Weekly Business Insights from Top Ten Business Magazines | Week 328
Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Since September 2017 | Week 328 | December 22-28, 2023
Strategy & Business Model Section | 1
What matters most? Eight CEO priorities for 2024
By Homayoun Hatami and Liz Hilton Segel | McKinsey & Company | December 12, 2023
Extractive Summary of the Article | Listen
What matters most? Based on the authors’ talk to hundreds of CEOs every year, and many of their colleagues, the consolidated views of these conversations about how companies can do better for society, communities, and employees—and the prosaic business of how they can pay for it all, and reward investors too – eight priorities for CEOs in 2024:
- Gen AI goes from proof of concept to scale. The biggest story of this year (or decade) was the arrival of generative AI (gen AI). This is the real deal, folks. Thousands of companies in every industry and in every part of the world are already using a simple gen AI interface to radically transform every imaginable business activity. But while innovators dominate headlines, it’s scalers that dominate markets. CEOs need to figure out three things, posthaste: which parts of the business can benefit, how to scale from one application to many, and how the new tools will reshape their industry.
- How to outcompete with technology. As the digital era enters middle age, most companies have at least started a digital and AI transformation. But few are getting the results they want; that’s usually because they haven’t done the fundamental organizational rewiring needed to extract maximum value from the hard work of digitizing the enterprise. Digital winners grow revenues and cut costs faster than others.
- The biggest capital reallocation in our lifetime. Energy transition – the bill has only gone up. For the simple reason that amid uncertainty, investors and companies have held back from committing their capital, even as the Earth grows hotter. Let’s be clear: what needs to happen is the creation of thousands of new green-technology businesses, in every part of the emerging business system.
- What’s your superpower? Think of any company you admire, and you can likely rattle off one or two superpowers that make it uniquely successful. Toyota and its Toyota Production System. LVMH and its exquisite craftsmanship and the entrepreneurship of its brand leaders. Disney and imaginative customer experiences. A distinctive capability can lift a company out of the mire of clogged, commoditized markets and on to the high ground of outperformance. Exceptional implementation is part and parcel of building a new capability.
- Learn to love your middle managers. Companies need to rethink their philosophy about middle managers and recognize them for what they actually are: the core of the company.
- Geopolitics: Beating the odds. As CEOs watch the changes unfolding in the global geopolitical order, all agree with the sentiment. What comes next? One thing is for sure: events have an uncanny way of defying the expectations of experts. In the face of that, management teams and boards should consider black swans and gray rhinos in their scenarios and build geopolitical resilience that will serve them well, no matter which side of the coin comes up.
- Navigating the road to courageous growth. It’s a funny thing: growth is always job one for CEOs, but the path to get there is never clear. Sometimes it’s about seizing market share; sometimes it’s about expanding into new markets; sometimes it’s about making a left turn into something completely new. One needs to be courageous to find its own and pursue.
- A new lens on the macroeconomy. Nearly four years after COVID-19 rewrote history, some CEOs are still waiting for macroeconomic certainty. That’s unlikely to happen—and that’s OK. Leading firms capitalize on uncertainty: they assess their risk appetite, then invest near the bottom of cycles.
A key takeaway from the article
- What matters most? Based on the authors’ talk to hundreds of CEOs every year, and many of their colleagues, the views consolidated in eight priorities for CEOs in 2024: Gen AI goes from proof of concept to scale; How to outcompete with technology; The biggest capital reallocation in our lifetime – Energy transition; What’s your superpower – a distinctive capability can lift a company out of the mire of clogged, commoditized markets and on to the high ground of outperformance; learn to love your middle managers; build geopolitical resilience; Navigating the road to courageous growth; and Leading firms capitalize on uncertainty.
(Copyright lies with the publisher)
Topics: Decision-making, Risk, Uncertainty, Leadership