CEOs investing in future-proofing

CEO Survey shows urgency of transforming into a viable organisation

Many CEOs are raising prices and cutting operating costs to mitigate the effects of inflation and the cooling down of the economy. At the same time, however, PwC's 26th CEO Survey shows that a large proportion of the respondents are investing in future-proofing. That’s consistent with the urgency felt by many of them to transform their organisation into one that can remain viable.

CEOs making cuts while also investing

The CEO Survey shows that almost all CEOs are increasing prices (93 per cent) or reducing operating costs (87 per cent) in response to the deterioration in economic conditions. What is striking is that only a minority are making cuts in staff numbers or employment terms and conditions.

Labour market tightness high on agenda

The tight labour market remains high on executives’ agenda. They say that scarcity of employees is the main factor likely to impact their organisation's profitability during the course of the next 10 years, more so than technological developments or the energy transition.

This is apparent from their investment plans, with a very high proportion investing in labour-saving technology. CEOs were also asked whether they are making these investments to maintain the current situation or with a view to the future? Sixty per cent responded that investments were indeed related to future-proofing.

Circumstances require holistic view from CEOs

PwC expert Veronique Roos recognises the survey findings from day-to-day practice, while at the same time noting that many organisations have their hands full with the current day-to-day turbulence. "In actual practice, I see many companies also looking at how to reduce costs quickly in order to make long-term investment possible.”

Roos encourages CEOs to take a broad view across the entire organisation when reorganising. “We aren't facing a single crisis but a combination of economic problems, investment challenges and long-term trends. It is a situation which demands holistic action rather than simply going for organisational cutbacks. You need to reassess your entire portfolio across all the silos and see where most value is being created.”