1、P OSITIVE IN AN UNCERTAIN WORLD:CONFIDENT CEOs RESK ILL COMPANIES FOR AI-DRIVEN GROW THCEOs prepare for sustainable future through increased tech adoption,internal talent development2024CEO INSIGHTSCONTENTFOREWORD 3EXECUTIVE SUMMARY 51.ANALYSIS:4 KEY TRENDS FROM TODAYS CEOs 62.HOW SECTORS COMPARE 20

2、CONCLUSION:CEO LESSONS FOR SUCCESS 24We would like to acknowledge all those who contributed in the review of this Report,especially:Michael Eiden and Greg SmithFRANCESCO MARSELLAManaging Partner Global Practice Leader,Growth&Transformation RomePETTER KILEFORSManaging Partner Head of Arthur D.Little

3、Nordics StockholmMAXIMILIAN SCHERRPartner Practice Leader,Growth,Austria ViennaRALF BARONPartner FrankfurtSATYA EASWARAN Partner New Delhi 2Across the globe,the last 12 months have seen increased instability,driven by myriad factors,including deepening geopolitical rivalries and conflicts,diverging

4、economic fortunes,and the growing impacts of climate change and artificial intelligence(AI).All of this follows a period when the pandemic accelerated the importance of digitalization,driving wide-scale transformation,which still needs to be completed in many cases.Year-over-year,the range and depth

5、 of risks are accelerating,meaning that CEOs truly find themselves and their companies having to navigate in a volatile,uncertain,complex,and ambiguous(VUCA)world.At Arthur D.Little(ADL),we have been working with CEOs of the worlds leading businesses for more than 137 years,listening to their needs

6、and helping them innovate and transform to thrive in a fast-changing world and successive industrial revolutions.But changing times called for a new approach in exploring how business leaders of the worlds US$1 billion-plus companies across different industries were reacting to a turbulent present a

7、nd uncertain future.Thus,last year,we launched the first in our ongoing series of flagship“CEO Insights”research studies.Through hundreds of conversations and months of research,we looked to answer key questions,such as:-How are CEOs reacting to current disruption?-How has their outlook changed year

8、-over-year?-How are they structuring their strategies and organizations moving forward?-Where are they investing for growth?-How are they coping with pressing trends,such as AI and environmental,social,and governance(ESG)?FORE WORDARTHUR D.LITTLE3For this 2024 edition of“CEO Insights,”we found stron

9、g,positive grounds for optimism.Hearteningly,CEOs of leading businesses are not merely focusing on survival but are increasingly confident about the prospects for their organizations and the wider economy.We found 66%to be highly positive about the global outlook over the next three to five years,a

10、result that has tripled since 2023.Behind this optimism,CEOs are significantly increasing their growth investments and navigating short-term uncertainty through resilient strategies and organizations built to handle a VUCA world.Moving forward,they are enthusiastically embracing new opportunities li

11、ke AI,seeing it as a catalyst for growth,and are looking to develop their people to unlock its potential.ESG is becoming a holistic part of strategies as CEOs embed it across their organizations.At times of disruption,the natural but ultimately flawed approach can be to concentrate only on the short

12、-term volatility and uncertainty of VUCA.Our study shows that todays global CEOs are truly ambidextrous and are adopting the opposite strategy,looking to deliver on the short term,by transforming short-term uncertainties into opportunities while working on the long term building a better future for

13、us all.Ignacio Garca AlvesChairman&Chief Executive Officer Arthur D.Little4REPORT:POSITIVE IN AN UNCERTAIN WORLDE XECUTIVE SUMMARYTHE FUTURE IS BRIGHT&GETTING BRIGHTER DESPITE INSTABILITYLooking beyond current turbulence,CEOs of the worlds largest companies are increasingly positive about the prospe

14、cts for growth and are positioning themselves and their workforces to seize the opportunities that AI brings,according to the results of our 2024“CEO Insights”study.While CEOs are navigating todays choppy business waters with caution,they are investing for a brighter future,based on the resilient or

15、ganizational structures they now have in place.As AI impacts their businesses,they are reskilling their workforces and looking internally to develop the talent they need to exploit opportunities moving forward.Rather than being cowed by uncertainty,CEOs are thriving in a time of turmoil,understandin

16、g that volatility is now the new normal in the world of business.They are focusing on ambidexterity,1 marrying innovation and productivity to enable success in a VUCA world.Combining longer-term vision and innovation with short-term caution,CEOs are committed to driving business growth,centered arou

17、nd a combination of their people and AI working in harmony.1 We define ambidextrous organizations as those that balance the opposing needs of being agile and creative with being productive and driven by scale.For more background on ambidexterity,see ADLs Prism article,“Ambidextrous Organizations How

18、 to Embrace Disruption and Create Organizational Advantage.”ARTHUR D.LITTLE5Figure 1.CEO views on global economic outlook1.ANALYSIS:4 KE Y TRENDS FROM TODAY S CEO sIn-depth analysis of ADLs latest“CEO Insights”study enables us to draw four clear conclusions,which apply generally across both geograph

19、ies and different vertical sectors.TREND 1:POSITIVE FUTURE OUTLOOK:SIGNIFICANT SHIFT IN CONFIDENCEThe last 12 months have seen CEOs face an expanding range of challenges,from conflict and geopolitical rivalry to rising costs.Despite this,the headline finding is that CEOs are positive and confident a

20、bout the medium-term(three to five years)economic outlook(see Figure 1).CEOs ARE POSITIVE AND CONFIDENT ABOUT THE MEDIUM-TERM ECONOMIC OUTLOOKTwo-thirds(66%)expect a positive global outlook compared to just 22%in 2022 implying that they believe the bottom of the market has already been reached or wi

21、ll be reached shortly.Just 4%forecast a deterioration in the global economic outlook,compared to 37%last year.Optimism is even stronger among larger($10 billion+revenue)companies,where 84%expect the medium-term outlook to be positive,against 60%of their smaller peers.Source:Arthur D.LittleSource:Art

22、hur D.LittleFigure 1.CEO views on global economic outlookHow do you expect the global economic outlook to evolve in the next 3-5 years?66%72%55%66%61%55%78%72%29%26%42%30%37%25%16%28%4%5%20%6%Total2%Europe(Big 5)3%Europe(other)North America2%Middle EastSouth AmericaAsia0%AfricaDeteriorateStableImpro

