The Next Leap: Charting the Path to Change

They also seem confident about growth of their companies’ revenues in the coming years (92% confident of improvement in the coming 12 months and 99% confident about such growth in the coming 3 years) with the majority (54%) not expecting any significant change in their current staffing levels. ​

Yet, they continue to feel significant exposure of their businesses to the risks of macroeconomic volatility (46%), inflation (39%) and geopolitical conflict (31%), among others. The proportion of those feeling significant exposure to inflation last year has, however, decreased as it was 55% last year.​

Consistent with the last year, many of the CEOs (44%) believe there is a significant need to reinvent their business models as their businesses shall no longer remain viable beyond 10 years otherwise. ​

We note that businesses expecting lower viability (10 years or less) consider external factors (changes in regulatory environment and increasing products/services costs being the top two), whereas those expecting higher viability (more than 10 years) consider internal factors (organisational efficiency and correct strategic choices being the top two) as the factors which most influence such viability.​

The need to reinvent seems to have increased the pace at which businesses are reallocating both their financial (85% respondents reallocating some resources) and human resources (87% respondents reallocating some resources) across their business units and focusing on, among others, targeting new customer base, developing innovative products and services, and implementing new pricing models.​

Reinventing the business model is also increasingly leading a majority (54%) of respondents’ businesses to compete in new sectors and industries where they hadn’t previously competed, with consumer, retail and real estate being top new sectors on the list. Although the average of the percentage of revenue that companies got from new businesses – a measure of how fast they are growing beyond the core – may be modest, it is clear that this trend is poised to increase, and the proportion of such revenues are expected to grow over time.​

Additionally, some businesses are seeing early returns relating to AI, especially in the areas of profitability (27% respondents) and efficiencies in time at work for both the CEOs (51% respondents) and the employees (53% respondents), but the actual returns seem yet to catch up to the expectations. ​

Q. To what extent will generative AI increase or decrease the following in your company in the next 12 months? (CEO27, 2024)

Q. To what extent did generative AI increase or decrease the following in your company in the last 12 months?​

Although many CEOs expect AI’s significant systematic integration into many processes, especially those relating to Technology Platforms (45% respondents), business processes and workflows (35% respondents) and workforce and skills (31% respondents), some also hint at significant trust issues (6% respondents) in embedding AI into their key processes which indicates a need for businesses to foster transparency, demonstrate AI’s efficacy, and provide training to build confidence. ​

Climate also comes out as a key area of focus with more respondents (39%) believing it to have increased their revenues than those (34%) who believe it to have increased their costs. Also, majority of respondents (58%) reported that they have some proportion of their personal incentive compensation determined by sustainability metrics. ​

The Survey clearly depicts that most of the respondents have cautiously started taking some steps towards reinvention based on the significant trends relating to AI and climate affecting their businesses, but the momentum needs to accelerate further if their businesses are to sustain their confidence in entering the unknown future.​