From COVID-19 and climate change to digital transformation, businesses have been tested to their limits of late. As challenges persist, corporate leaders could be forgiven for approaching the future with a sense of trepidation.
Yet they are not.
Our ‘2023 CEO Insights’ report findings paint a picture of resilience and resolve.
Meeting challenges head on
Arthur D. Little spoke to almost 250 CEOs of companies with a turnover of more than $1 billion. The aim of the study was to gain the chief executive take on the future, with many of the findings unexpected and even counterintuitive.
Despite current challenges and ominous economic forecasts, most CEOs interviewed expressed optimism about the future. Nearly two-thirds—63 per cent globally and 60 per cent in the Middle East—expect a stable or positive global economic outlook over the next three to five years, with the pursuit of new growth through innovation, investment, and ingenuity featuring highly on corporate agendas.
This is the age of the ambidextrous CEO – leaders who can manage both operational excellence and new innovations with apparent ease. Having survived - even thrived - during the pandemic, their mindsets are positive and they feel their organizations are well-positioned to cope with the unpredictable and unforeseen.
The GCC: a case in point
Ambidextrous CEOs are evident across the GCC, with examples emerging in travel and transportation, among other sectors. On the one hand, COVD-19 pushed airlines and airports into large-scale efficiency programs to cut costs. On the other, these same companies are now forming partnerships to innovate and offer new services to passengers.
Notably, Abu Dhabi’s $3 billion Midfield Terminal will soon open to enhance carrier, traveler, and employee experience and meet ambitious sustainability targets.
To further accelerate growth and innovation, the region’s CEOs identify a need for moderate reskilling of employees in the travel and transportation industry, as well as in sectors such as telecom and financial services. Meanwhile, notable reskilling endeavors are already underway in healthcare, manufacturing, and energy and utilities.
Innovation and tech
When it comes to growth, ADL’s research shows that CEOs are concentrating on innovation, with 26 per cent listing tech innovation as the most critical factor. In the Middle East and Africa, this percentage rises to 29 per cent, with raw material prices, and supply chains also priority areas. Additionally, cyber risk was viewed as an urgent growth factor by 13 per cent of CEOs in MEA, ahead of Europe (10 per cent) and North America (9 per cent).
Interestingly, while digital transformation has been a central concern for organizations, the study shows that ambidextrous CEOs are now shifting focus to large-scale adoption of new technology to drive efficiency, optimization, and differentiation.
Alongside innovation, Environmental, Social, and Governance (ESG) efforts emerged as an important focus area for CEOs. Two-thirds of the study participants admit they pursue ESG goals for compliance reasons, but 80 per cent also see them as a source of competitive advantage.
While there are variances between sectors, ESG is also rising in strategic importance, with 41% of CEOs making it a higher priority than other initiatives.
Despite broad consensus among CEOs on many key topics, differences in opinion exist between sectors, with the current turbulence creating a spectrum of winners and losers. For instance, 80 per cent of energy and utilities CEOs believe the global economic outlook will either improve or remain stable over the short to medium term.
The telco sector is also positive, demonstrating its position as a critical part of everyone’s work and daily lives. In contrast, industries that did not benefit from the recent crises are pessimistic, with 59 per cent of financial services companies expecting a decline in the global economy.
Whatever their sectoral or geographical differences, CEOs are united in their pursuit of growth and success. In a context of ongoing uncertainty, the following action points can help business leaders edge closer towards their goals:
- Pursue a growth-oriented strategy and engage with government.
- Balance resource allocation between optimization and growth priorities.
- Fill capability gaps and build organizational agility.
- Build a comprehensive technology transformation agenda and invest in scaling technology usage.
- Move from intent to action on ESG.
It will take a bold leader to navigate the current turmoil and build the companies of the future. However, CEOs at the helm of some of the world’s largest organizations are demonstrating that they have what it takes to make their businesses thrive, sometimes against the odds.