23、ve6REPORT:POSITIVE IN AN UNCERTAIN WORLDARTHUR D.LITTLEGlobal confidence,regional highlightsThis turnaround in optimism is strongest in Asia,where three-quarters(78%)of CEOs forecast positive growth,compared to 10%in 2023.CEOs within the Big Five economies of Europe(France,Germany,Italy,Spain,UK)wer

24、e equally bullish,with 72%predicting positive global growth,nearly doubling from 38%in 2023.Even in the least positive regions(Latin America and Europe outside the Big Five),a majority of CEOs predict medium-term global growth.Stable perspective on external growth factorsWhen asked to name the most

25、critical external factors impacting their companys future growth,CEOs generally focus on the same themes as a year ago(see Figure 2).Technology innovation,including AI,remains the most critical factor globally to drive growth.However,concerns over supply chain stability have been overtaken by a need

26、 to cope with rising raw material prices,including energy costs.Globally,this has nearly doubled from 11%to 21%in the past year.This trend is particularly strong in Europe and North America though its importance has dropped in the Middle East,potentially due to easier access to energy resources(e.g.

27、,oil and gas).Over the same period,the perceived criticality of environmental issues has dropped from 10%to 2%,perhaps due to more advanced and integrated ESG strategies being put in place.CEOs highlight social issues as among the least relevant factors to their growth,with just 2%seeing it as criti

28、cal.Examining growth factors by company size,CEOs of larger organizations express the greatest concern around energy prices,as well as seeing supply chain and globalization challenges as more critical to growth(see Figure 3).Organizations between$1-$10 billion have a higher focus on technology innov

29、ation as a driver but also worry more about geopolitical concerns.When reporting the drivers that would have the least impact on growth,environmental and climate change issues and social issues were among the bottom three for organizations in both groups.“Our objective is to leverage technology in o

30、rder to benefit from increased operational efficiency,data insights,and improved decision-making during periods of high volatility.”CEO,energy&utilities Figure 2.Critical factors to company growthMultiple choice(2 choices/respondent)Source:Arthur D.LittleMultiple choice(2 choices/respondent)Source:A

31、rthur D.LittleFigure 2.Critical factors to company growth25%28%17%29%22%21%34%19%12%9%14%14%4%10%13%14%13%8%21%16%6%12%13%9%5%10%9%17%7%6%7%16%10%4%1%6%10%12%10%20%14%13%1%4%8%7%5%8%6%8%10%5%7%5%7%4%1%8%10%7%4%5%1%6%5%5%9%9%11%11%9%10%5%9%1%North America2%0%2%Asia2%0%3%Middle East3%3%0%0%2%0%Global

32、average0%2%1%Europe(Big 5)2%South America3%1%Europe(other)1%1%AfricaTechnology innovationRaw material pricesSupply chainEnvironmental&climate change issuesDisruptive competitionCyber risksEconomic growth/GDPSocial issuesInflationGlobalizationGeopolitical concernsEnergy prices50%What are the most cri

33、tical factors to your companys future growth?7Most important trends past vs.futureThe research also examined how the importance of particular trends has changed over time.We employed AI-based text analysis to understand free text answers comparing trends CEOs felt were important over the last three

34、to five years and which would be of primary importance for the future three to five years(see Figure 4).The results reveal a clear shift.For example,where e-commerce and digital transformation were the dominant trends listed by CEOs in the past,looking forward they are focusing on AI and automation

35、and sustainability,reducing the importance of e-commerce nearly by half.This reflects the impact of the pandemic and its immediate aftermath,which required every organization to embrace e-commerce and digitalization to operate effectively.Now that businesses are moving out of survival mode,CEOs are

36、putting the onus on AI and sustainability for growth.By region,the areas of focus for the future include ESG(Asia),AI and automation(North and South America,Europe),advanced technology(Africa),fintech(Middle East),and geopolitical challenges(Europe and South America).CEOs from different industries a

37、re also altering their focus moving forward.For example,automotive CEOs see ESG as having a dramatically increased focus for the future that has outpaced AI,unlike their peers in the wider manufacturing sector.Leaders in the energy and utilities sector are also concentrating on ESG,given their centr

38、al role in decarbonizing their own operations and those of wider ecosystems.Travel and transportation CEOs have shifted from e-commerce to see digital transformation as the most relevant driver for their industry.Telco CEOs are also focused on digital transformation and AI,moving away from workforce

39、 transformation.Healthcare CEOs have shifted their focus from e-commerce to advanced technology.For their part,financial services leaders worry about geopolitical challenges,alongside the threat(and opportunity)of fintech.When asked what specific technology areas they were focusing on over the next

40、three to five years,CEOs demonstrated a broad range of knowledge and understanding.In addition to AI,they cited advanced technologies like quantum computing,personalized learning platforms,cognitive smart cities,and,in the areas of transport,fully autonomous cars,hyperloop,drone and self-driving del

41、iveries,and urban air transport.Figure 3.Critical factors to company growth,by company sizeSource:Arthur D.LittleSource:Arthur D.LittleFigure 3.Critical factors to company growth,by company size$1-$10 bn$10+bnSupply chainRaw material pricesEnergy pricesDisruptive competitionEconomicgrowth/GDPGlobali

42、zationGeopolitical concernsInflationEnvironmental&climate change issuesSocial issuesCyber risks27%24%16%16%15%14%Technology innovation15%11%11%4%6%3%6%6%2%3%2%3%1%3%0%1%1%9%What are the two most critical global drivers to your companys future growth?8REPORT:POSITIVE IN AN UNCERTAIN WORLDARTHUR D.LIT

43、TLEEmbracing state intervention to drive growthThe combination of greater protectionism and increased programs and subsidies around decarbonization and other areas is providing new opportunities and changing CEO attitudes toward state intervention(see Figure 5).A third(33%)globally now see it as a u

44、seful driver for long-term growth(up from 21%in 2023),with a similar percentage(32%)viewing it as positive for short-term growth,down from 37%last year.Essentially,CEOs value this access to new investment resources and are factoring it into their overall growth strategies,particularly as they look t

