BrazilWhat’s going on in the heads of CEOs? Here’s what Oliver Wyman found (in 6 charts)
What’s going on in the head of CEOs? Oliver Wyman and the New York Stock Exchange set out to find out exactly that, picking the brains of hundreds of CEOs around the world to gain insight into their goals, worries, priorities, and much more. For those short on time to sieve through the in-depth report – here’s a concise rundown of what they found in 6 charts.
1: What are the main disruptors?
CEOs rate regulation, protectionism, and government subsidies as their biggest concerns, reflecting the fact that global trade has changed a lot since the heydays of globalization and neoliberal economics.
“Governments increasingly are tilting the playing field with regulation, tariffs and subsidies. That forces CEOs to consider a wider range of factors than in the past, and to do so while contending with a higher cost of capital, shifting customer preferences, employee anxiety about potential job loss to AI, and other issues,” states the report.
So how are CEOs planning to counter the disruption caused by regulation, protectionism, and government policy? The report concludes that they are in part “accepting the rising risks”, while simultaneously “adapting their operating models accordingly”.
This includes building in-house geopolitics teams to run war games and prepare responses to future geopolitical events, moves to shift parts of the value chain to more-friendly countries, and reshoring (parts of) the supply chain closer to home. Companies also are strengthening their crisis preparedness capabilities and their agility in business operations.
Volatile inflation and interest rates are the second biggest worry overall, but notably, the top concern for CEOs of small and midsized companies, which typically don’t enjoy the same financial strength as big companies. Geopolitical instability ranks third on the list.
Talent attraction and retention is also a continuing worry, at fourth overall, but third among chiefs of small and midsized companies companies.
2: How will CEOs grow shareholder value?
Asked how they expect to grow shareholder value, CEOs pointed mostly at improvements to capital efficiency (cash flow optimization, working capital management) and organic growth. More than a third of CEOs cited cost reduction as a top three priority for creating shareholder value, but only 8% ranked it number 1, as a result the topic ranks fifth overall.
Third on the list is revenue upflift through enhancements to customer loyalty and higher margins though pricing, while inorganic growth – though mergers & acquisitions – ranks fourth.
5% of CEOs said they were prioritizing moving to an asset-light balance sheet to boost shareholder value, which according to Oliver Wyman supports the idea that most companies are pursuing incremental improvement of their cost structure rather than a transformational one.
3: How important is AI for the business?
Nearly every single CEO surveyed by Oliver Wyman and the New York Stock Exchange said that they consider AI as an opportunity for their business, not a risk. The finding echoes a similar conclusion drawn by another CEO-based report.
So far, they are focusing on AI more as a lever for driving efficiency and productivity in existing operations rather than as a transformative tool for generating new revenue streams. “That may reflect the early-days nature of generative AI, which hit the mass market only a year and a half ago,” states the report.
Yet leaders clearly see AI as a race they do not want to lose. More than 40% of CEOs surveyed cited not moving fast enough on AI and being left behind by competitors as one of their top AI-related risks. This AI ‘fear of missing out’, is highest among large-company bosses at 51%. At the same time, nearly half of all CEOs said they are investing in AI with the ambition to be a market leader across at least one use case, including 64% of big-company chiefs.
4: How are CEOs making their talent base more resilient and future-proof?
Talent attraction, management and retention is regarded a key priority for CEOs wherever they are based, and as a result, they are ready to invest significantly in the topic. The top two workforce priorities identified by the report are: breaking down business silos to create a more unified franchise, cited by 59% of CEOs, and empowering top leaders and managers to decentralize decision-making, named by 53%.
Third is nurturing a culture that supports future success, including purpose and sense of belonging, while upskilling and reskilling staff also rank relatively high, in light of the rapidly changing nature of skills staff need to thrive in their job. 88% of the CEOs surveyed said it’s important to provide training, both in hard skills like processes and AI and soft skills like analytical thinking and self-awareness.
5: How are CEOs planning to groom engagement?
As CEOs modernize their workforces to meet the demands of technological change and changing workforce demands, they are also trying to keep employees engaged in a time of unusual social division. Many CEOs said they have already established frameworks to help guide their actions, and many create an open dialogue to make people heard.
Many companies have adopted frameworks or policies to build engagement with their employees, particularly when it comes to supporting employees directly affected by a crisis, where 52% of CEOs said they have well-developed and tested approaches. Likewise, 40% of CEOs said they have tested frameworks for protecting a unified culture and avoiding polarization, while 33% said they have policies for adjusting the company’s commercial footprint to reflect its values.
