No Match Found
PwC’s 26th Annual CEO Survey shows UK CEOs are under no illusions that after a tough few years things are about to get tougher still.
As they deal with challenges such as high inflation, the cost of living crisis and continued geopolitical disruption they are exercising caution and exploring short-term measures to mitigate the impact on their business. But at the same time they are resolutely focussed on strategic investments, specifically in the talent and technology needed to transform their businesses and ensure long-term growth and viability.
The survey reveals UK CEOs are confident the interventions and investments they have planned will keep them on track, help them overcome the immediate challenges they face, and prove successful in creating long-term value.
Tech She Can
The research found 22% of UK CEOs believe their business will not be economically viable within a decade on its current course, while 10% believe they have less than three years.
Marco Amitrano, Managing Partner and Head of Clients and Markets, PwC UK, says: “Whatever short-term cuts and caution CEOs have planned they cannot rein in investments in talent and technology. They’re doubling down on those because the need to transform their business for long-term growth is inescapable. But at the same time, vital skills are in short supply and tech investments carry risk if made without the right human insight. So CEOs must get creative and explore combinations of acquisition and collaboration, alongside investments in upskilling, recruitment and retention to deliver the tech-powered change they need at the speed they need it to happen.”
These findings highlight the extent to which the pace of change affecting all organisations means significant interventions are essential for long-term viability and growth - from accelerating digital transformations, to building greater supply chain resilience and creating business models that are both environmentally and financially sustainable.
Marco Amitrano, Managing Partner and Head of Clients and Markets, PwC UK
CEOs are doubling down on investments in talent and technology because the need to transform their business for long-term growth is inescapable.
Among CEOs investing in technology, the majority are doing so with an emphasis on reinventing, rather than just maintaining, their current business (61% compared to 39%).
Antony Cook, Consulting Partner, PwC UK, says: “Almost every organisation is feeling an imperative to make changes to secure their long-term future. We’re helping clients with both fundamental and functional transformations. But at the heart of every change is the need for human insight and experience combined with an understanding of the role technology plays in delivering the right results at speed and scale.”
40% of UK CEOs believe the tech skills and understanding of their teams lag behind the demands of their strategic objectives. That gap will only widen without urgent action and investment in talent and technology.
Sam Samaratunga, Head of Risk, PwC UK, says: “While caution is an essential part of any risk response, organisations that identify opportunities amid constant disruption and take risk in an intelligent way can become more agile and adaptable. They can also build resilience by design. With the right combination of human insight, data and analytics, these opportunities can be better understood and decisions taken with greater confidence. Get this right, and the organisation will gain competitive advantage. Not only can they weather disruption, they can also move faster, protect their reputation and build trust through that process.”
Antony Cook, Consulting Partner, PwC UK
At the heart of every transformation is the need for human insight combined with an understanding of the role of technology.Watch: Human-led, Tech-powered: Trust and Transformation
While some layoffs are planned as part of wider cost-cutting measures there is a far more significant focus among CEOs on boosting their team’s ability to drive long-term growth and transformation. They are doing this through increased investment in recruitment, upskilling and the retention of in-demand skills. Just 16% of CEOs say their organisation has made or is making layoffs, while 59% have no intention of making layoffs.
However, developing talent can take time, and recruitment is challenging with skilled candidates in too-short-supply. As such, CEOs are looking at other ways to meet an urgent need for tech skills, including partnering with other organisations.
Kieragh Nelson, Partner, Execution Managed Services, PwC UK, says: “CEOs know they can’t hit pause when it comes to increasing their technology capabilities. In many instances, they can’t even wait until they’ve upskilled their workforce or recruited the right candidates. But accelerating their ambitions while the economy is slowing down presents a challenge. Our clients are coming to us because they need a digital business partner who can provide agile and scalable delivery services, to give them critical capabilities now, while working with them to develop in-house capability for the long term.”
Kieragh Nelson, Partner, Execution Managed Services, PwC UK
CEOs know they can’t hit pause when it comes to increasing their technology capabilities.Watch: Human-led, Tech-powered: Culture and Capability
Similarly, organisations are also looking at acquiring businesses that can give them a technological edge.
Tim Allen, Deals Partner, PwC UK, says: “Organisations are exercising understandable caution around some deals and investments. But there remains real intent and momentum around deals that bring greater technological skills and digital capabilities. Every deal I’m seeing right now has technology at its heart. It’s an area businesses cannot afford to hold back.”
Investments in technology are also being prioritised, including artificial intelligence (AI), cloud and data and analytics. And such investments can play a vital role in helping organisations deal with immediate challenges and deliver long term value.
Tom Lewis, Technology Partner, PwC UK, says: “AI can help organisations automate tasks so teams can be upskilled and redeployed. But it’s not just an efficiency play, it’s key to enabling organisations to move at speed and make better data-driven decisions. Cloud too can help reduce cost and complexity today, but is also the foundation on which digital transformations will be built, from quickly delivering new services and platforms to giving organisations more advanced analytics capabilities and creating closer integration, across businesses, ecosystems and supply chains.”
Given the importance of such digital transformations, CEOs remain acutely aware of the risks posed by cyber security threats, ranking them as the threat they feel most exposed to over the next five years. And as CEOs commit to investments in technology there is a focus on striking the right balance of skills and understanding across their workforce. Increasing that understanding can help mitigate risk and ensure organisations get the greatest returns on investment in technology.
“CEOs don’t need everyone to become a technologist,” adds Lewis. “But they do need everyone to understand what technology can do for them - what the art of the possible is. And there needs to be sufficient technologists to turn those ideas into realities. Those organisations will be more adept at delivering long-term value while dealing with challenges today.”
Deborah Waterhouse, ViiV Healthcare
This year, my focus will be on a deeper dive into the technology that will change the way the world works. As a CEO you’ve got to make enough time to step back and learn.Read Deborah’s interview
The survey reveals that UK CEOs are confident the interventions and investments they have planned to safeguard their future and drive long-term growth will pay off.
Once they have secured the talent and tech capabilities they need and put in place necessary changes across their business, CEOs are confident they will be in a much stronger position than they find themselves in today.
This can be seen in their responses when asked about their three-year outlook and offers reassurance that the business leaders of today are making investments that will drive economic growth for business through current disruptions and into the future.
In this series, Hannah Fry asks business leaders, experts and academics that very question. Together they discuss and debate the importance of combining human ingenuity with technology to create positive outcomes for people, business and society. Watch now.
Read what other UK CEOs have to say about their priorities, business leadership and issues of trust, talent and technology.
Tech She Can