Business leaders believe reinventing their operations is key to long-term viability as the competitive market environment continues to change, but many feel the pace of reinvention is constrained by inaction across leadership and organisational processes, a new survey report from PwC found.
The 28th edition of PwC’s Global CEO Survey found that four in ten CEOs think their company will no longer be viable in ten years on its current path, consistent with their findings from the previous year. In response to longevity concerns, almost 40% of CEOs say their companies have begun competing in new sectors over the last five years.
PwC surveyed 4,701 CEOs globally in October and November 2024.
Despite concerns about the sustainability of business models, CEOs are optimistic about the near-term outlook for their organisations. Almost 60% expected global economic growth to increase over the next 12 months, the report said, up from 38% in last year’s survey and 18% two years ago.
This optimism also means business leaders are planning to increase rather than decrease (42% v 17%) headcount in the year ahead.
But some leaders risk falling behind as innovation efforts lag behind sentiment. Only 7% of revenue over the last five years, on average, has come from distinct new businesses added by their organisations, the report said. According to respondents, this slow growth is aided by leaders who are resistant to change.
Other barriers to reinvention include weak decision-making processes, low levels of resource reallocation from year to year, and a mismatch between the short tenure of many CEOs and powerful long-term global influences.
For companies competing in new sectors, initiatives such as new pricing models, new routes to market, or new alliances have been small, with about one-third of CEOs making cross-sector moves that represented 20% or more of company revenue in the past five years.
Alliances and partnerships are “essential sources of learning” (as well as revenue) on the journey towards new domains of growth, the report said, and new expertise within the executive team could help to map the way.
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