45、o embrace new,more sustainable business practices and opportunities.“We are looking into potential government support initiatives or economic stimulus plans that could offer money during hard times economically.”CEO,telco Figure 4.Most important trends for CEOsOpen question answers clustered by AISo

46、urce:Arthur D.LittleOpen question answers clustered by AISource:Arthur D.LittleFigure 4.Most important trends for CEOs24%23%17%27%23%35%29%29%27%26%24%18%AI&automationSustainability&environmental responsibilityGlobalization&geopolitical challengesDigital transformation&Agile methodologiesRapid techn

47、ological advancements&adoptionE-commerce&personalization+5%+26%+59%-49%Past 3 yearsNext 3 yearsWhat do you see as the most impactful trends driving growth?Figure 5.Attitudes to government intervention in key industrial sectorsSource:Arthur D.LittleSource:Arthur D.LittleFigure 5.Attitudes to governme

48、nt intervention in key industrial sectorsDestabilizing factor skewing competitionNeutral effectsUseful support to short-term growthUseful support to long-term growthHow do you view renewed state intervention in key industrial sectors?33%31%16%45%32%38%16%34%32%41%45%16%28%14%11%55%27%17%34%32%24%19%

49、74%9%9%10%5%6%16%29%TotalEurope(Big 5)Europe(other)AsiaMiddle EastSouth AmericaAfrica2%North America9This shift is particularly pronounced in North America and among larger organizations.A clear majority of North American CEOs(55%)see it as a useful support for long-term growth(up 20%from 2023),with

50、 34%viewing it as a short-term growth driver.Just 2%see it as a destabilizing factor that skews competition,compared to 29%of South American CEOs.Of larger ($10 billion+)companies,41%view state intervention as a useful support to long-term growth,with 33%believing it drove short-term growth.TREND 2:

51、CURRENT GROWTH STRATEGIES:NAVIGATING UNCERTAINTY WITH CAUTIONA cautious approach to growth strategiesDriven by current market uncertainty,CEOs plan to continue their existing growth strategies,with overall marginal differences between those used for the past three years and the next three years(see

52、Figure 6).The only areas that see a greater focus are diversification(up 14%compared to 2023)and fighting price wars(up 13%),both of which look to be a reaction to economic conditions and more closely fought competition.Providing disruptive offerings(down 9%)and targeting new geographies(down 11%)ar

53、e being de-prioritized compared to 2023 as CEOs focus on maximizing existing strategies over the short to medium-term.The future focus on the core business is particularly strong among those companies that see themselves as market leaders,ahead of entering new geographies and cost optimization.For t

54、hose in the middle of the pack,the focus is shifting to new sales channels(up 18%)and new client segments,showing that they are searching for new opportunities to grow.Among respondents,38%of laggards are looking to diversify their revenues(doubling from 19%over the past three years),demonstrating a

55、 shift away from a core business focus in order to unlock growth.“Through entering new markets,creating fresh goods and services,and forming clever alliances,we are broadening the scope of our business activities.”CEO,financial servicesFigure 6.Most important growth strategies,leaders vs.laggardsNot

56、e:Performance category based on own perception vs.peers;multiple choice(3 choices/respondent)Source:Arthur D.LittleNote:Performance category based on own perception vs.peers;multiple choice(3 choices/respondent)Source:Arthur D.LittleFigure 6.Most important growth strategies,leaders vs.laggards36%34%

57、31%13%27%47%36%22%26%35%13%8%10%Core business focusNew client segmentsCost optimizationNew sales channelsDisruptive offeringDiversificationNew geographiesChange in regulationM&A for bus.portfolio opt.M&A for consolidationPrice warM&A for vertical int.44%33%34%21%18%27%33%22%5%20%6%Past 3 yearsNext 3

58、 yearsTop quartile(n=98)Middle of the pack(n=158)Lagging(n=26)38%20%39%42%26%13%29%32%34%37%25%9%11%30%28%32%19%17%35%34%8%7%25%8%42%35%42%27%23%12%8%31%38%38%35%12%19%31%27%31%38%12%19%31%19%4%23%4%What are your most important growth strategies(by performance category)?1 0REPORT:POSITIVE IN AN UNCE

59、RTAIN WORLDARTHUR D.LITTLEIncreasing investments in growthThe turmoil of the past 12 months has led some CEOs to recalibrate their growth ambitions(see Figure 7).While a similar percentage(33%versus 30%in 2023)are adopting offensive strategies to achieve faster-than-market growth,the number focusing

60、 on cautious strategies(achieve market growth)dropped by 7%as more embraced defensive strategies(aiming for slower-than-market growth).This increase in defensive strategies could also indicate a belief that AI can reduce barriers to entry and bring disruption and new players into existing markets.La

61、rger companies are more likely to be pushing for above-average growth,with 45%adopting offensive strategies compared to 26%of smaller organizations.What is striking is that across all three groups,CEOs are willing to increase their investments in growth,perhaps pointing to greater funds being requir

62、ed than initially thought necessary to achieve success.For example,92%of defensive CEOs expect to increase or keep their growth investment constant.“We recognize the importance of building strong partnerships and collaborations.In times of uncertainty,having a network of reliable partners can provid

63、e additional support and resources.”CEO,healthcareOrganic growth outpaces M&A,particularly around consolidationCEOs increasingly understand that while acquisitions can drive growth,they need to be focused and targeted.Overall,two-thirds(68%)of M&A activities met expectations,the same figure as organ

64、ic growth programs,and up from 2023(see Figure 8).Yet when it comes to exceeding expectations,organic growth is the clear winner:26%of CEOs reported that such programs delivered above-expected benefits,with only 6%disappointed with their organic growth strategies.In contrast,more than a fifth(21%)of

65、 CEOs said M&A performed below expectations,particularly around consolidation.Here just 11%of CEOs felt deals had exceeded their expectations,with 44%of CEOs saying they failed to deliver on their potential.This demonstrates the importance of picking the right targets for the right reasons,even at a

66、 time of market volatility when more companies may be available at what appears to be the right price.Large-scale consolidation brings key challenges around integrating the acquired business,its people,and product portfolios.At the same time,regulators around the world are increasingly active in rev

67、iewing such acquisitions,often demanding large-scale changes to deals that can ultimately reduce or even eliminate the value they bring.Figure 7.Growth ambitions and change in investment levelsSource:Arthur D.LittleSource:Arthur D.LittleFigure 7.Growth ambitions and change in investment levelsKey in

