CEO Pulse Survey 2020

September 2020

Building strategic agility beyond the crisis

Ireland, as much as any other nation across the world, has seen unprecedented changes to people's way of life, the economy and the world of work. The disruption caused to business life has been dramatic and sudden. New ways of working and doing business have rapidly become the norm. What were previously considered to be long-term visions of changes to the way we work and businesses function—digital transformation, remote operations, moves away from traditional structures and business models—very quickly became imperatives.

A close-up photo of a man using a laptop.

How an organisation responded to coronavirus defined their immediate ability to survive and succeed in uncertainty. Many leaders quickly realised that the digital capabilities of their company would determine its ability to adapt to rapidly changing circumstances. This awareness has helped speed the adoption of digitisation initiatives, among both employees and customers.

At the end of six months of COVID-19, we felt the time was right to reach out to our executive audience and see how business leaders felt about what had transpired during the pandemic and what were their priorities for the months and years ahead. In our half-yearly check-up, we canvassed the opinions of almost 700 chief executives in companies in almost 60 countries globally, including Ireland.

Confidence in changing times

To begin, we asked about their levels of confidence, and whether the changes and ways they adapted their operations would last into the future, and which would be transitory.

Unsurprisingly, we found the majority of CEOs were cautious about their revenue growth prospects for the year ahead. This matches the findings of our CFO survey in June in which over a quarter of Irish finance leaders said they believed it will take more than a year for their businesses to recover from the pandemic, longer than any other country participating in the survey. 76% of Ireland's finance leaders expect a decrease in their companies' revenues and profits this year as a result of the pandemic. But positively, the Pulse survey reveals that CEOs plan to continue with the strides they have made toward digitisation and creating a flexible and employee-oriented workplace. They see these as pathways to return to growth and profitability in the new normal.

CEOs will prioritise business models that are digital and flexible

We asked business leaders which business models they were prioritising for change in light of the experience that organisations had in the COVID-19 pandemic. Although there was clear crossover between the answers in Ireland and internationally, there were some interesting variations. The main priority for businesses here and globally was the digitisation of core business operations, processes and practices, with 23% (Ireland) and 24% (RoW) making it their number one action. But unlike their overseas counterparts, Irish CEOs put the flexibility that having their workforce be able to work remotely gives them as a top priority. Some 43% of respondents in Ireland put it as their number one or number two top action, as opposed to only 29% globally.

Question: Your business model after the COVID-19 pandemic will become more...

Global
Ireland

Digital by digitising core business operations and/or processes.
%
%
Virtual by adding digital products or services.
%
%
Flexible by increasing share of remote workers and/or contingent workers.
%
%
Employee-oriented by expanding employee health, safety and/or wellness programmes.
%
%
Lean by decreasing employee headcount.
%
%
Automated by replacing human labour.
%
%
Sustainable by lowering our carbon footprint.
%
%
Local or domestic by transitioning our supply chain from offshore to onshore providers.
%
%
Asset-light by reducing real estate footprint.
%
%
Acquisitive by growing market share through mergers and acquisitions.
%
%

Source: CEO Pulse Surveys: Global (base: 30) and Ireland (base: 699) – 21 September 2020

Irish business leaders also lead the way in their adoption of transformation, saying they have a strong appetite to make their business models more virtual by adding more digital products and services to their offering. 20% said it was their main long-term change goal, with the same number saying it was their number two priority. Global CEOs polled said 17% and 13% respectively to the same query.

Both in Ireland and internationally, business leaders are seeing the value in making their operations more employee-centric. They have seen the importance of engaging, trusting and making efforts to care for their workforces since the start of the pandemic. That duty of care extends to considering what may be an uncertain and possibly frightening prospect for some workers. 23% of Irish leaders said their first priority would be expanding their health, safety and wellness programmes for their staff in the months ahead. They also have little appetite for making their operations leaner by reducing headcount – only 3% in Ireland said that was their first priority.

Digitalisation and virtual business models

We asked which organisations expected their business models to further embrace digitisation and virtual business models as a result of COVID-19.

Increased digitisation offered companies resilience and the ability not only to survive but also to overcome obstacles to lasting change. The need to maintain operations during a pandemic has now sped digital adoption. From the responses to our survey, we saw that the technology, media and telecommunications (24%), health (24%) and financial services (23%) sectors believed that their operations would become more virtual as a result of the changes to their products and services after the pandemic. Telecoms organisations recognise their customers' high demand for in-home entertainment, while those in healthcare are eyeing the massive opportunities that have opened up for telemedicine since the onset of COVID-19.

Global pessimism, local optimism

When it comes to their outlook on the prospects for the global economy, CEOs are united across around our respondents that it is set for a significant decline in the next 12 months. Some 33% (31% globally) expect the world's economy to decline greatly over the year ahead, and another 27% think that it will decline moderately. An optimistic group of 27% of those who replied to the survey believe that the economy will moderately improve.

Question: Do you believe global economic growth will improve, stay the same or decline over the next 12 months?

Global
Ireland

Improve greatly.
%
%
Improve moderately.
%
%
Stay the same.
%
%
Decline moderatly.
%
%
Decline greatly.
%
%
Don't know.
%
%

Source: CEO Pulse Surveys: Global (base: 30) and Ireland (base: 699) – 21 September 2020

Despite these sobering realities, it's clear that at least some CEOs feel they've passed a critical test and are now armed with important knowledge about their organisation – and are prepared to capitalise on the enduring trends brought about by COVID-19.

