CEO outlook: Optimism, and caution, pave the road ahead
Boston Consulting Group survey finds strategic cost-cutting is part of the path forward
A Boston Consulting Group survey finds CEOs generally optimistic, but focused on executing strategic cost-cutting that leaves their businesses poised for success. (Photo: Getty Images)
A Boston Consulting Group survey finds CEOs generally optimistic, but focused on executing strategic cost-cutting that leaves their businesses poised for success. (Photo: Getty Images)
Latest News
Port of Baltimore May Not Reopen Until Summer Sales & Operations Planning (S&OP) Mastery A New Priority Greets Procurement Professionals in 2024 Cargo Shipping Remains on Hold in Baltimore Following Bridge Collapse Maximizing the Bottom Line: The Power of Procurement More NewsLatest Resource
Sales & Operations Planning (S&OP) Mastery In this Special Digital Edition of Supply Chain Management Review, you will find insights on the importance of sales and operations planning (S&OP) to an organization’s bottom line.All Resources
As economic uncertainty clouds the immediate fortunes for businesses, a recent survey from Boston Consulting Group (BCG) found that CEOs remain focused on positioning their businesses for growth.
According to the report, “CEO Outlook 2023: Caution, Optimism and Navigating the Road Ahead,” 73% of C-suite executives expect macroeconomic uncertainties to be a key challenge this year, yet 79% are optimistic in their company’s performance. BCG said that “while cost cutting is clearly their priority, most companies are doing so in ways aimed at resetting their organizations for growth and enhancing resilience.”
“This nuanced CEO outlook holds true even in sectors where big layoffs have recently dominated the news. For instance, top technology company executives in our survey cited retaining and developing talent and boosting innovation in the year ahead as equally important—if not higher—priorities than shedding workers, particularly in North America,” the report noted. “Our study also found that companies that have devoted the most energy to improving resilience are outperforming their industry peers in total shareholder returns and are more prone to reinvest their cost savings in areas that could give them a strategic advantage.”
The BCG survey of 759 global executives in energy, industrial goods, health care, tech and media, financial institutions, consumer goods and transport/infrastructure/travel/logistics.
While cost-cutting is being undertaken globally, it is not necessarily an organizational-wide approach.
“Companies are deploying a combination of strategies to both control costs and create the ability to navigate uncertainty,” the report said. “While 72% of executives globally said they are acting to decrease costs, they are being thoughtful about how they do it. They are placing the highest priority on achieving cost reductions through efficiency improvements, rather than radically slashing direct costs.”
Just over half (52%) of respondents cited redesigning processes and operational model changes as a key pillar of cost-cutting. Reducing indirect spending (49%), cutting direct spending (43%) and simplifying organizational structure (47%) are the other primary levers being pulled.
At the same time, investments continue, including talent acquisition (59%), innovation (54%) and supply chain (39%).
When it comes specifically to the transport/infrastructure/travel and logistics industries, 75% of firms are investing in cost actions, with 56% focused on innovation and 53% on talent or people actions.
“A majority of executives, particularly in North America, included talent in their 2023 action plans, with an emphasis on improving their employee value propositions and upskilling their workforces,” the report said. “This indicates that they recognize they are in an intensely competitive market for talent and will need the right skills to adapt to new technologies and growing trends, such as the emphasis on climate and sustainability.”
Within the supply chain respondents, building capabilities is a top priority, with focus on efforts such as creating multi-layer supplier mapping and identifying potential risk at the part, supplier and location level.
About the Author
Brian Straight Brian Straight is the Editor in Chief of Supply Chain Management Review. He has covered trucking, logistics and the broader supply chain for more than 15 years. He lives in Connecticut with his wife and two children. He can be reached at [email protected], @TruckingTalk, on LinkedIn, or by phone at 774-440-3870.Subscribe to Supply Chain Management Review Magazine!
Subscribe today. Don't Miss Out!Get in-depth coverage from industry experts with proven techniques for cutting supply chain costs and case studies in supply chain best practices.
Start Your Subscription Today!
Article Topics
Innovation · Management · Supply Chain Management · Talent Development · Technology ·It’s high time to go beyond visibility Driving supply chain flexibility in an uncertain and volatile world View More From this Issue