68、sightsRegardless of the growth ambition,CEOs hardly(Cautions 5%,Defensive 14%)plan to decrease their growth investment relative to the past 3 years1As anticipated CEOs with a set ambition to growth above market growth,are also planning to increase their growth investment while the lower the growth a

69、mbitions the higher the share of stable growth investments286%10%4%Offensive(faster than market growth)70%23%6%Cautious(meet market growth)38%54%8%Defensive(slower thanmarket growth)33%53%14%IncreaseDecreaseStay constantWhat are your plans for investment growth relative to the last 3 years?1 1Figure

70、 8.Success rates of organic vs.M&A activitiesSource:Arthur D.LittleSource:Arthur D.LittleFigure 8.Success rates of organic vs.M&A activities26%68%6%11%68%21%Exceeds expectationsMeets expectationsBelow expectationsOrganic growthM&A growth14%44%10%69%44%85%17%11%5%M&A for bus.portfolio opt.M&A forcons

71、olidationM&A forverticalintegrationExceeds expectationsMeets expectationsBelow expectationsPast growth focus vs.success rate M&AHow satisfied are you with the results of your organic and M&A activities to drive growth?Understanding needs in a VUCA worldIncreasing growth investments is part of a wide

72、r realization among CEOs that we now live in a world characterized by VUCA.Of CEOs,80%expect to pay more management attention to VUCA and related topics over the next three to five years,with just 2%believing it will be less important than today.“Flexibility is one of the most crucial traits a busin

73、ess can have in a volatile industry.Being able to quickly alter course when required can mean the difference between success and failure.”CEO,financial servicesRecognizing VUCA is one thing but adapting the organization to meet its requirements for agility,resilience,and efficiency is more difficult

74、.When asked how they aim to cope with volatility,the most common answers involve greater customer focus,closer links with suppliers,increasing sophisticated risk management,business intelligence,and scenario planning,as well as creating more innovative,flexible organizations that empower their peopl

75、e.As a result of these approaches,half(50%)of CEOs feel that their company has a high level of readiness to adapt to VUCA,and 16%feel their structures are superior to the wider market(see Figure 9).WE NOW LIVE IN A WORLD CHARACTERIZED BY VUCA“The real-time data we are integrating into models that fo

76、recast from supply chain disruptions,consumer behavior,and market trends can enable a more adaptable and fluid approach.”CEO,manufacturingThis shift in adaptation is led by larger organizations,where 28%judge their capabilities as superior.However,68%of this group feel that they still have a strong/

77、very strong need to reskill staff to adapt to a more volatile environment,compared to 52%of the$1-$10 billion group.On average,92%of CEOs feel that some reskilling is required for success in the VUCA world.1 2REPORT:POSITIVE IN AN UNCERTAIN WORLDARTHUR D.LITTLESource:Arthur D.LittleFigure 10.The imp

78、ortance of ambidexterity to CEO success75%67%80%70%69%79%81%21%28%18%23%25%16%16%5%5%6%5%0%4%Total0%Telcos0%2%Energy&utilities2%Manufacturing(including automotive)0%Travel&transportation0%Healthcare0%3%Financial servicesNot important at allNot really importantSomewhat importantVery importantHow impo

79、rtant will ambidexterity be for a CEO to succeed over the coming 3-5 years?A key to success in a VUCA world is balancing productivity and innovation,creating ambidextrous organizations that succeed in both dimensions of creativity and scale(see Figure 10).CEOs understand this,with 96%believing ambid

80、exterity will be important to their success over the coming three to five years.Among different sectors,more than three-quarters of CEOs in financial services,energy and utilities,and healthcare reported becoming ambidextrous as very important,ahead of manufacturing and travel and transportation,whe

81、re CEOs feel it will be less of a focus over the medium term.“We are in a better position to adjust to changes in the market because we consistently invest in R&D and promote an innovative culture.”CEO,travel&transportationFigure 9.Structural readiness for VUCA,by company sizeSource:Arthur D.LittleS

82、ource:Arthur D.LittleFigure 9.Structural readiness for VUCA,by company size16%10%28%50%52%42%33%37%25%0%2%Total0%1%$1 billion to$10 billion1%3%More than$10 billionVery low/not adequateLow/limitedGood enoughHigh/strongVery high/superiorWhat level of readiness do you see in your organization for it to

83、 rapidlyadapt to market VUCA?Figure 10.The importance of ambidexterity to CEO successSource:Arthur D.Little1 3TREND 3:PREPARING FOR THE FUTURE:AI LEADS TO RESKILLING PARADIGM SHIFTOrganizational structures thrive in testing timesIn 2023,half of CEOs expressed confidence that their existing organizat

84、ional structures were strong enough to navigate business priorities and market volatility,although just 4%classed them as superior.“To remain competitive in the industry,we will devote more attention to realizing the wants and demands of our customers.Developing a solid rapport with customers might

85、help us through difficult times in the economy.”CEO,travel&transportationThe testing conditions of the last 12 months demonstrated that CEOs were underselling the benefits of the structures they had put in place;while half still feel their organizations are strong,16%now see them as superior and non

86、e sees them as inadequate(see Figure 11).This improved confidence is visible across all sectors particularly energy and utilities(with 32%of CEOs feeling structures are superior,compared to 3%in 2023),telcos(from 0%superior to 13%),and financial services(up again,from 0%to 10%).Overall,CEOs are conf

87、ident that they have strong organizational structures in place to move forward and target their growth goals.Embrace AI to achieve growth ambitionsSince 2023,AI usage has accelerated dramatically.To measure CEO attitudes,this years study introduced new questions around AI and its adoption.In many wa

88、ys,progress has been swift 96%of executives claim to have implemented an AI strategy within at least one department of their organization,with 47%having a strategic view toward AI.However,just 13%have adopted a comprehensive company-wide AI strategy,demonstrating that they are still on a transformat

89、ion path to fully understand the impact of AI and integrate it across the organization.In our experience,fully benefiting from AI requires enormous structural and workforce change,which is achievable only with time.There are major challenges to moving from a strategic view to a strategy and then imp

