It’s tough being a CEO, especially in today’s economic, political and social climate. With Brexit looming, the U.S. and China at loggerheads, changing consumer expectations and volatile market conditions, it’s little wonder that CEOs have a rather gloomy outlook of 2019.
Or at least, that’s what PwC’s 22nd CEO survey recently uncovered when it questioned almost 1400 CEOs across 90 territories. The responses given offered some interesting insights into the minds (and worries) of the modern-day CEO. Covering areas such as artificial intelligence (AI) and data, increasing skills gaps and organisational growth.
Getting intelligent on AI
The fact that AI makes the list should come as no surprise to any regular readers of business publications. There is still much hype around the technology, as well as fears about its impact. For CEOs, worries stem from an inability to prepare effectively for AI.
Many organisations are failing to translate a glut of data into better decision making. Indeed, many are faltering under the weight of their data, unable to govern or process it correctly. This proves a stumbling block in many CEOs’ plans for AI as it needs trustworthy and good quality data to begin working. Then there’s a shortage of skilled talent who can clean and analyse data (and develop AI).
In fact, the gap between the information that CEOs need to make well-informed, data-driven decisions, and what they get, hasn’t closed in the past decade.
A lack of skilled workers
The skills gap doesn’t just impact data departments, however. Nine in ten UK employers struggle to recruit the right talent, with many predicting that Brexit will only make the issue worse. Ironically, the same skills gap will also impact UK businesses’ ability to compete on a global playing field post-Brexit.
One solution lies in the growing gig economy, especially amongst white collar professions. Businesses that cannot afford or attract full-time talent may have to turn to the growing army of freelancers and contractors. It’s now possible to hire data scientists and Chief Data Officers on-demand, for instance.
Constantly shifting market conditions
Every day seems to bring a new development for the global economy and CEOs have to keep on top of it. Optimism about business growth remains high, with 82% of CEOs confident about their revenue prospects. But this number has fallen by 6% from 2018, with tougher market conditions giving confidence a battering.
It’s hard to ignore the Brexit in the room, of course, which won’t just impact UK businesses. Uncertainty over what’s happening has affected future-planning for many organisations. Some, such as EasyJet, Dyson and Panasonic have relocated their head offices from the UK. Plus, many business leaders across a range of industries have called on the UK Government for a clear plan and certainty over where the country is headed.
This includes the director general of the International Air Transport Association (IATA) Alexandre de Juniac. The airline industry has been particularly hit by the Brexit uncertainty, as flight schedules are planned almost a year ahead. As de Juniac points out, “...with two months left until Britain leaves the EU, airlines still do not know exactly what kind of Brexit they should be planning for."
Over the pond, the U.S.-Chinese trade war is affecting businesses operating across America and APAC. Casualties of the increased tensions have included the automotive, technology, consumer goods and agriculture sectors. High good prices (such as steel and aluminium) have pushed up costs for many businesses, whilst some companies like Apple risk being used as bargaining chips.
This is reflected in PwC’s survey, which highlighted a general theme of hunkering down and sticking to established borders. CEOs are more uncertain about investing in foreign markets and expressed concerns over trade conflicts, over-regulation and policy uncertainty.
Lack of control over regulation
Indeed, 80% of CEOs have some kind of concern about regulations. They have little control or influence over regulation and new legislation can directly impact the bottom-line. Whether that’s through increased costs, lost business or reallocating resources.
GDPR, for example, is estimated to have cost FTSE 350 companies [over $1 billion] (https://www.consultancy.uk/news/17226/gdpr-preparation-has-cost-ftse-350-businesses-around-11-billion) to prepare. A sum that is pocket change compared to the potential fines that firms face when infringing the Regulation.
Changing consumer expectations
If that wasn’t enough, CEOs have added pressure from changing public and shareholder expectations. People want their organisations (both as customers and employees) to take a stand on wider social issues, for example. There is added scrutiny on the ethical and sustainable practices of organisations and their leaders.
Purpose-driven organisations are finding themselves in the limelight. Gillette’s recent ‘toxic masculinity’ commercial is one such example of this, although it divided opinion. Therein lies a potential problem for purpose-driven CEOs. There is a lot of scope for leaders to champion causes that they feel passionate about, but it also opens them up to more criticism if their views are particularly polarising. There’s a thin line to tread between inspirational and incendiary.
A much bigger job than before
For those who take up the mantle of CEO, it’s a much harder job now than in decades before. Modern CEOs are much more than business figureheads. Their diverse concerns reflect the new job description of the CEO. They have to oversee their organisation’s financial and market performance, navigate political and legislative changes, experiment with emerging technology and become a social and sustainable champion. There is a lot to keep on top of… so it’s not surprising if some find themselves counting sheep at the end of the day.