Reflecting this sentiment, there remains an enduring optimism when it comes to CEOs and their confidence in their organisations' prospects for growth in the next 12 months, in spite of what they have experienced first-hand. In Ireland, 70% of leaders said they were very or somewhat confident in their business' ability to achieve revenue growth in the next year. 60% of international leaders shared the same sentiment.

People are the priority

The advent of COVID-19 and the post-pandemic business landscape inescapably means that there will be long-term changes to an organisation's business model. Our CEO Pulse Survey reveals that among those enduring changes, people are the priority, An overwhelming 97% said that they felt that protecting employee health and safety would be a lasting result. 70% felt that conducting employee well-being initiatives will remain in place for the foreseeable future. Both are key factors in ensuring employee comfort and engagement, with 47% saying that maximising employee retention is shaping their business model in the wake of the crisis we have recently faced.

While employees are a critical part of the business equation, customers and their sentiment are also hugely important. 57% of Irish CEOs will make adapting their products and services to address their customers' health and safety risks a priority in their strategic planning, while 23%, cognisant of the altered employment situation of many of their consumers, are looking at lowering the cost of their products and services.

The ability to create a safe workplace can be a differentiator, in terms of both the employee and customer experience. Employers who focus on safety will build loyalty and enhance their organisation's reputation.

Creating a positive perception

Clearly perception in the marketplace is an essential element of ongoing success, and transparency and authenticity are values that businesses realise are essential in the current climate. We asked respondents in Ireland to identify the actions that they felt would have the most positive impact on their organisation's long-term reputation. 45% said that protecting their employees' health and safety, and 35% said adapting products and services to address customer concerns would have that positive impact. It is also fascinating to see that 43% believe that maximising employee retention would show their reputational worth in the long term. Meanwhile, 25% felt that a strong indicator of their bona fides would be deleting or forgiving payments owed by their customers.

What can we take from the 2020 CEO Pulse Survey?

Throughout the COVID-19 experience, across sectors and industries, CEOs learned that increased digitisation provides the agility needed to navigate unprecedented disruption. Customers are receptive to virtual products, services and experiences.

Business leaders uncovered the value, and potential cost savings, in giving employees more flexibility around where and how they work. In many cases, they will reinvest these newfound savings in creating safer, more employee-oriented workplaces, built on a foundation of trust.

Although these new business models emerged from crisis-driven necessity, the rapid adoption of next-generation technologies and new approaches will set a precedent for organisations to navigate future cycles of challenge and prosperity.

How to rethink your business model

Based on the insights of our 699 respondents, here's how companies can rethink their approaches, reconfigure business models and seize opportunities.

1. Establish a flexible business and workforce plan

Develop and evaluate scenarios that consider all aspects of your business—customers, products, real estate and employees—and create a dynamic business and workforce plan that accounts for health, economic and societal considerations. The focus on greater flexibility is not just a crisis response; it is an evolution of how, when and where work gets done. The pandemic proved to many leaders that employees don't need to be physically onsite to be productive. Moreover, by approaching 'work' as something your organisation does rather than somewhere it goes, you can adopt new ways to serve clients, reduce costs and gain access to new talent markets. At the same time, in some organisations, the work of a select group of high performers may be boosting productivity in a remote model that is not sustainable. Leaders will need a clear picture of what's happening, and must proactively address issues related to equitable distribution of work, flexibility arrangements, and employee burnout and well-being.

2. Invest in the digital tools that will sustain your resilience

It took a global pandemic for some organisations to jump-start their digital transformation, but there's no turning back now. They've seen how digitisation enables even the largest and most mature organisations to respond to crisis, whether it's standing up a remote work model or changing how customers interact with their products and services. A critical part of this transformation will be improving your organisation's information supply chain and building a world-class analytics capability, together with a deliberate approach to building digital workforce capabilities.

3. Take your commitment to agility to the next level

Embed the innovations you adopted during the crisis into your culture. Take the time to review your crisis response, catalogue best practices and determine how to make those practices part of your organisation moving forward. Many businesses will be required by their stakeholders to begin assessing how other systemic risk and low-probability, high-impact events will affect them. Those that harness technology and new ways of working to sustain their operations, supply chains, employee experience and customers during a crisis will gain a competitive advantage. And it's not just a matter of being reactive: understanding how your organisation can maintain agility will allow it to pursue new opportunities when it wants to, rather than when it has to.


About the survey

Over a period of 18 days (from 15 June to 3 July 2020), PwC fielded an eight-question online survey to its CEO Panel.

The CEO Panel is composed of 3,500+ PwC CEO clients who have previously completed the Global CEO Survey and have opted in to participate in future PwC surveys. There were a total of 699 responses. Respondents come from a mix of regions. Overall region breakdown: Africa 7%; Asia-Pacific 16%; CEE 12%; Latin America 14%; Middle East 3%; North America 7%; Western Europe 42%. Territories with statistically significant findings included UK, Romania, Portugal, New Zealand and Ireland.

Contact us

Ciarán Kelly

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 6408

David McGee

Partner, PwC Ireland (Republic of)

Tel: +353 1 792 8785

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