Nicolas Marcoux is chief executive officer of PricewaterhouseCoopers Canada.
In a major shift from last year’s findings, this year PwC’s 26th Annual Global CEO Survey indicated that 73 per cent of CEOs globally and 76 per cent in Canada believe we’ll see declining growth during the year ahead.
What is especially surprising is that, according to our survey of 4,410 chief executive officers from 105 countries and territories, a significant number of both global CEOs (39 per cent) and Canadian respondents (to a lesser extent, at 25 per cent) think their company will no longer be economically viable a decade from now, if they do not transform.
What this tells us is twofold: Given pessimism is at a historic high, this could indeed mean that the market is about to bottom out. Therefore, there is no better time for action on the part of Canadian CEOs – to look beyond the current gloom and make the necessary transformations to secure their company’s long-term future.
The challenge is the natural tendency of business leaders to allocate the majority of their focus on navigating short-term obstacles, of which there are plenty in our current polycrisis environment: continued effects from COVID-19, geopolitical instability, rising interest rates, inflation, a challenging labour market, and supply chain issues. Our survey shows that CEOs are spending just roughly 20 per cent of their time on evolving their business and strategy to meet future demands.
What specifically do chief executives need to do? With a potential economic downturn looming, greater rigour around capital deployment will be key. It is not always thought of this way, but transformation begins by getting back to basics. Business leaders must define their organization’s purpose and the sustained outcomes they’re driving toward – and then seize strategic investment opportunities, including acquisitions, to support these goals.
This is about being aggressive in leveraging artificial intelligence, cloud and other disruptive technologies to meet evolving customer needs and fend off both traditional and non-traditional competitors.
Companies in the customer service space, for instance, must continue to push the digital transformation agenda to ensure they keep up with ever-evolving customer needs. The organizations that successfully leverage AI to create even better experiences – whether it’s seamless financial trading through an app or online shopping that allows for greater product interaction – will be the ones to successfully differentiate themselves. Technology also presents a huge opportunity across multiple industries for critical advancements in cybersecurity to ensure data privacy as cyberattacks become increasingly sophisticated.
The good news is that in our survey, 66 per cent of Canadian CEOs indicated they are planning meaningful investments in the above-mentioned technologies. Many say that investing in relevant talent is also a priority. But most of the CEOs I meet with are also concerned about having access to labour and skills that will help them make the most of their transformation plans.
Based on my own conversations with business leaders, it’s safe to say our country’s chief executives know they have some catching up to do on business transformation. Whereas in the past being a few years behind on this agenda wasn’t too egregious, in today’s highly competitive, globalized world, lagging by just a year or two equates to a lifetime in business terms – and results.
Transforming during a downturn takes a lot of courage – it’s certainly easier (and tempting) to put this off until economic conditions improve.
Ultimately, by leaning into a transformation agenda, Canadian companies have a true opportunity not just to survive an economic downturn, but also to reinvent themselves as more relevant and competitive organizations. Though the challenge is significant, let’s not forget that many Canadian businesses demonstrated an incredible ability to pivot these past few years. I, for one, am confident that we’re up to the task that lies ahead.