95% of CEOs planning to maintain or hasten business transformation in 2024, global survey finds

The vast majority (95 per cent) of CEOs are planning to either maintain or accelerate business transformational change in 2024, a global survey has found.

The results came as part of global corporate services network Ernst & Young’s (EY) CEO Outlook Pulse for January 2024, published on Tuesday. The study compiles research conducted over the past two months, in which 1,200 CEOs from large companies and 300 investment leaders from the private equity (PE) from around the world answered an anonymous online survey on the main trends and developments in the business space. Respondents represented 21 countries and five industries, namely consumer and health, financial services, industrials and energy, infrastructure, as well as technology, media and telecoms.

The survey’s key finding was that CEOs are both positive and proactive in the short term, with 58 per cent stating that they plan to accelerate their business portfolio transformation over the next 12 months. This is a sharp increase from the 21 per cent from back in July 2023.

This figure is coupled with 37 per cent saying that they expect to maintain their existing momentum in business transformation, totalling a staggering 95 per cent of CEOs seeking to either maintain or accelerate change.

Just five per cent responded that they do not have any business transformation plans for this year.

This push for transformation and reinvention aligns with the findings from another recently-published survey, which stated that 45 per cent of global CEOs believe that their companies will no longer be viable in 10 years’ time if they do not transform their business models.

From a geographical perspective, out of the responding continents, CEOs in the Americas said that they are more likely to accelerate their business transformation at 60 per cent, higher than those from Asia-Pacific (58 per cent) and Europe (55 per cent).

These transformative plans are being fuelled by a wide range of external factors, including technology, market conditions, capital allocation, financial performance, new competition, pressure from activist shareholders, and a focus on core capabilities. In this respect, the impact of technology on reshaping the industry in question, together with taking advantage of market conditions ranked top in terms of influence according to the CEOs.

When asked where the finance for transformation will come from, improving performance and profitability came out on top at 32 per cent. Given that 16 per cent are also seeking to sell non-core assets or spinning off assets, almost half of the CEOs (48 per cent) are looking to internally fund their ambitions.

Both CEOs and PE leaders stated that managing working capital is their top priority when it comes to business strategies for the next 12 months. This was closely followed by the desire to make the best use of artificial intelligence (AI) and other emerging technologies.

CEOs were quizzed about whether AI will deliver efficiency benefits but have little impact on revenue growth, to which 34 per cent strongly agreed and 42 per cent somewhat agreed. Only 11 per cent disagreed with the statement.

Additionally, business leaders were optimistic about their organisations’ performance, with the vast majority stating that they will experience an increase in revenue growth and profitability in 2024 when compared to 2023. Six per cent said that revenue will drop, while seven per cent said that profitability will go down.

In addition to this, as inflation continues to fall, global CEOs remain confident that they will be able to pass on all or more than half of their increased costs to end customers. No CEOs from Europe said that they will not be able to pass any of the increased costs to customers.