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.
SC
MR
Latest Supply Chain News
- Three frameworks for creative problem-solving in supply chain
- Mitigating geopolitical uncertainty: 4 essential tactics for industrial CSCOs
- Supply chain strategy for medical devices: A Q&A with industry expert Sanjay Gupta
- Inventory Management and the Supply Chain: Outlook 2025
- How technological innovation is paving the way for a carbon-free future in logistics and supply chains
- More News
Latest Podcast
Explore
Topics
Business Management News
- Three frameworks for creative problem-solving in supply chain
- Mitigating geopolitical uncertainty: 4 essential tactics for industrial CSCOs
- Supply chain strategy for medical devices: A Q&A with industry expert Sanjay Gupta
- How technological innovation is paving the way for a carbon-free future in logistics and supply chains
- Parcel shipping spend: The untamed holdout in today’s supply chains
- Körber Supply Chain Software’s Craig Moore says MercuryGate acquisition is about the customer
- More Business Management