Sunday, 23 June, 2024

CEOs Talk the Future of Business Due to COVID

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A recent report by the Conference Board finds:

“According to a new global survey, CEOs and C-Suite executives think COVID-19’s fallout will result in leaner and more agile companies. Businesses will likely emerge from this pandemic using more contract workers and fewer permanent staff, and business travel will be reduced in favor of more videoconferencing.

“The Conference Board surveyed more than 1,300 CEOs and C-Suite executives about COVID-19’s long-term impacts. They see a return to pre-pandemic revenue levels at least a year or more away. More than 40 percent predict a U-shaped recovery, with more sustainable growth resuming by Q4 2020. About a third expect an L-shaped recovery, with sustained growth resuming only in late 2021.

“Executives also say this crisis will compel them to accelerate their digital transformation plans and rethink their business models. Also, they do not see an increased urgency around the long-term restructuring of supply chains, reflecting a degree of confidence in their ability to manage emerging risks. Nor do most of them think cities will lose their staying power.”

“‘In the short term, preparing for growth and recovery will require finding the right balance between conserving cash and investing in the innovations needed to succeed in a new commercial landscape – the next normal, if you will,’ said Chuck Mitchell, a report author and Director of Knowledge, Content, and Quality at The Conference Board. ‘Post-COVID-19, CEOs expect their organizations to emerge leaner and more agile, redefining how work gets done.’

“Additional takeaways from the report and survey results include:

What Will the Economic Recovery Look Like?

A plurality of CEOs globally anticipate a U-shaped recovery (extended contraction in Q3, growth resumes by Q4).

  • Europe is most optimistic: 55 percent of CEOs in Europe see a U-shaped recovery as the likely scenario.
  • United States and China: In both countries, slightly more than 40 percent anticipate a U-shaped recovery.

Nearly a quarter of US and Japanese CEOs expect a W-shaped recovery (second contraction in latter half of 2020).

  • Global: Just 16 percent of CEOs see this as likely.

Globally, just 11 percent of CEOs expect a V-Shaped recovery (a fast recovery in Q3). But, China’s CEOs have more hope.

  • China: Notably, 21 percent of CEOs there predict a V-Shaped recovery.

‘”While business leaders are navigating through the many disruptions and uncertainties brought on by the global pandemic, they are focusing on shaping long-term growth strategies in a post-pandemic world,’ said Ataman Ozyildirim, a report author and Global Research Chair of The Conference Board. ‘Even though they expect their business revenues to recover slowly and not fully before the end of 2021, their focus on accelerating digital transformation and innovating new business models to serve their customers could lay the ground work for a sustainable growth path in the longer term.’

Company Revenues: When Will They Return to Pre-COVID-19 Levels?

47 percent of CEOs globally predict pre-COVID-19 revenue levels will return sometime in 2021.

  • Europe: 62 percent of CEOs there see this as likely. United States: 51 percent of CEOs there see this as likely.
  • China: 32 percent of CEOs there see this as likely, but 41 percent expect an earlier recovery in 2020.

Human Capital, Management, and Talent: COVID-19’s Long-Term Impacts

CEOs plan to emerge from the pandemic with more contract and gig workers and fewer permanent, in-house workers.

  • CEOs: They cite it as the 4th most important long-term impact in this category.
  • C-Suite: Notably, they put it far lower on the list, citing it as the 10th.

Post-COVID-19, expect more flexible work hours and more permanent telecommuting.

  • Adopt new work policies to include more flexible hours: CEOs cite it as 1st; C-Suite cites it as 2nd.
  • Permanently increase the number of employees who can work remotely: CEOs cite it as 2nd; C-Suite cites it as 1st.

Teams will get a makeover.

  • Create agile project teams to redefine how work gets done: Both CEOs and C-Suite executives cite it as 3rd.

Company Operations: COVID-19’s Long-Term Impacts

Companies will emerge from COVID-19 as leaner, more agile organizations.

  • Accelerate cost management & budget reductions: CEOs cited it as the 4th most important long-term impact; C-Suite cited it as 3rd.
  • Reduced business travel since videoconferencing has been effective: CEOs cited it as 3rd; C-Suite cited it as 2nd.

COVID-19’s biggest legacy on operations: accelerated digital transformation.

  • Both CEOs and the C-Suite cited as 1st, speed up the pace of transformation into a digitally driven organization.

Despite short-term disruptions, the pandemic does not radically change the restructuring of supply chains in the long term.

  • Just 10 percent of CEOs and 7 percent of the C-Suite see supply chain restructuring as a significant long-term impact.

A Mile Apart: 3 Notable Disagreements Between CEOs and the C-Suite

  • Emerge with a smaller permanent workforce, and make greater use of a temporary and flexible workforce:
    • CEOs cite it as the 4th most important long-term Human Capital change; C-Suite cites it as 10th.
  • Reconfigure our physical office space to allow for social distancing:
    • CEOs cite it as the 10th most important long-term Human Capital change; C-Suite cites it as 5th.
  • The pace of economic recovery:
    • 56 percent of CFOs expect a U-shaped recovery, but just 42 percent of CEOs agree.


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