CEOs are realizing that post-COVID changes are permanent—and there are more to come 

by | Aug 19, 2020 | Covid-19, Public Relations

It remains to be seen how much of the disruption caused by COVID-19 will revert (at least somewhat) back to the “old normal” and how much will become a permanent part of the new business world. New research from PwC shows a majority of CEOs believe pandemic-driven shifts towards remote collaboration (78 percent), automation (76 percent) and fewer people working from offices (61 percent), are here to stay. Overall, 61 percent say their business model will be more digital in the future—a change accelerated by the pandemic.

Responses show digital infrastructure, flexible working and employee well-being will top their boardroom agendas as they reconfigure business operations to secure growth in the next 12 months and beyond. Fifty-eight percent of CEOs say ensuring supply chain safety will remain a focus, driving technology investments to enable tracking of products from production to delivery, and to ensure their suppliers and partners are resilient during crises.

“Business leaders need to simultaneously keep their company running today and fundamentally rethink their strategy for tomorrow, so they come out of the pandemic ready to reconfigure their business to thrive in a very different world. And they need to do that, thinking not just about the COVID-19 acceleration of change in society and the rising expectations of their broader stakeholders, but also the other issues that are going to fundamentally reshape the future of business—from climate change to populism,” said Bob Moritz, global chairman at PricewaterhouseCoopers International Limited, in a news release.

Female employee wearing medical face mask while working alone because of social distancing policy in the business office

Expanded onshoring, insourcing and nationalism

In a challenge to decades of increased globalization, almost two in five (39 percent) CEOs believe there will be a permanent shift towards onshoring and insourcing, and a similar share expect an enduring increase in nationalism.

“The COVID-19 pandemic has reminded CEOs of the importance of building resilience into their operating model,” said Kristin Rivera, global leader of Forensics & Crisis at PwC US, in the release. “Firms that were able to quickly adopt digital working practices or switch their supply chains were better able to withstand the shock. CEOs now need to simultaneously contend with the unfolding pandemic and to rethink how they operate in the future. Not every innovation developed in a crisis is right for the long term, but there is much to learn.”

CEOs are naturally cautious on their own revenue growth prospects in the year ahead (45 percent somewhat confident: 15 percent very confident): 65 percent are predicting a decline in global growth. Concern about the global economy is highest in Africa, Central & Eastern Europe, Asia and Latin America.

Pandemic concept, close up of scientist holdnig and analyzing planet earth

Business leaders also believe the pandemic increased the importance of responding to a wider range of stakeholder issues, particularly employees

Employee support measures included health and safety (92 percent), well-being (61 percent) and financial support (24 percent). Forty-two percent made contributions to community organizations and almost a third (32 percent) of business leaders reduced their own pay. Those CEOs who maximized retention (36 percent) and protected employee health and safety (92 percent) believe it will have a positive impact on their organization’s long-term reputation.

“The accelerated shift to flexible working has been valuable for many companies,” said Bhushan Sethi, joint global leader, People and Organisation, at PwC US, in the release. “Whatever new models emerge, it’s clear that employee-oriented policies that invest in safety, protection and well-being could become the new differentiator for recruitment, retention and company reputation.”

The changes driven by COVID-19 add significantly to an already full agenda for CEOs. Climate change remains an influential trend for consumers and businesses alike. When asked if the shift to climate change mitigation would endure, the majority of business leaders (47 percent) said it would. Business leaders believe short-term increases in disposables (including sanitizers, masks) and decreases in the use of the sharing economy would only be temporary.

Small business startup multiracial brainstorm meeting with chart paper board everyone mask for covid-19 protection coronavirus.

Limited retreat from cities

While the majority of CEOs (61 percent) believe that there will be lower workplace density than before, they remain divided about what role cities will play in the future: 34 percent believe the shift towards de-urbanization will continue; 38 percent believing it is temporary.

Divided about the role of government

Business leaders are not expecting extended government support, with the majority (57 percent) believing state intervention to be a temporary feature, despite the potential for governments to use the support to influence COVID-19 recovery and policies impacting business. Less than one in three (30 percent) believe government support will be sustained, despite a gloomy outlook for global and organizational growth prospects in the next 12 months. One in five respondents say they declined government backed support for their business during the pandemic.

“Some CEOs may feel like they’ve passed a critical test,” added Moritz. “What’s critical now is that they use the important knowledge they’ve gained about their organizations effectively for business and society. The most enduring shift in this pandemic is the reality that it can no longer be a choice between the long and the short term. We need to address both.”

PwC’s CEO Panel survey, conducted in June and July 2020 as an extension of PwC’s Global CEO Survey, reflects the views of 699 CEOs on emerging business models and key trends resulting from COVID-19. They are leaders of private businesses and public companies, of small firms and $1 bn+ enterprises, and represent a diverse cross-section of industries, countries and territories. Respondents came from 67 countries/territories including: Western Europe (42percent of respondents): North America (7 percent); Middle East (3 percent).

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter