Today’s CEOs are starkly aware of the potential for disruption ahead. Just take a look at one of the more striking figures from PwC’s latest Global CEO Survey: nearly 40% of the survey’s 4,410 participants offered a wary estimation of their company’s half-life, predicting that their business will no longer be economically viable a decade from now, if it continues on its current path. That pessimism is consistent across a range of economic sectors, including technology (41%), telecommunications (46%), healthcare (42%) and manufacturing (43%). When asked about the forces most likely to impact their industry’s profitability over the next ten years, about half or more of the leaders surveyed cited changing customer preferences, regulatory change, skills shortages and technology disruption. Roughly 40% flagged the transition to new energy sources and supply chain disruption. And nearly one-third pointed to the potential for new entrants from adjacent industries. Underlying these figures is a consciousness among today’s leaders that we are living through extraordinary times, with megatrends like climate change, technological disruption and social instability reshaping the business environment.
No surprise, then, that so many CEOs feel they’re in a race to reinvent. But how to win that race? In their 2022 book, Beyond Digital, PwC’s Paul Leinwand and Mahadeva Matt Mani say leaders must start by reimagining their company’s place in the world—looking beyond the current portfolio of businesses and products to determine what value their organisation will create, and for whom. Such reimagination often involves hard choices about what not to do. To give an example cited in the book, when the Amsterdam-based multinational Philips reinvented itself as a health-technology company, it not only had to bring together its consumer-insights capabilities, expertise in medical-device technologies, and strengths in data analytics and artificial intelligence; it also had to exit or deemphasise some of its businesses. As Frans van Houten, the CEO at the time, described it, ‘I recognized that the chances that we would transform lighting and healthcare simultaneously were not so high. And so we made a choice.’
See how 4,410 chief executives in 105 countries and territories responded to other critical questions in PwC’s 2023 Global CEO Survey.
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