90、lementing it.Figure 11.Satisfaction with current organizational structureSource:Arthur D.LittleSource:Arthur D.LittleFigure 11.Satisfaction with current organizational structure0%3%2%3%2%3%3%33%28%24%28%44%42%34%50%56%42%58%34%44%55%16%13%32%10%16%14%10%TotalTelcosEnergy&utilitiesManufacturing(inclu

91、ding automotive)Travel&transportationHealthcareFinancial services0%0%0%0%0%0%0%Not adequateLimitedGood enoughStrongSuperiorHow adequate is your current organization to face your business priorities and market volatility?1 4REPORT:POSITIVE IN AN UNCERTAIN WORLDARTHUR D.LITTLEFigure 12 illustrates the

92、 strongest performers by region,with 75%of companies within Asia reporting a company-wide strategy or strategic view.The strongest performers by industry and size are those in the financial services(79%)and$10 billion+organizations(67%).A clear divide also exists between organizations that feel that

93、 they are leading their markets,where 24%have a company-wide strategy in place,and laggards,none of which have implemented such a compelling strategy.AI usage:Efficiency&innovationHow are CEOs turning their AI strategies into practice?Analysis shows that they are predominantly focused on making core

94、 functions better by increasing efficiency and effectiveness,such as through automation(see Figure 13).Efficiency is the leading use case in four out of seven sectors,showing that companies are at a relatively early stage of their AI journey.Source:Arthur D.LittleFigure 11.Satisfaction with current

95、organizational structure0%3%2%3%2%3%3%33%28%24%28%44%42%34%50%56%42%58%34%44%55%16%13%32%10%16%14%10%TotalTelcosEnergy&utilitiesManufacturing(including automotive)Travel&transportationHealthcareFinancial services0%0%0%0%0%0%0%Not adequateLimitedGood enoughStrongSuperiorHow adequate is your current o

96、rganization to face your business priorities and market volatility?Figure 12.Company AI strategiesSource:Arthur D.LittleFigure 13.Average degree of AI use for different performance vectors per industry(0-100)Note:For this question,automotive was split from the overall manufacturing sector,as it prov

97、ided radically different results in terms of AI usageSource:Arthur D.LittleSource:Arthur D.LittleFigure 12.Company AI strategiesNot implementedSingle department/OpCoWe have a compelling company-wide AI strategy Several departments/OpCosWe have a strategic viewTo what extent does your company have a

98、holistic AI strategy across all departments?47%48%63%54%24%37%32%32%27%24%31%43%47%39%13%16%12%13%10%11%7%5%7%5%14%19%5%9%4%Total1%Europe0%0%Asia2%0%Middle EastSouth America0%AfricaNorth AmericaNote:For this question,automotive was split from the overall manufacturing sector,as it provided radically

99、 different results in terms of AI usageSource:Arthur D.LittleFigure 13.Average degree of AI use for different performance vectors per industry(0-100)13DistributionTelcosEnergy&utilitiesManufacturing Travel&transportationHealthcareFinancial servicesAutomotiveIncrease efficiency for core functions Inc

100、rease effectiveness for core functionsImprove non-core functionsCreate new business models5855476350=x 60 501 5The exceptions are telcos,travel and transportation,and manufacturing,which are focusing on using AI to create new business models.However,manufacturing is clearly lagging other sectors on

101、each performance vector,scoring an overall average of less than 50 for AI use.This can be linked to the sectors pressing need to reskill employees,as we highlight in the next section.“Our target is to use technology to improve operational effectiveness while cutting expenses.”CEO,healthcare“To predi

102、ct market movements,we are using AI and machine learning,which we are using more and more for scenario analysis and predictive modeling.”CEO,telcoReskill for AI-driven future While AI is not yet changing corporate structures,it is having an immediate and enormous impact on the skills required for su

103、ccess.To maximize results from AI,CEOs believe they need to transform their workforces,with 59%seeing a strong or very strong requirement to reskill their employees,up from just 13%in 2023(see Figure 14).This demonstrates the speed and wide-ranging impact of AIs rapid rise.For example,68%of manufact

104、uring CEOs see a strong need to reskill in 2024 compared to 5%in 2023,attesting to the sectors lack of AI maturity.Across sectors,less than 1%report no need for reskilling,a fall from 11%in 2023.“We encourage creativity and a willingness to explore novel concepts.A firm with an entrepreneurial atmos

105、phere might be able to develop business strategies that give it an edge over competitors in volatile markets.”CEO,automotive Figure 14.The need for reskilling among current employeesSource:Arthur D.LittleSource:Arthur D.LittleFigure 14.The need for reskilling among current employees1%3%2%7%10%7%7%8%

106、6%3%34%33%42%38%24%31%33%51%46%42%50%58%44%59%8%8%9%5%10%19%3%TotalTelcosEnergy&utilitiesManufacturing(including automotive)Travel&transportationHealthcareFinancial services0%0%0%0%No needLimitedModerateStrongVery strongTo what extent do you need to reskill your employees?1 6REPORT:POSITIVE IN AN UN

107、CERTAIN WORLDARTHUR D.LITTLELook internally&externally to develop talentIn 2023,CEOs reported relying on external sources,primarily headhunters and cooperation with universities,to provide them with new capabilities and talent to drive growth.In 2024,the focus has shifted,with the largest percentage

108、(30%)looking to internal academies to deliver talent and skills,up from 21%in 2023(see Figure 15).This trend is potentially driven by multiple factors,including the difficulty of finding AI talent due to global skills shortages and a realization that technical knowledge needs to be married to busine

109、ss understanding to deliver effective results,tailored to the individual company and its objectives.“In order to identify fresh opportunities for development and build strong business models,we are encouraging creative thinking and entrepreneurial behavior within our company.”CEO,energy&utilitiesTRE

110、ND 4:A SHIFT IN PRIORITIES AROUND ESG ESG becomes one of many business prioritiesHow CEOs approach and prioritize ESG initiatives is undergoing a notable shift as sustainability develops(see Figure 16).Whereas in our 2023 study,41%gave it a higher priority than other activities,in 2024 this has dimi

111、nished to just 24%.Essentially,most CEOs consider ESG as part of“business as usual,”with their approaches maturing over the course of the last 12 months.Clearly,CEOs still see ESG as important,but 71%now rank it on a par with other priorities,up from 58%in 2023.“As the emphasis on renewable energy s

