Disruption has turn out to be the norm in enterprise over the previous couple of years, and leaders are getting higher at managing it after greater than three years of volatility attributable to the pandemic, provide chain instability, employee shortages, and inflation. However newly rising elements outdoors of executives’ management are setting the agenda within the new yr—placing CEOs within the sizzling seat, with many fearing they are going to lose their jobs, based on new analysis from international consulting agency AlixPartners.
The agency’s fifth annual Disruption Index, based mostly on its survey of greater than 3,000 CEOs and senior executives around the globe, uncovers the newest international enterprise considerations, not the least of which is an more and more unpredictable election season within the US.
A brand new age of disruptions is poised to rise in 2024
Whereas the pandemic period challenges of provide chain instability, employee shortages, and inflation are largely within the rear-view mirror, enterprise leaders proceed to specific uncertainty concerning the future and are more and more fearful about intensifying points which can be past their management. Geopolitical occasions, together with the tragic wars in Ukraine and Gaza, the flamable 2024 US Presidential election, and ongoing friction with China, are inflicting them to regulate their technique.
New applied sciences, specifically Generative AI, are their largest disruptive alternative over the subsequent yr, however on the identical time a majority of CEOs say their firm can’t sustain with the tempo of technological change. Most enterprise leaders really feel strain to take a stance on environmental points from authorities and regulators, their buyers and board, their clients, and their staff and group members. Greater than a 3rd of enterprise leaders say their firm has been impacted by environmental considerations. Rate of interest and the inflationary uncertainty proceed to be a priority, and one-third nonetheless see the potential for recession on the horizon.
“CEOs largely navigated 2023’s bumpy street of disruptions efficiently, however the best way ahead seems to be each bit as rugged and with extra hidden curves, demanding even higher agility, acceleration, and velocity. We’re getting into a brand new age of post-pandemic, long term, and fewer controllable disruptive forces. Though our survey means that an rising variety of leaders are feeling extra assured of their potential to handle disruption, there’s no room for complacency,” mentioned Simon Freakley, CEO of AlixPartners, in a information launch. “Those that succeed would be the ones who act shortly and decisively within the face of exterior challenges and on the identical time execute brilliantly on the elements underneath their direct management. The winners shall be those that can harness exterior problem for inside profit, specifically by unlocking the power multiplier impact afforded by AI.”
CEOs are nonetheless within the sizzling seat, however those that take the wheel shall be within the driver’s seat in 2024
Nervousness stays prevalent amongst CEOs, with almost 60 % say they’re fearful about shedding their job resulting from disruption. Almost all CEOs anticipate needing to overhaul their enterprise fashions within the subsequent yr resulting from disruptive forces, and about one in three CEOs establish AI as a very powerful digital problem to handle in 2024—extra so than every other expertise. Nevertheless, these leaders who say they’re main their trade in progress and revenue are more likely to be driving disruption than reacting to it. They’re much extra more likely to be investing extra in expertise and information. New applied sciences, specifically Generative AI, are the largest disruptive alternative over the subsequent yr recognized by 68 % of executives within the survey.
“Gen AI is each thrilling and daunting for leaders and society at giant,” mentioned Freakley. “What is obvious is that the prospects for enterprise are important and can end in large productiveness beneficial properties in addition to model new vectors for income progress, worth creation, and reskilling at these organizations who finest acknowledge and act upon the chance.”
On this new age of disruption, prime areas of concern embody:
About two-thirds (66 %) of CEOs say they fear concerning the affect of the 2024 US presidential election on their firm, and 68 % of CEOs report that US-China tensions are inflicting them to regulate their technique.
New applied sciences, specifically Generative AI, are the largest disruptive alternative over the subsequent yr recognized by 68 % of executives, however on the identical time 63 % of CEOs say their firm can’t sustain with the speed of technological change.
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Local weather change and the transition to scrub vitality
Most enterprise leaders really feel strain to take a stance on environmental points from authorities and regulators (68 %), their buyers and board (64 %), their clients (58 %), and their staff and group members (57 %). And 37 % of enterprise leaders say their firm has been impacted by environmental considerations.
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Macroeconomic surroundings
4 in 19 (41 %) of executives surveyed report instability in rates of interest and the inflationary surroundings to be a risk, and one-third nonetheless see the potential for recession on the horizon.
What’s protecting CEOs up at night time?
- Almost 60 % of CEOs surveyed fear about shedding their job.
- Roughly 30 % of CEOs say they’re extra anxious of their function than a yr in the past—and solely 15 % say they’re much less anxious.
- Virtually two out of three CEOs report a excessive stage of disruption for his or her firm over the previous yr (65 %).
- Almost all CEOs (91 %) anticipate needing to overtake their enterprise fashions within the subsequent yr resulting from disruptive forces.
- Almost 80 % of CEOs report feeling strain to take a stance on environmental and social points from staff, clients, and buyers/boards, in addition to from regulators.
- Almost one in three CEOs establish AI as a very powerful digital problem to handle in 2024—extra so than every other expertise.
However these within the driver’s seat are taking motion
Simply 8 % of the businesses surveyed say they lead their trade in progress and revenue. Right here’s what these enterprise leaders say differentiates them from the remaining:
- They’re extra disrupted general and more likely to drive disruption (74 %) than react to it (20 %).
- 63 % anticipate their enterprise fashions will change considerably within the subsequent yr, and 18 % anticipate to see a complete enterprise mannequin change within the subsequent yr (over 4x the common).
- They’re much extra more likely to be investing extra in expertise and information: over half say they’re totally exploiting the benefits information provides them in gross sales, buyer expertise, operations, and provide chain.
- 95 % say their workforces totally perceive and help their firm’s digital tech goals.
Giant gaps stay in generative AI adoption
- Executives in our survey recognized new applied sciences as the biggest disruptive alternative for his or her corporations, particularly highlighting AI as a very powerful digital development to handle within the subsequent 12 months.
- 30 % of enterprise leaders say AI is a very powerful expertise for his or her firm to handle within the subsequent 12 months. Nevertheless, extra survey findings discovered that they don’t seem to be but taking full benefit of this chance.
- Whereas 59 % of executives are at present investing in generative AI, solely 28 % report that it’s totally embedded throughout their organizations and workflows.
- Many additionally word that they’re nonetheless grappling with considerations round AI, together with lack of human contact, moral concerns, authorized and regulatory compliance, and an absence of accuracy and reliability.
Obtain the total report right here.
All information is sourced from the 2024 AlixPartners Disruption Index survey.
