CEOs turn to upskilling and technology in the race to reinvent

A recent CEO survey highlights the importance of business model reinvention for long-term success, with 23% of local business leaders expressing concerns about the viability of their businesses beyond the next decade without reinvention.

This is one of the findings from PwC’s 27th Annual Global CEO Survey, conducted in October and November 2023. More than 4,700 CEOs were interviewed in 105 countries, including 117 CEOs from New Zealand.

PwC says in a statement that almost all (95%) New Zealand CEOs note they have taken steps to change how they create, deliver, and capture value in the past five years, and 70% have taken at least one action that had a large or very large impact on their company’s business model.

But, while CEOs are taking action, they are faced with a number of immediate challenges:

  • 58% cite the regulatory environment as inhibiting their ability to reinvent their business model to at least a moderate extent.
  • 57% point to competing operational concerns.
  • 41% highlight a lack of skills in their company’s workforce.

Mark Averill, CEO at PwC New Zealand, says that New Zealand businesses are facing both immediate challenges and the need to adapt for the future.

“This raises the question, are CEOs in New Zealand acting fast enough to transform their business models? What we do as leaders in the next two years will significantly influence how our businesses fare in the next 10. Businesses need conviction to make some important decisions – how they adapt now will be a big determinant in long-term success.”

…76% specify a lack of technical capabilities as a barrier to transformation…

Other major findings include:

  • NZ CEOs expect more pressure over the next three years than they experienced over the previous five from technology, customer preferences and several other megatrends.
  • 83% of local business leaders report they have a skills shortage within their organisation and 76% specify a lack of technical capabilities as a barrier to transformation.
  • 61% of local business leaders believe Generative AI will require their workforce to upskill in the next three years.

PWC says the survey results also show that 48% of New Zealand CEOs believe that global economic growth will improve in the next 12 months, a significant increase from 13% in 2023.

Similarly, 52% of local business leaders are optimistic about New Zealand’s economic growth in the coming year, compared to 23% last year.

The firm says that while local business leaders are confident about economic growth, macroeconomic volatility is still seen as a major threat.

“New Zealand CEOs acknowledge some level of exposure for their businesses. Despite some indication that inflation will stabilise, it continues to add pressure to business decisions. However, fewer CEOs (21%) anticipate high exposure to inflationary pressures in the coming year, compared to 38% last year.

The survey also finds that a third of local CEO’s (36%) are extremely confident in their own organisation’s potential for revenue growth in the next 12 months, compared to 39% last year.

…New Zealand CEOs are more optimistic about their three-year revenue growth prospects compared to the shorter term…

It says New Zealand CEOs are more optimistic about their three-year revenue growth prospects compared to the shorter term, with 50% feeling extremely confident.

Averill says that while CEOs continue to navigate a number of headwinds, “there are still plenty of reasons to feel positive about the coming year, with inflation reducing and indicators suggesting that will continue”.

“But, longer-term challenges remain. CEOs need to tackle these and those in the nearer term in a smart and integrated way to make sure they are fit for the future,” he says.

 

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