112、ources and ecologically friendly operations grows,we are making long-term investments in and adoption of sustainable practices.”CEO,energy&utilitiesFigure 15.Where CEOs plan to source new talent and capabilitiesSource:Arthur D.LittleSource:Arthur D.LittleFigure 15.Where CEOs plan to source new talen

113、t and capabilitiesCooperation with universities and academiaInternal academyCorporate venture capitalAcquisitionsHeadhuntersWhat are your plans to source new capabilities&talent needed for growth?30%32%27%32%32%33%27%21%14%28%23%18%22%19%20%20%25%25%29%17%11%14%22%10%10%11%18%17%14%12%10%10%10%10%27

114、%TotalTelecomEnergy&utilitiesManufacturing(including automotive)Travel&transportationHealthcareFinancial services1 7This shift is particularly noticeable in manufacturing,where 35%fewer CEOs see it as a higher priority than in 2023,and travel and transportation,where it has declined by 25%.In fact,9

115、%of travel and transportation CEOs report that ESG is now less important than other priorities,pointing to either increased maturity(which means it has become an integral part of business operations)or that other more pressing factors have overtaken it in terms of focus.By organizational size,while

116、the overall trend is toward reduced prioritization of ESG,larger organizations are still more likely to focus on it above other activities,with a third(33%)seeing it as more important than other initiatives,compared to 22%of those with revenues between$1-$10 billion.A divided picture on ESG approach

117、esCompared to 2023,the gap between perspectives of CEOs on ESG seems to have widened.Demonstrating its importance to the overall business,Figure 17 shows that 77%of executives have a clear holistic approach that embeds ESG across their organization(up from 24%).Essentially,they are looking at ESG in

118、 every activity and department,led from the top,working together to monitor progress and meet sustainability goals.“Our commitment to corporate social responsibility CSR is not just a checkbox;its our moral compass.”CEO,travel&transportationHowever,the remaining 23%characterize their approach as cre

119、ating islands of ESG focus(up from 2%in 2023).Not taking a holistic view may mean that they are concentrating resources and time where it is required most,such as in decarbonizing specific activities or processes,taking a pragmatic approach based on their specific circumstances.Figure 16.Priority gi

120、ven to ESG compared to other corporate initiativesSource:Arthur D.LittleSource:Arthur D.LittleFigure 16.Priority given to ESG compared to other corporate initiativesLower priorityHigher prioritySame priorityWhat priority does your company give ESG compared to other company initiatives?71%64%70%68%69

121、%72%79%24%28%28%27%22%23%16%5%8%5%9%5%5%TotalTelecom2%Energy&utilitiesManufacturing(inclusive automotive)Travel&transportationHealthcareFinancial servicesFigure 17.The role of ESG initiatives in companiesSource:Arthur D.LittleSource:Arthur D.LittleFigure 17.The role of ESG initiatives in companies77

122、%23%0%Embedding ESG holistically(”everywhere,everything”)Strategic ESG focusIslands of ESG focusWhat character do your ESG initiativeshave in your company?1 8REPORT:POSITIVE IN AN UNCERTAIN WORLDARTHUR D.LITTLESeeing ESG as a differentiator for long-term successLarge organizations in many regions fa

123、ce regulatory requirements to become more sustainable and to demonstrate transparency and good governance.However,CEOs see the benefits of embracing ESG for multiple reasons,from attracting and retaining customers,staff,and investors to more altruistic desires to protect the planet and leave a posit

124、ive legacy.“Our attention is directed toward ESG aspects,which have the potential to draw in a larger pool of investors and foster closer ties with customers who value social responsibility.”CEO,telco“It is important to set a good example around CSR initiatives by making meaningful contributions to

125、the communities where the business is located.”CEO,financial servicesCEOs are creating and spreading a sense of purpose and ethical standards across their business,helping to increase financial and reputational strengths.In many cases,focusing on ESG provides a way to cope with volatility,providing

126、a“North Star”for the business to follow.“The most important thing in a company is its purpose.We want to manufacture the best products while respecting the environment and all other manufacturers.Employees,especially younger ones,are important to us and the future of our company.”CEO,manufacturing“W

127、e adopt sustainability practices to appeal to environmentally conscious consumers and manage continuous market volatility.”CEO,healthcare1 9While our study demonstrates global trends,there are also considerable variations among the attitudes and actions of CEOs across different geographic regions,co

128、mpany sizes,and sectors.We have covered regional and size variations in the main analysis;in this chapter,we drill down into the notable differences among sectors.As in 2023,each industry has its own pressing challenges and opportunities that CEOs need to understand and act on.Often these are driven

129、 by digitalization and convergence particularly for traditional industries and achieving decarbonization in the case of energy suppliers and manufacturing companies:-Telcos.Telcos face huge pressure on company valuations and stock performance due to increasing costs and the fact that network access

130、is becoming a commodity,particularly as tech/media giants enter the market.This is leading to increased fragmentation(e.g.,splitting off infrastructure)and a need for both greater efficiency and hyper-personalization for customers,both of which AI enables.“In order to streamline processes,boost prod

131、uctivity,and cut expenses,we are embracing automation technologies like AI and machine learning.”CEO,telco-Energy&utilities.Energy and utility players must successfully decarbonize and move away from fossil fuels while incorporating changing energy consumption/production patterns,all against a backd

132、rop of market disruption due to geopolitical events.Business models must adapt,while grids must become more agile and resilient to cope with increased demand.AI helps increase network reliability and optimize performance in a fast-changing environment.“We will incorporate more sustainable practices

133、since they support long-term resilience in addition to being in line with larger societal trends.”CEO,energy&utilities-Manufacturing.Manufacturers,particularly in the automotive sector,must master the green transformation,electrifying their operations and creating more circular,sustainable economies

134、 all while digitizing and building stronger direct relationships with customers.AI is at the heart of more digital,autonomous systems,whether it is factory/supply chain digital twins or self-driving cars.“We intend to increase our investments in customer relationship management,solicit feedback,and

135、modify our products and services in response to evolving consumer demands.”CEO,manufacturing-Travel&transportation.The travel and transportation industry was severely impacted by COVID-19 lockdowns,and in many areas demand patterns have changed dramatically.Success requires a focus on more personali

