Firms Will Not Be Viable In 10-yrs If They Follow Current Path: Global CEOs

In its Global Annual CEO Survey, PwC has said that about 45 per cent of chief executive officers (CEOs) believe their company will not be viable in ten years if it stays on its current path.

The report added that CEOs 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 CEOs among the 45 per cent who are less confident of their company’s viability are slightly more likely than other CEOs 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 is threatened.

Notably, CEOs perceive enormous inefficiencies across a range of their companies’ routine activities—everything from decision-making meetings to emails—viewing roughly 40 per cent 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 USD 10 trillion tax on productivity. 

Generative AI, which about 60 per cent of CEOs expect to create efficiency benefits, could help relieve some routine burdens, the report added.

It also stated that four in ten CEOs 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 CEOs are willing to make complex trade-offs as they strive to boost the sustainability of their businesses," it added.

Meanwhile, two-thirds of CEOs report a reallocation of resources (financial and human) of 20 per cent 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.