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Businesses that fail to transform will be on life support by 2030, PwC survey finds.
Four out of 10 CEOs believe their businesses will be on life support by the end of the decade unless they radically transform, according to the latest PwC global survey.
More than 4,400 executives in 105 countries painted a bleak picture with the largest drop in confidence about their company’s growth potential — down 26 per cent — since the 2008–09 financial crisis.
The telecomms, manufacturing and tech sectors were seen as most vulnerable and CEOs nominated four main concerns:
- Changing consumer demand and preferences (56 per cent)
- Regulation changes (53 per cent)
- Skills shortages (52 per cent)
- Technology disruptions (49 per cent).
PwC global chairman Bob Moritz said chief executives had to start transforming their businesses now to meet both short and long-term challenges.
“If organisations are not only to thrive but survive the next few years they must carefully balance the dual imperative of mitigating short-term risks and operational demands with long-term outcomes — as businesses that don’t transform, won’t be viable,” he said.
In response to threats over economic viability, 52 per cent of CEOs would look to reduce operating costs, 51 per cent were planning to raise prices and 48 per cent would diversify their products and services.
Despite the focus on cost-cutting, most CEOs said they would maintain staff and salary levels with 60 per cent having no plan to reduce their workforce in the next 12 months and 80 per cent baulking at reductions to staff remuneration.
Top CEO concerns from a year ago have moved on from health risks to inflation and macroeconomic volatility, which were named as the main short-term challenges by 40 and 31 per cent respectively.
Geopolitical conflict, cyber risks, and climate change were other key issues facing business over the next five years, with particular concerns about the impact of conflicts, such as the war in Ukraine, on supply chains and cyber security.
PwC global chairman Bob Moritz said the global economic situation was forcing CEOs to rethink.
“A volatile economy, decades-high inflation and geopolitical conflict have contributed to a level of CEO pessimism not seen in over a decade,” said Mr Moritz.
“CEOs globally are consequently re-evaluating their operating models and cutting costs, yet despite these pressures, they are continuing to put their people front and centre as they look to retain talent in the wake of the Great Resignation.”
This article was originally featured on 18 January in Accountants Daily.
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Change management is the process of guiding workers through a change by monitoring its effect on their output, morale, and other stakeholders is part of the change. This can be carried out constantly or on a set schedule, such as weekly, monthly, or yearly.
Jack Campbell
Jack is the editor at HR Leader.
