The headline reading of PwC’s Global Annual CEO Survey 2024 is that leaders are leaning into radical change, in part because of the transformative effects of generative AI. No fewer than 45% said their business would no longer be viable in 10 years, if they didn’t change course.
Reading between the lines, it’s hard to escape the impression that while CEOs recognise the need for reinvention, many don’t entirely know how to make it happen.
While seven in ten said genAI would significantly change the way they create value, only a third had actually done anything about it. When probed about how they thought it would add value, many more (64% vs 41%) pointed to marginal employee efficiency gains than to creating new growth – hardly a sign of radical thinking.
I suspect the problem is twofold. Either leaders don’t yet have a vision for how things like AI reinvent their value proposition – not unreasonable given how rapidly it’s advanced – or they perceive the barriers to making such a change as too formidable.
The survey lists several, and they’re the usual suspects: the lack of skills, budget and executive bandwidth, and the drag of internal resistance and bureaucracy.
Rapid, profitable growth is the easiest route to reinvention, allowing you to bulldoze over many of these barriers. But what can companies that are fundamentally challenged do, when they’re confronted with the imperative to change?
Leaning into change
The first option is to do nothing. It’s unpalatable, but some might look at the costs of reimagining their business, and conclude that shareholders would be better off milking it as a cash cow for time, and investing in the future somewhere else.
The second option is far better, but harder. The companies I know that are best at reinvention – the ones that always seem ahead of change rather than hurriedly reacting to it – consciously build their organisational capacity for it.
They may not know what the future holds. But by reducing barriers to change, they are ready to transform when the time comes. This might include:
- The board requiring the CEO to report regularly on how the company is leaning into systemic challenges.
- The CEO allocating time, resources and bandwidth toward rethinking the business. It doesn’t have to be their own time – external consultants or senior executives with the right skills and mindset can take this as part of their brief, meaning the CEO doesn’t have to fix the plane while also flying it.
- The business adopting a lean start-up methodology to test hypotheses for business model or value proposition innovation.
- An allocation of investment capital towards ‘building the future’. This arguably would be the best form of ‘risk mitigation’ / proper governance, for companies where stakeholder interest is taken seriously.
Reinvention is not a one-off imperative, easily sorted. It is the mentality that Bowie, Madonna and Steve Jobs epitomised; the ability to pinpoint the zeitgeist ahead of the curve and adapt to it.
As such, responsible companies such as yours, need to consciously design how your business senses and responds to change generally. Through having the right people, in the right structure, with the right resources – you can turn the reinvention imperative into an opportunity, rather than a threat.
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