136、zed,electrified,and end-to-end mobility solutions,with AI used to optimize transport networks,predict demand,and deliver a more personalized,sustainable experience to customers.“In order to spot new dangers and possibilities,we keep a close eye on geopolitical developments and market trends.A proact

137、ive strategy enables prompt strategy modifications for businesses.”CEO,travel&transportation2.HOW SEC TORS COMPARE2 0REPORT:POSITIVE IN AN UNCERTAIN WORLD20ARTHUR D.LITTLE-Healthcare.Increasing global demand is being matched by advances in medical science and drug discovery,accelerating innovation a

138、nd dramatically reducing time to market.However,development and regulatory costs remain high,requiring greater digitalization and increased use of AI to streamline and accelerate the end-to-end discovery,development,and delivery process.“We will make an effort to establish strategic alliances with o

139、ther businesses that will benefit both parties and enable more efficient problem solving.”CEO,healthcare-Financial services.The combination of new niche players,convergence,and the rise of tech companies in financial services means that banks must rethink their business models to survive.That requir

140、es a greater focus on innovation,ESG,adding value,and increasing efficiency.AI will redefine how financial services operate,optimizing processes,enabling hyper-personalization,and improving pricing and risk management.“We are embracing ESG considerations in our sustainable banking practices.The bank

141、s standing and ability to withstand market fluctuations can both be improved by its commitment to sustainability.”CEO,financial servicesNEARLY HALF OF ALL CEOs EXPECT CONVERGENCE TO ACCELERATE OVER THE NEXT THREE TO FIVE YEARSFigure 18 shows that nearly half of all CEOs expect convergence to acceler

142、ate over the next three to five years,and just 4%expect it to slow down.CEOs in industries that have already been subject to extensive convergence(e.g.,telcos,financial services,healthcare,and travel and transportation)believe it is more likely to remain at its current pace.By contrast,energy and ut

143、ilities and manufacturing expect convergence to increase over the same period.These differences between sectors are particularly highlighted in three areas:(1)growth expectations,(2)challenges to growth,and(3)meeting changing talent needs.Figure 18.Industry convergenceSource:Arthur D.LittleSource:Ar

144、thur D.LittleFigure 18.Industry convergence49%41%56%58%47%40%47%47%51%42%38%50%58%48%8%5%4%TotalTelcos2%Energy&utilities3%Manufacturing(including automotive)3%Travel&transportation2%HealthcareFinancial servicesSlow downRemain at current paceAccelerateHow do you expect industry convergence in your se

145、ctor to develop in the next 3-5 years?2 1GROWTH EXPECTATIONSCEOs from every sector share optimism for the future,believing that the global economic outlook will evolve positively over the next three to five years(see Figure 19).For example,77%of healthcare CEOs predict that the economy will grow,wit

146、h a further 21%believing it will remain stable.Telco CEOs are equally positive.In contrast,sectors such as manufacturing(where 10%of CEOs see a worsening outlook),travel and transportation,and financial services are more cautious.This aligns with individual sector factors.For example,manufacturers a

147、re grappling with rising raw material/energy prices and the need to decarbonize,both of which increase costs and complexity.However,it is important to note that the majority of CEOs in every sector expect a positive future a major change from the year prior.“We are utilizing real-time data on market

148、 trends,resource availability,and consumer preferences to adjust our product offerings in response to changing demands and to help us make informed production decisions.”CEO,manufacturing“We are practicing scenario planning in order to be ready for a range of possible future events.This assists us i

149、n determining important factors and formulating plans of action for various circumstances.”CEO,telcoCHALLENGES TO GROWTHThe study also examined the specific challenges that CEOs in different sectors face and how these have changed over the last 12 months(see Figure 20).While overall the obstacles re

150、main constant,there are significant sectoral differences.For example,market volatility has increased in manufacturing(again,likely driven by rising raw material costs),while competitive pressures from start-ups have decreased.CEOs in every other sector are much more concerned about competition from

151、nimble start-ups,especially in telcos,where 33%of leaders named it as their biggest obstacle(doubling from 2023),and travel and transportation(28%).This demonstrates the potential lowering of barriers to entry in these industries thanks to digital disruption,while manufacturing still requires heavy

152、investment to establish and grow operations.“We are expanding into multiple markets,and diversifying our offerings of goods and services can help us become less dependent on any one source of income or area.”CEO,travel&transportation“We are focusing more on ESG factors because they can help us posit

153、ion ourselves more favorably for long-term success.”CEO,healthcareFigure 19.CEO views on global economic outlookSource:Arthur D.LittleSource:Arthur D.LittleFigure 19.CEO views on global economic outlook66%77%74%60%56%77%53%29%21%22%30%41%21%41%5%4%10%5%Total3%TelcosEnergy&utilitiesManufacturing(incl

154、uding automotive)3%Travel&transportationHealthcareFinancialservices2%DecreaseStableIncreaseHow do you expect the global economic outlook to evolve in the next 3-5 years?2 2REPORT:POSITIVE IN AN UNCERTAIN WORLDARTHUR D.LITTLEMEETING CHANGING TALENT NEEDSAs described earlier,all CEOs understand the ne

155、ed to reskill their workforces to embrace opportunities such as AI.However,how and where they source talent varies considerably(refer back to Figure 15).CEOs in the telco,manufacturing,travel and transportation,and healthcare sectors are looking within the business for skills and are most enthusiast

156、ic about internal academies.Healthcare organizations are also increasing their focus on building talents through acquisition at the expense of traditional cooperation with universities and academia,perhaps pointing to the growth in the start-up ecosystem in this area.Energy and utilities CEOs also a

157、im to source new talents via acquisition,while financial services CEOs look to corporate venture capital,investing in fintechs to plug their skills gaps.Travel and transportation is the only sector to increase(slightly)its reliance on headhunters,although they are seen as an integral part of the rec

158、ruitment mix in most sectors,albeit with a noticeable drop in the financial services sector compared to 2023.ALL CEOs UNDERSTAND THE NEED TO RESKILL THEIR WORKFORCES TO EMBRACE OPPORTUNITIES SUCH AS AI“We support originality and an openness to trying new things.A corporation with an innovative cultu

