Arthur D. Little (ADL) today launched its 2023 CEO Insights Study, highlighting that the leaders of the world’s biggest companies are confident despite the current turmoil. Sixty-three percent expect a stable or positive economic outlook over the next three to five years.
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Arthur D. Little CEO Insights 2023: Turning turmoil to advantage: How CEOs are navigating change to drive growth (Graphic: Business Wire)
Despite the downturn, CEOs are focused on growth – half say they will enter new geographies, and 30 percent expect to grow faster than the wider market. Even cautious CEOs expect to increase growth investments, with 40 percent spending more and 55 percent keeping expenditure constant. At the same time, leading CEOs are becoming truly ambidextrous, combining this innovation with laser focus on cost optimization.
CEO confidence in the future can be attributed to the lessons learned from the pandemic, which forced many businesses to transform their operations. Ninety-one percent of CEOs understand that developing fit-for-purpose capabilities that drive optimization and efficiency, as well as innovation and growth, are now mission critical. This is likely to lead to a different capability mix enabling companies to unleash their full potential moving forward.
However, there are differing pictures between regions. Thirty-eight percent of European CEOs in the top five economies of France, Germany, Italy, Spain, and the UK expect to see a positive economic outlook over the next three to five years, against just 25 percent of those in North America and 10 percent in Asia.
CEOs see technology innovation as the most critical factor to company growth, and are moving beyond digitalization to embrace technologies such as AI, robotics and automation. They are also looking forward – 60 percent want to explore new technologies, and 27 percent believe the metaverse and virtual reality will impact their business.
Hearteningly, 80 percent of CEOs believe focusing on environmental, social and governance (ESG) delivers competitive advantage, rather than simply being a compliance cost. In fact, 41 percent of CEOs rank it as a higher priority than all other initiatives.
Francesco Marsella, Managing Partner and Global Practice Leader, Strategy & Organization at Arthur D. Little, comments: “In a downturn, conventional business wisdom is to cut costs and focus on survival. Despite current challenges and many dark macroeconomic predictions for 2023, most CEOs we spoke to are optimistic for the future, working with passion, entrepreneurship, and creativity to manage performance today while building for the future. They see opportunity in adversity, looking beyond the current crisis to embrace a more positive future for their companies and wider society.”
The Arthur D. Little 2023 CEO Insights Study interviewed nearly 250 global CEOs leading companies with a turnover of more than USD 1 billion. Fifty-five percent of the sample employed over 10,000 people. Study respondents are split between key industries and geographies to give unrivaled insight into the minds of those running the world’s biggest organizations.
The full report, including recommendations from ADL, can be downloaded from https://tinyurl.com/ypc7yvx4.