Weekly Business Insights from Top Ten Business Magazines | Week 288 | Leading & Managing Section | 1

Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 288 | March 17-23, 2023

Actions the best CEOs are taking in 2023

By Carolyn Dewar | McKinsey & Company | March 15, 2023

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In his 2017 book, Hit Refresh, Microsoft CEO Satya Nadella writes that great leaders “recognize the true signal within a lot of noise” and act accordingly. Fast forward to 2023, and the torrent of trends, ideas, and information that leaders now face makes knowing what matters more difficult than ever.

It’s against this backdrop that McKinsey conducted its latest CEO Excellence Survey, to take the pulse of leading CEOs’ evolving priorities and the actions they’re taking in response. The authors started by asking a group of the world’s top-performing CEOs which trends will have the biggest impact on how they lead their business in 2023 compared with past years. Their answers suggest that three “true signals” matter most: digital disruption, the economy, and geopolitics.   Second, the authors asked about the specific and pragmatic actions they are taking as a result of these signals.

Actions to deal with digital disruption.  Developing advanced analytics (62 percent of CEOs): OpenAI’s introduction of ChatGPT in late 2022 put gasoline on the already well-lit fire of companies looking to leverage advanced analytics for competitive advantage; enhancing cybersecurity (48 percent); and Automating work (45 percent).

Actions to deal with the risk of high inflation and economic downturn.  Reduce operating expenses (76 percent) – by supply chain renegotiations, tax optimization, deferring capital spending, tightening expense policies, and increasing employee productivity; redesign products and services (61 percent) to give better value to customers with existing products;and reassess strategic and economic assumptions (54 percent).

Actions to deal with the escalation of geopolitical risks.  Build robust compliance capabilities (65 percent); Create resilience in supplier networks (62 percent); and Invest in monitoring and response capabilities (56 percent).  

The three trends discussed above are clearly ranked as the highest “signal within the noise” by the best CEOs. There is, however, a second block of three trends that a meaningful number of CEOs also flagged as important: talent, ways of working, and climate change.

3 key takeaways from the article

1. McKinsey conducted its latest CEO Excellence Survey, to take the pulse of leading CEOs’ evolving priorities and the actions they’re taking in response.
2. The survey suggests that three “true signals” matter most: digital disruption, the economy, and geopolitics.   To deal with digital disruption CEOs are focusing on development of advanced analytics, enhancing cybersecurity; and automating work.  To deal with the risk of high inflation and economic downturn CESO are reducing operating expenses; redesigning products and services to give better value to customers with existing products;and reassessing strategic and economic assumptions.  Actions to deal with the escalation of geopolitical risks include building robust compliance capabilities; creating resilience in supplier networks; and investing in monitoring and response capabilities.  
3. A second block of three trends that a meaningful number of CEOs also flagged as important: talent, ways of working, and climate change.

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Topics:  Leadership, Strategy, Decision-making. Technology