‘It is about doing it differently’: PwC leaders deliver messages for CEOs navigating business reinvention

Global PwC leaders have urged CEOs to reinvent their business models, focusing on doing things differently than they are used to, if they truly want their organisations to be successful in the long term.

Earlier this year, the 27th edition of PwC’s Annual Global CEO Survey was released, pointing towards a relatively mixed picture when it comes to the global business landscape over the coming years. One of the key findings was that 45 per cent of global CEOs believe that their companies will no longer be viable in 10 years’ time, should they continue on their current trajectory. This lack of confidence proved to be higher than it was in 2022 (40 per cent).

CEOs have thus been encouraged to reinvent their business models, especially with the increased importance of technology, climate change, and customer preferences.

Bob Moritz, PwC Global Chairman, remarked that the CEO community will need to focus on three or four areas if they want their businesses to thrive in the long run.

“First and foremost, they really have to define where they want to go and what they want to be over the next decade,” he said, before adding that it all boils down to knowing where their customers are going.

“You’ve got to be so customer-centric, client-centric, so to speak, to make that come to life. Because if you’re not relevant to them, you’re out of business,” Mr Moritz continued.

Interestingly, the survey found that many executives feel that most of the constraints on the reinvention of business models falls squarely within the realm of influence of CEOs, with these including bureaucratic processes, limited financial resources, workforce skills and technological capabilities. According to the study, on average, 40 per cent of the time spent on meetings, administrative processes and emails is inefficient.

Mr Moritz stressed that businesses, and CEOs more specifically, “cannot do it all,” and therefore must prioritise certain tasks and areas to work on. “So, the other theme is very much focus, focus, focus,” he added.

He also pointed out that CEOs need to get their leadership teams aligned. “You’ve got to have it at the top of the house coupled with the middle management, because those are the ones that are in day in and day out. So, you’ve got to make sure that you’ve got alignment and execution,” Mr Moritz added.

PwC UK and Global Climate Leader Emma Cox affirmed that CEOs “need to really take stock of their climate strategy” in a more holistic way than just “one single-minded-point.” She remarked that leaders need to incorporate a more strategic approach to understanding the risks and dependencies on climate and on the wider factors that influence climate.

In the survey, CEOs stated that they are anticipating more pressure with regards to climate change in the next three years than they have done over the previous five.

Ing Cox said that nature and sustainability is an area where a lot of CEOs are “at the start of their journey.”

“So, they need to think how they are going to develop their nature-based strategy and assess their company’s dependence on natural ecosystems. We’ve seen that leaders are starting to assess these benefits and trade-offs in quite a sophisticated and complex way,” she added.

In fact, four out of 10 CEOs surveyed had said that they would accept lower rates of returns for climate friendly investments.

One of the main points highlighted in the study concerned the rapid development of generative artificial intelligence (AI) and related technologies, particularly since the integration of such technologies has prompted many experts to voice their concerns over any unintended consequences that may take place. Business leaders need to ensure that their organisations use AI in a responsible manner, especially when considering the rise in cybersecurity risks tied to greater innovation and more technological proficiency.

Mohamed Kande, PwC US Vice Chair, explained that CEOs believe that they are at a “critical juncture” when it comes to AI. More than half of respondents had stated that they feel generative AI will have some transformative power for them to build more trust with stakeholders and with their people. Mr Kande noted that CEOs also need to realise that AI enables them to deal with customers “in a very different way.”

“For CEOs today, they have to balance long-term implications, but also short-term implications,” he said.

“The CEOs we talked to were telling us that they believe that generative AI is going to lead to headcount reductions in the short term, but they know that in the long term, new jobs will be created. There will be additional value created,” Mr Kande affirmed.

PwC Global Markets and Tax and Legal Services Leader Carol Stubbings was in agreement with Mr Kande, stating that the impact of AI is going to be “profound,” not just on the business itself, but also on the workforce.

AI will be integral in terms of identifying potential “productivity increases” and “creating capacity for new opportunities.” “It’s really important that CEOs focus on reskilling and upskilling their workforce,” she said.

Last month, AI Professor Alexiei Dingli told MaltaCEOs.mt that manufacturing and retail are two of the primary industries that will be most impacted by AI adoption locally, as failing to incorporate this can lead to reduced efficiency and quality on multiple fronts.

Ms Stubbings remarked that those organisations that are agile in terms of who they partner with, how they allocate resources, how they allocate capital, will be “much more successful” and are “growing faster” than those that don’t.

“So, it’s really important when you’re really challenged around allocation of capital, for example, that you really look at it every year and you redeploy it where it makes sense. And the data and the statistics demonstrate that the organisations that do that are the ones that are growing faster,” Ms Stubbings added.

Wrapping up, Mr Kande said: “Reinvention is key, but it’s not about making money the same way for CEOs. It’s about doing it differently.”