Bangladesh, how long their companies would take to become viable if they run on the current path. About 59% of them said it would take them more than 10 years, while 39% said they would need 10 years or less.
Keep updated, follow The Business Standard's Google news channel
Of them, 40% see risks from inflation, 31% from macroeconomic volatility and 25% geopolitical conflicts in the next 12 months, followed by cyber risks, health risks, climate change and social inequality.
The "great resignation" is a reappraisal of leadership. It is a great reckoning on how we're leading our companies.
But there are ways ahead. "Reimagine and choose" are among their next moves. The upshot is a race to reinvent, according to the PwC Global CEO Survey findings released on Monday.
It refers to a 2022 book, Beyond Digital, where PwC authors described how enterprises moved for transformation and reimagination, looking beyond the current portfolio of businesses and products. Such reimagination often involves hard choices about what not to do – for example, when Philips reinvented itself as a health-technology company, in addition to lighting.
Asked how they will fit their resilience and workforce strategies fit together, the CEOs report cutting costs and spurring revenue growth – but most don't plan to reduce workforce or delay deals in the current environment.
The survey data suggests CEOs aren't laying people off, in part, because of their recent experience with employee attrition and fear of a"great resignation".
Many CEOs anticipate, the war for talent remains fierce, even amid deteriorating economic conditions, and therefore, keeping workers happy and engaged will be a mission-critical priority.
So, "retain top talent" remains a major next move for them.
There are two ways to look at sustainability: either be perplexed and stay away or be excited and take action.
A separate PwC research also suggests how flexibility and fair pay matter in employees' decisions about whether to stay or go. "We all have significantly more to do to work in different ways to align with the expectations of millennials and generation Z," Wendy Clark, CEO of global marketing and advertising network Dentsu International, told PwC in a recent interview.
In response to near-term economic challenges, 52% CEOs say they have already begun cutting costs, just 19% are implementing hiring freezes, and 16% are reducing the size of their workforce. This stands in stark contrast to what was seen in 2008 when about twice as many said they anticipated near-term headcount reductions.
Boosting supply chain resilience and responsiveness have been a growing priority for many organisations after the Covid-19 pandemic exposed the fragility of the global supply systems. Recent PwC experience has highlighted a set of smart moves to improve supply chain performance, with companies creating AI-enabled supply chain control towers.
What Bombardier CEO Eric Martel said was the manifestation of companies' desperate move to make their supply chain more focussed. "If one person was looking after 20 suppliers prior to Covid-19, today we have one person for every five suppliers," the top boss of the aeroplane maker told PwC.
CEOs are now willing to spend more time reinventing their business to meet future demands.
To this end, technology investments are a top priority as three-quarters of companies are focused on automation, upskilling, and deploying advanced technologies such as AI.
We believe innovation should be pursued collaboratively because in that way it is undoubtedly more productive.
To reinvent their business while navigating near-term operating challenges, CEOs need the help of their people – C-suite leaders, middle managers and frontline employees alike. Engaged, empowered organisations move faster, innovate more readily and collaborate more effectively to get things done.
But this year's survey suggests some warning signs; 53% of global CEOs said their leaders don't often tolerate small-scale failures. And 76% said their leaders don't often make independent strategic decisions for their function or division.
CEOs need to double down on setting a shared vision, empowering people to make decisions, and being visible champions for change, suggests the PwC survey.
It also calls for decentralising project-level decisions as a next step to ensure organisational empowerment and autonomy, which are important contributors to effective corporate resource reallocation.
Trust, leadership and the C-suite conversation are also cited as major contributors to further business growth.
Trust helps institutions and individuals "go far together" – and win today's race while running tomorrow's, the survey says.
Over the next 12 months, CEOs see climate risk impacting their cost profiles and supply chains more than the safety of their physical assets. Many companies are trying to decarbonise, innovate and craft climate strategy in parallel as they see moving with the right pace and priority to mitigate climate risks, generate opportunities and decarbonise are enormous strategic challenges.
