PwC
Jan. 15, 2024
- The impetus to reinvent is intensifying. Chief executive officers expect more pressure over the next three years than they experienced over the previous five from technology, climate change, and nearly every other megatrend affecting global business.
- Survival-conscious chief executive officers among the 45% who are less confident of their company’s viability are slightly more likely than other chief executive officers to have taken action aimed at reinventing their business models. Small company chief executives are more likely than their larger company counterparts to feel their company’s viability threatened.
- Chief executive officers perceive enormous inefficiencies across a range of their companies’ routine activities—everything from decision-making meetings to emails—viewing roughly 40% of the time spent on these tasks as inefficient. A conservative estimate of the cost of that inefficiency would be tantamount to a self-imposed US$10 trillion tax on productivity. Generative AI, which about 60% of chief executive officers expect to create efficiency benefits, could help relieve some routine burdens.
- Four in ten chief executive officers report that they have accepted lower hurdle rates for climate-friendly investments than for other investments—in the majority of cases, between one and four percentage points lower. This is clear evidence that some chief executive officers are willing to make complex trade-offs as they strive to boost the sustainability of their businesses.
- Meanwhile, two-thirds of chief executive officers report reallocation of resources (financial and human) of 20% or less year to year. The connections among reallocation, reinvention, and financial performance suggest that more aggressive reallocation—up to a point—is required to succeed.