CEOs more confident about company future despite disruption

25 March 2024 Consultancy-me.com 4 min. read
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With sights set beyond the current crises rattling global markets, CEOs at some of the largest companies are remaining optimistic. Two thirds of CEOs are positive about the next three years, according to a study from strategy consultancy Arthur D. Little.

Offering insights into the thinking of business leaders in some of the world’s top companies, Arthur D. Little’s annual CEO Insights Study for 2024 has shown that, despite the fact that the game is evidently changing, top executives are positive about the future and tend to see disruption as an opportunity.

Despite facing challenges like supply chain problems from geopolitical conflict and rising costs due to inflation, CEOs are mostly confident in their economic outlook for the next three to five years.

CEOs more confident about company future despite disruption

Last year, only 22% of the respondents said that they expected a positive global outlook. This year, that number has risen to 66%.

This dramatic change is outlook is even more remarkable in specific regions, like Asia, for example. Only 10% of Asian CEOs expected a positive outlook for the medium term in 2023. That is compared with 78% in this year’s study.

“The world faces a range of pressing challenges, intensified by current turbulence. Innovation is central to overcoming these issues,” said Ignacio García Alves, Chairman and CEO at Arthur D. Little.

CEOs more confident about company future despite disruption

“CEOs agree and are focusing on bringing together AI and human skills to innovate and move forward to ensure future success for their businesses and society as whole.”

Indeed, technology innovation was the top concern for a quarter of the CEOs surveyed, more than any other factor. A significant amount of business leaders also noted that raw material prices and supply chain issues were the most critical factor in their company’s future growth ambitions.

For companies worth between $1 and $10 billion, technology was more important than it was for larger companies. For their part, the largest companies surveyed were significantly more preoccupied with energy prices and globalization, according to the report.

CEOs more confident about company future despite disruption

Key priorities

When it comes to technology and innovation, chief among the top concerns for CEOs is artificial intelligence (AI) and automation adoption. For the vast majority of business leaders, it is no longer a question of ‘if’, but ‘when’ for these crucial technologies.

A remarkable 96% of CEOs reported already having deployed AI in some form, though much of that appeared to be an early stage of adoption. There is certainly a race to achieving growth through AI, however there are still some concerns about these tools and some are holding off – for now.

Environmental, social, and governance (ESG) concerns were another important trend that respondents said would drive growth in the next several years. Over three quarters of those surveyed said that ESG was being embedded holistically across their organization.

CEOs more confident about company future despite disruption

Considering the current market uncertainty, CEOs plan to continue their existing growth strategies, with only minor differences between those used for the past three years and the next three years.

One exception was a larger focus on diversification and on fighting price wars, both of which likely indicate difficult economic conditions and tighter competition. There was also a clear increase in focus on mergers & acquisitions for companies going forward.

“Given today’s business and geopolitical turmoil, it is extremely heartening to see that the CEOs of the world’s biggest companies are positive for the future,” said Francesco Marsella, managing partner at Arthur D. Little.

“The study shows that while they accept that conditions will remain volatile and turbulent, they believe a combination of resilient operating structures, clear strategies, AI innovation, and reskilling their people will enable their businesses to thrive in a sustainable future.”