|| Winning today's race while running tomorrow's ||

PwC

 

The February edition of The Hub brings you a survey report from PwC titled "26^th Annual Global CEO Survey: India perspective" which covers views of CEOs based in India along with CEOs based in different geographies. 

The responses were recorded on a set of nine questions divided in three categories a) the race for the future, b) today's tensions and c) a balanced agenda. For business leaders in India operating in an interconnected world, the slowing growth in major economies — along with inflation, macroeconomic volatility, climate change and geopolitical risks — is of urgent concern. Almost 3/4^th of CEOs see a decline in global growth. About 57% of Indian CEOs, believe that India's economic growth will improve over the next 12 months. The survey also indicates that given the changing customer demands and supply chain disruptions, CEOs are looking at reinventing their companies over the next five years with the required investments in technology and people — both leaders and workers — without reducing the workforce size, to better meet the challenges of the future. 

The key actions recommended for the CEOs are -

• address the potential for widespread business disruption 
• develop corporate climate strategies 
• assess the time horizons of critical risks 
• connect today's circumstances with tomorrow's outlook 
• balance strategies for business resilience and workforce retention 
• plan for contingencies arising out of geopolitical events 
• invest time and money in the future 
• redefine their role as leaders to empower change 
• develop collaborative ecosystems to create new sources of value 

The 26^th Annual Global CEO Survey reveals that: 

• 67% of India CEOs are adjusting supply chains to mitigate exposure to geopolitical conflict. 
• 60% of India companies are currently innovating new, climate-friendly products or processes. 
• 59% of India CEOs are reducing/have already reduced operating costs. 
• 85% of India CEOs do not plan to reduce the size of their workforce, while 96% do not plan to reduce compensation. 
   

Section A- The race for the future

 

Responses to this set of questions reveal that CEOs recognise the potential for long-term megatrends such as climate change, technology disruption, demographic shifts, a fracturing world and social instability to dramatically reshape the business environment.

Q1: What is the half-life of your business?

So much so that 40% of global and 41% of India respondents say that they do not expect their companies to be economically viable in 10 years if they continue on their current path, and see multiple challenges including Changing customer demand/preferences, Changes in regulation, Technology disruptors, Supply chain disruption etc to profitability in their industry.

Q2: When will your company's climate clock run out?

Over the next 12 months, global and India CEOs see climate risk impacting their supply chains and cost profiles. While those who are more impacted by climate change are the ones taking the most action, it is advisable to act early to minimise the impact of climate change. About 72% of India CEOs (as against about 60% of global CEOs) have implemented or are implementing initiatives to reduce their company's emissions.

Q3: Should you bring your key risks forward?

India and global CEOs identify inflation and macroeconomic risks followed by geopolitical conflict as the biggest threats to their businesses in the short term. Climate change gains prominence as a cause for concern for India CEOs over the next five years, with 31% voicing that they believe their companies will be extremely/highly exposed to it.

Section B- Present day tensions

 

Q4: How much is your mood today affecting your view of tomorrow?

About 78% of India CEOs believe that global economic growth will decline over the next 12 months. India CEOs are hopeful about the country's economic growth: More than five in ten CEOs (57%) express optimism about India's economy over the next 12 months. 

Q5: How do your resilience and workforce strategies fit together?

About 93% of India CEOs saying that they are cutting, have cut or are considering cutting operating costs and spurring revenue growth to mitigate economic challenges and volatility. About 85%, however, stress they will not reduce the size of their workforce, and 96% state they do not plan to reduce compensation – demonstrating their resolve to retain talent.

Q6: As geopolitical risks rise, what new contingencies are you preparing for?

Geopolitical flashpoints have prompted CEOs to factor in disruptions in their scheme of things. 67% of India CEOs say that they are adjusting supply chains; 59% highlight they are diversifying products and services; 50% emphasise that they are increasing investments in cybersecurity and data privacy, and 48% mention adjusting their presence in current markets and/or expanding into new markets. India business leaders believe avoidable and unnecessary organisational complexity poses ‘concerning' cyber and privacy risks. 

Section C-  A balanced agenda

 

Q7: How much time and money are you investing in the future?

To effectively navigate the dual challenge of dealing with the present while preparing for the future, CEOs must perform a balancing act that starts with their own calendars. For 26% of India CEOs, driving current operating performance ‘actually' consumes the biggest share of their time. Around 85% of India respondents are investing in upskilling their workforce in priority areas, 82% in automating processes and 81% in deploying technology such as cloud and AI over the next 12 months. To preserve their current business and to reinvent for the future, both global and India CEOs flag investments in deploying advanced technologies as a priority.

Q8: How central are YOU to your company's reinvention?

Reinventing the business, ensuring it is future-fit while navigating near-term operating challenges requires C-suite leaders, middle managers and front-line employees to work in tandem. About 78% of India CEOs say that the leaders of their company rarely or just occasionally make strategic decisions for their division or function without consulting them. Around 65% say that the leaders encourage dissent and debate. CEOs and their top teams have to drive change and business reinvention top-down in the years ahead.

Q9: What kind of ecosystem are you building?

73% of CEOs collaborate with non-business entities to address sustainable development, while 57% of CEOs collaborate on education. 
The survey indicates that 31% of India companies are more likely to collaborate with industry consortia to create new sources of value, while only 22% work with industry consortia to address societal issues.

Trust, leadership and the C-suite conversation

The growing importance of trust is deeply intertwined with the changing nature of leadership due to the increased complexity of stakeholder dynamics, the growing need for the private sector to help solve important societal problems and the intensification of geopolitical and social tensions. CEOs have often been participants in these shifts. In the near term, CEOs across the world need to prioritise and manage external risks and challenges to survive and drive profitability. But in the long term they need to reimagine, reinvent and reconfigure their businesses and work culture to thrive.

 

(IICA duly acknowledge the authorship/ownership of PwC for this Survey Report and republishing it with sole objective of education.)