Reinvent or bust?

Talk about a startling statistic! 45% of CEOs believe their company will not be viable in ten years if it stays on its current path.

A common reaction to this finding is likely to be “D-uh, what do you expect, GenAI is going to disrupt everything!”. While there may be truth to this, this CEO sentiment stems from more than the advent of GenAI – these leaders consider climate change, customer preferences, and technological disruption to be the primary sources of existential threat.

普华永道 recently published the findings of its 27th Annual Global CEO Survey, of more than 4,700 CEOs in 100+ countries, representing public companies ranging from less than $100M in revenues all the way up to more than $25B, as well as private organizations. The survey report includes rich data on CEO sentiment across a vast array of topics and the actions that the leading companies are taking to reinvent their businesses.

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When I first read these words in a Harvard Business Review article, my mind immediately raced to Andy Grove’s book, “Only the Paranoid Survive”, in which he quipped “sooner or later, something fundamental in your business will change … you may have a hard time even putting a finger on what has changed, yet you know that something has“.

Key takeaways for me include the imperative to be nimble in resource allocation and to embrace ecosystem participants as partners in creating new value.

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A business transformation anecdote:

This statistic also reminded me of a business transformation program I was once involved with. As we began the journey, our consulting partner enquired about our then current situation in a simple yet thought provoking question: "what's the point of departure?", with four possibilities mapped on a 2x2 grid. Members of the executive leadership team and other key stakeholders aligned on Turnaround. I was the lone voice for Burning Platform. As someone who has a strong bias for growth and continuous improvement, I like to imagine the highest potential and seek out opportunities for improvement.

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In that moment, I wondered whether I was underestimating how well things were going or the rest of the team was missing the opportunity to reach for our true potential. There was certainly room for streamlining business processes and creating a more efficient operating model, ideas that are typically raised in a transformation initiative. But I also felt a pressing need to reinvent the business model, given the disruption occurring around the industry and the increasing level of competition gnawing away at our competitive advantages.

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PwC’s report supports the view that urgency is paramount. "In an environment where the stakes are high and the competitive landscape is rapidly evolving, complacency is a risk few can afford."

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Back to the future:

In the previous installment of this survey, twelve months ago, almost 40% of global CEOs believed their companies would no longer be viable in ten years’ time if they continued on their current path. “Are we in the 40% or the 60%?”, they enquired of themselves and their top teams. This year, that number has grown to 45%. I hope this trend abates and we don’t find ourselves asking “Are we in the 50% or the 50%?” next year!

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It’s not all doom and gloom though. Executives who are less confident in their companies’ prospects are more conscious of the threats they face and are doing more to adapt than others. Those who are more confident would do well to objectively assess the competitive landscape and their position within it, create a safe space for the right talent to express differing viewpoints, and gain alignment on the change agenda for reinvention.

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We live in exciting times and I look forward reading the findings of the next iteration of this survey and, more importantly, seeing how the leading companies of today innovate to stay relevant ten years from now.

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What's your point of departure? How bold are you going to be to stay on the leading edge of your industry?

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#businesstransformation #transformation #ceo #pwc #reinvention #potential #change #growth #turnaround #hbr