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Growing in complicated times

Today’s CEOs face a business environment that’s becoming increasingly complicated to read and adapt to. Seven years on from the global financial crisis, the business landscape still hasn’t really returned to what it was. Will it ever? Last year regulation, skills, national debt, geopolitical uncertainty and taxes topped CEOs’ list of concerns about threats to business growth. None of these have gone away this year. In fact, the level of worry is higher today than at any point in the past five years. Concern about over-regulation in particular is still highest, cited by 79% of CEOs – making it the fourth year in a row that it’s risen (see Figure 1). Geopolitical uncertainty, meanwhile, has become the second biggest concern, cited by 74% of business leaders. This comes at a time when terror attacks are increasing and touching every part of the world, many linked to the heightened conflict in Iraq and Syria. Global conflicts are also connected to anxieties about social instability and readiness to respond to crises, named by 65% and 61% of CEOs, respectively. Cyber security is also a worry for 61% of CEOs, representing as it does threats to both national and commercial interests.

2016

19th Annual global CEO survey

PWC

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Addressing greater expectations

As technology and other factors create an environment of higher transparency, CEOs have set their radar on a wide range of stakeholders. Customers remain the top priority, with 90% of CEOs indicating they have a high or very high impact on their business strategy (see Figure 6). But government and regulators come in second (cited by 69% of CEOs). That’s higher than industry competitors and peers (67%) and no doubt reflects CEOs’ enduring concerns about over-regulation in the marketplace. The views of these and other stakeholders, including employees and investors, aren’t just evolving but diverging, as CEOs have told us. Customer behaviour, in particular, has become more complicated as values and buying preferences evolve. The three biggest trends CEOs see as most influencing those views – technological advances, demographic changes and global economic shifts – as well as the interactions between them, are only going to continue to drive change (see Figure B, Looking for more data?, page 34).

2016

19th Annual global CEO survey

PWC

view report

Transforming: technology, innovation and talent

It’s evident that most businesses today, in defining what they stand for, recognise the needs of a wider set of stakeholders – and their customers’ expectations about how they address those needs. Translating a broader corporate purpose into the everyday, however, is another matter entirely. Even the most committed can find it challenging in the extreme to reshape their company while facing day-to-day battles on every front to fight off competition, grow revenues and cut costs. Putting technology to work: business leaders understand all too well how technology is transforming their relationship with customers as well as other stakeholders. So it makes sense that they see technology as the best way to assess and deliver on changing customer expectations, with 51% of CEOs making significant changes in this area (see Figure 11). The innovation edge Over half of CEOs ranked R&D and innovation technologies as generating the greatest return in terms of successful stakeholder engagement (see Figure 12). The winners in the innovation game, however, will be those that harness technology and innovation to deliver products and services that are cost-effective, convenient, functional and sustainable. The people edge As companies look to meet the complicated expectations of stakeholders and society, they will need a new generation of people with an entrepreneurial mindset who can harness technology and drive innovation.

2016

19th Annual global CEO survey

PWC

view report

Measuring and communicating success

In a complex and rapidly changing world, we were interested in understanding which areas CEOs want to better measure and which areas they want to better communicate to the multiple stakeholders who interact with their organisations. We found that the key metrics CEOs would like to improve are the ones traditionally seen as ‘harder’ drivers of business success like innovation and risks, while the areas they want to better communicate are emotional, ‘softer’ issues around values and purpose (see Figure 15). But customers are seeking information about both the ‘hard’ and ‘soft’ drivers of business success. Indeed, real-time dashboards created and managed by users themselves are becoming feasible, raising expectations for more fresh and relevant information and ways of viewing it. Ultimately the CEO must deal with matters of the head and the heart, the rational and the emotional. Our research suggests that there is much room to improve on both the assessment and communication of key business areas, including of course, core financial data.

2016

19th Annual global CEO survey

PWC

view report

Navigating complexity to exceed expectations

Technological progress, shifting demographics, urban expansion, the rise of emerging markets and a changing planet are moving the world beyond globalisation to a multi-polar reality. As this happens CEOs are learning that much of their success depends on sensing and addressing the rapidly changing values and expectations of their many stakeholders.

2016

19th Annual global CEO survey

PWC

view report

Intelligent Automation

Intelligent automation is the launching pad for new growth and innovation. Powered by artificial intelligence (AI), the next wave of solutions will gather unprecedented amounts of data from disparate systems and—by weaving systems, data, and people together—create solutions that fundamentally change the organization, as well as what it does and how it does it.

2016