Disruption has become the norm in business over the last few years, and leaders are getting better at managing it after more than three years of volatility caused by the pandemic, supply chain instability, worker shortages, and inflation. But newly emerging factors outside of executives’ control are setting the agenda in the new year—putting CEOs in the hot seat, with many fearing they will lose their jobs, according to new research from global consulting firm AlixPartners.
The firm’s fifth annual Disruption Index, based on its survey of more than 3,000 CEOs and senior executives around the world, uncovers the latest global business concerns, not the least of which is an increasingly unpredictable election season in the US.
A new age of disruptions is poised to rise in 2024
While the pandemic era challenges of supply chain instability, worker shortages, and inflation are mostly in the rear-view mirror, business leaders continue to express uncertainty about the future and are increasingly worried about intensifying issues that are beyond their control. Geopolitical events, including the tragic wars in Ukraine and Gaza, the combustible 2024 US Presidential election, and ongoing friction with China, are causing them to adjust their strategy.
New technologies, in particular Generative AI, are their biggest disruptive opportunity over the next year, but at the same time a majority of CEOs say their company can’t keep up with the pace of technological change. Most business leaders feel pressure to take a stance on environmental issues from government and regulators, their investors and board, their customers, and their employees and team members. More than a third of business leaders say their company has been impacted by environmental concerns. Interest rate and the inflationary uncertainty continue to be a concern, and one-third still see the potential for recession on the horizon.
“CEOs largely navigated 2023’s bumpy road of disruptions successfully, but the way forward looks to be every bit as rugged and with more hidden curves, demanding even greater agility, acceleration, and speed. We are entering a new age of post-pandemic, longer term, and less controllable disruptive forces. Although our survey suggests that an increasing number of leaders are feeling more confident in their ability to manage disruption, there’s no room for complacency,” said Simon Freakley, CEO of AlixPartners, in a news release. “Those who succeed will be the ones who act quickly and decisively in the face of external challenges and at the same time execute brilliantly on the factors under their direct control. The winners will be those who can harness external challenge for internal benefit, in particular by unlocking the force multiplier effect afforded by AI.”
CEOs are still in the hot seat, but those who take the wheel will be in the driver’s seat in 2024
Anxiety remains prevalent among CEOs, with nearly 60 percent say they are worried about losing their job due to disruption. Nearly all CEOs anticipate needing to overhaul their business models in the next year due to disruptive forces, and about one in three CEOs identify AI as the most important digital issue to address in 2024—more so than any other technology. However, those leaders who say they’re leading their industry in growth and profit are much more likely to be driving disruption than reacting to it. They are much more likely to be investing more in technology and data. New technologies, in particular Generative AI, are the biggest disruptive opportunity over the next year identified by 68 percent of executives in the survey.
“Gen AI is both exciting and daunting for leaders and society at large,” said Freakley. “What is clear is that the prospects for business are significant and will result in massive productivity gains as well as brand new vectors for revenue growth, value creation, and reskilling at those organizations who best recognize and act upon the opportunity.”
In this new age of disruption, top areas of concern include:
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Geopolitical tensions
About two-thirds (66 percent) of CEOs say they worry about the impact of the 2024 US presidential election on their company, and 68 percent of CEOs report that US-China tensions are causing them to adjust their strategy.
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Tech innovation
New technologies, in particular Generative AI, are the biggest disruptive opportunity over the next year identified by 68 percent of executives, but at the same time 63 percent of CEOs say their company can’t keep up with the rate of technological change.
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Climate change and the transition to clean energy
Most business leaders feel pressure to take a stance on environmental issues from government and regulators (68 percent), their investors and board (64 percent), their customers (58 percent), and their employees and team members (57 percent). And 37 percent of business leaders say their company has been impacted by environmental concerns.
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Macroeconomic environment
Four in 19 (41 percent) of executives surveyed report instability in interest rates and the inflationary environment to be a threat, and one-third still see the potential for recession on the horizon.
What’s keeping CEOs up at night?
- Nearly 60 percent of CEOs surveyed worry about losing their job.
- Approximately 30 percent of CEOs say they are more anxious in their role than a year ago—and only 15 percent say they are less anxious.
- Almost two out of three CEOs report a high level of disruption for their company over the past year (65 percent).
- Nearly all CEOs (91 percent) anticipate needing to overhaul their business models in the next year due to disruptive forces.
- Nearly 80 percent of CEOs report feeling pressure to take a stance on environmental and social issues from employees, customers, and investors/boards, as well as from regulators.
- Nearly one in three CEOs identify AI as the most important digital issue to address in 2024—more so than any other technology.
But those in the driver’s seat are taking action
Just 8 percent of the companies surveyed say they lead their industry in growth and profit. Here’s what these business leaders say differentiates them from the rest:
- They are more disrupted overall and much more likely to drive disruption (74 percent) than react to it (20 percent).
- 63 percent expect their business models will change significantly in the next year, and 18 percent expect to see a total business model change in the next year (over 4x the average).
- They are much more likely to be investing more in technology and data: over half say they are fully exploiting the advantages data gives them in sales, customer experience, operations, and supply chain.
- 95 percent say their workforces fully understand and support their company’s digital tech objectives.
Large gaps remain in generative AI adoption
- Executives in our survey identified new technologies as the largest disruptive opportunity for their companies, specifically highlighting AI as the most important digital advancement to address in the next 12 months.
- 30 percent of business leaders say AI is the most important technology for their company to address in the next 12 months. However, additional survey findings found that they are not yet taking full advantage of this opportunity.
- While 59 percent of executives are currently investing in generative AI, only 28 percent report that it is fully embedded across their organizations and workflows.
- Many also note that they are still grappling with concerns around AI, including lack of human touch, ethical considerations, legal and regulatory compliance, and a lack of accuracy and reliability.
Download the full report here.
All data is sourced from the 2024 AlixPartners Disruption Index survey.