159、re may find ways to create business models that offer it a competitive advantage in erratic marketplaces.”CEO,financial services“Its critical to have the flexibility to quickly adjust to changing conditions.This entails establishing an innovative culture,rewarding employee adaptability,and putting p

160、rocedures in place that facilitate quick decision-making.”CEO,energy&utilitiesFigure 20.Obstacles to growthSource:Arthur D.LittleSource:Arthur D.LittleFigure 20.Obstacles to growthComplexity in data interpretation&augmented decision-making processTalent hiring/retention or reskillingCompetitive pres

161、sure from start-up reduced scale-up timeBlurry business boundariesHigh market volatility&long time-to-market for large corporationsAmong the following,which is the biggest obstacle that your company might face?28%23%34%37%28%23%19%21%18%28%22%22%19%16%20%33%16%13%28%23%12%18%15%10%22%13%26%19%15%10%

162、12%7%9%9%34%TotalTelcosEnergy&utilitiesManufacturing(including automotive)Travel&transportationHealthcareFinancial services2 3CEOs THEMSELVES UNDERSTAND THAT SUCCESS IS NOT A GIVENADLs 2024“CEO Insights”study highlights a positive and heartening vision of the future.Optimistic and confident global C

163、EOs are focused on growth and believe they are well-equipped to operate effectively in a VUCA world,thanks to a combination of strong structures,clear strategies,and a workforce reskilled to make the most of AI.However,CEOs themselves understand that success is not a given for them or their companie

164、s.Analyzing the research and augmenting it with the many conversations we have had with CEOs,we have defined seven key areas of focus that will help companies to achieve their growth objectives:1.UNDERSTAND THAT VOLATILITY IS HERE TO STAYThe turmoil caused by the pandemic was not a one-off event.We

165、now live in an interconnected,integrated,and always-on world characterized by constant uncertainty from geopolitics to climate change.VUCA does not mean the end of strategy,but it does mean that monolithic,long-term strategies must be replaced by more nimble,short-term ones.Successful CEOs understan

166、d that this volatility brings opportunity and are focused on creating agile organizations that can respond quickly to change,however it impacts their operations.They need to keep their hands on the corporate steering wheel,driving organizations forward rather than switching to autopilot.2.BUILD AMBI

167、DEXTERITY INTO THE ORGANIZATIONThe companies that will win in the VUCA world are built on strong foundations that enable them to combine scale and productivity with creativity and innovation.These ambidextrous organizations are both efficient and ground-breaking,allowing them both to seize new oppor

168、tunities and to maximize existing ones.3.CONCENTRATE ON PEOPLE,SKILLS&CAPABILITIESInvesting in technology alone is not enough to deliver growth.CEOs must ensure that they have the right internal skills and capabilities to deliver an ambidextrous,agile organization.This relies on a fundamental reskil

169、ling of the workforce to ensure that they have the correct talent mix to drive the business forward.CEOs are therefore focusing heavily on ensuring they have access to these skills,sourced from multiple areas.4.EXTEND AI BEYOND EFFICIENCYCEOs are rapidly adopting AI,not just in departments or pilots

170、,but across the wider business.However,the current focus is on AI for scale and productivity,essentially improving business as usual.The creativity and innovation side of ambidextrous organizations is therefore ripe for the positive impact of AI.CEOs must be bold and explore how AI can transform the

171、ir strategies across all dimensions to remain competitive in a changing world.CONCLUSION:CEO LESSONS FOR SUCCESS24REPORT:POSITIVE IN AN UNCERTAIN WORLDARTHUR D.LITTLE5.KEEP THE FOCUS ON ESGExtreme weather events and rising global temperatures served as a post-pandemic wake-up call to the entire worl

172、d.CEOs responded enthusiastically,increasing their focus on ESG priorities in 2023.Moving forward,the majority are taking a more holistic approach,incorporating it into their wider strategy and operations so that it infuses the entire organization.Those that are not,and are instead focusing on speci

173、fic areas,need to widen their reach to cover the entire business.Otherwise,they risk not only their own competitiveness but also imperil the wider environment.6.LOOK INTERNALLY&EXTERNALLY FOR SUCCESSWhen it comes to growth,CEOs are focusing on maximizing internal strategies around their core busines

174、s.They are more satisfied with the results of organic growth initiatives compared to acquisitions and are increasingly looking internally to reskill their existing people rather than looking to outside sources for capabilities and talent.However,CEOs must balance this approach with the fact that the

175、y operate in complex,interconnected ecosystems and supply chains.They therefore must work openly with others,particularly to achieve ESG goals,meet sustainability targets,and unlock innovation.7.BE WARY OF ACQUISITIONSTurmoil brings new opportunities around M&A,both in terms of distressed competitor

176、s and cash-strapped start-ups that can provide technology,innovation,and talent.However,CEOs know that despite their alluring promise,many acquisitions disappoint,proving to be a drain on management resources rather than adding value.Careful due diligence is required to ensure that supposed bargains

177、 deliver on growth strategies rather than becoming expensive distractions.About ADLs 2024 CEO Insights study -Following a consistent methodology,the global survey interviewed 282 CEOs from companies with turnover of more than$1 billion.-Of respondents,61%led businesses with a turnover between$1-$10

178、billion,with 39%having annual revenues of over$10 billion.-CEOs were equally distributed among organizations in six key industries(telcos,energy&utilities,manufacturing including automotive,travel&transportation,healthcare,and financial services).-To give a representative,truly global view,CEOs were

179、 based in Europe,Asia,the Middle East,Africa,and South and North America.2 5NOTES2 6REPORT:POSITIVE IN AN UNCERTAIN WORLDARTHUR D.LITTLE2 7Arthur D.Little has been at the forefront of innovation since 1886.We are an acknowledged thought leader in linking strategy,innovation and transformation in tec

180、hnology-intensive and converging industries.We navigate our clients through changing business ecosystems to uncover new growth opportunities.We enable our clients to build innovation capabilities and transform their organizations.Our consultants have strong practical industry experience combined wit

181、h excellent knowledge of key trends and dynamics.ADL is present in the most important business centers around the world.We are proud to serve most of the Fortune 1000 companies,in addition to other leading firms and public sector organizations.For further information,please visit .Copyright Arthur D.Little 2024.All rights reserved.