Our latest global CEO Survey explores an urgent issue facing chief executive officers: how to stay ahead of future threats while managing immediate ones. Our annual report examined this dual imperative in detail, offering insights in three key areas: winning the race for the future, navigating current tensions and ensuring a balanced agenda between short- and long-term pressures.
This year, our Canadian survey respondents included a large number of CEOs of private companies, and their responses reflect the tensions facing their global counterparts this year. So what are some key findings and takeaways for Canadian private companies navigating a challenging 2023?
1. The race for the future
How are private company CEOs approaching long-term trends and disruptions, like digital transformation and climate change?
25% of Canadian private company CEOs (versus 38% globally) don’t think their organizations will be viable after 10 years if they continue on their current path.
60% of Canadian private company CEOs (versus 53% globally) say shortages of talent and skills will affect their future profitability to at least a large extent. 43% (versus 48% globally) expect technological disruptors like artificial intelligence to have a significant impact on profits.
65% of Canadian private company CEOs (versus 75% globally) are planning, are working on or have completed initiatives to innovate new, climate-friendly products or processes. 62% (versus 76% globally) are planning, are working on or have implemented initiatives to reduce their organization’s greenhouse gas emissions.
2. Today’s tensions
What’s the outlook for the economy, and how are private company CEOs managing a volatile near-term environment?
68% of Canadian private company CEOs believe Canada’s economic growth will decline in the next 12 months. Among global private company respondents, 59% expect growth to fall in their country.
While 80% of Canadian respondents (83% globally) have already cut or are considering reducing operating costs to mitigate against economic challenges or volatility, they’re less likely to have taken or be looking at actions such as hiring freezes (28% in Canada compared to 41% among global CEOs) or reducing the workforce (34% versus 38% globally).
Despite pessimism about the economy, private company CEOs are more optimistic about the outlook for their own organizations. 74% of Canadian respondents (versus 72% globally) are at least moderately confident about their organization’s prospects for revenue growth in the next 12 months.
3. A balanced agenda
How much time do private company CEOs spend on reinventing the business for the long term, and to what extent are they taking advantage of opportunities, such as collaboration with other organizations and harnessing the power of organizational culture, to help accelerate change and manage competing pressures?
Canadian private company CEOs say they spend 22% of their time (the same percentage as their global counterparts) on evolving the business for the future.
While 51% of Canadian private company CEOs (46% globally) say they cooperate with non-business entities on diversity, equity and inclusion, they’re less likely to do this when it comes to matters like climate change (34% versus 38%) and sustainable development (44% compared to 51% among global respondents).
When it comes to the role of organizational culture in supporting change and innovation, Canadian private company respondents see some advantages for their organizations. For example, 91% (84% globally) say their employees’ behaviours are usually or often aligned with the company’s values and direction. But they were less likely (50%) than global respondents (55%) to say their leaders usually or often encourage dissent and debate.
Takeaways for Canadian private company CEOs
Our survey results show Canadian respondents recognize the challenges the dual imperative presents and are taking some of the actions required to reinvent their businesses for the future. While they’re being cautious and focusing on costs in response to short-term pressures and uncertainty, they acknowledge the need to keep investing to stay ahead of key threats—notably skills and talent shortages—so they can continue transforming their businesses to remain relevant now and in the long term. Still, finding time to focus on reinventing the business is a growing challenge, especially given other demands on survey respondents’ attention, such as managing current operating performance as well as engaging with employees, investors, customers and others.
Our results show three key opportunities for private company CEOs to navigate the time and resource pressures at the heart of the dual imperative. By considering the questions and suggested approaches below, leaders can increase their readiness for a dual-imperative world:
What kind of ecosystem are you building? The complexity of today’s challenges means it’s more important than ever for Canadian private companies to embrace collaboration with other organizations, such as non-business entities, on key societal issues. This includes climate change, an area in which Canadian respondents tend to lag behind their global counterparts.
How central are you to your organization’s reinvention? Canadian private company leaders will need the support of the entire organization to successfully reinvent the business. This will require CEOs to focus on creating a more empowered workplace culture in which their people have the autonomy to move faster and come together to pursue new opportunities and innovations for the future.
What’s your organization's place in the world? Now is the time to make deliberate choices about the value the organization creates and for whom. This is key to deciding where to invest and reallocating resources as needed to free up capacity for reinventing the business.
Building on the strengths of Canadian private companies
By tackling the questions and issues our survey has highlighted, CEOs can lead the way forward on reinventing their businesses to survive and thrive both now and in the long term. We believe Canadian private companies have many advantages in making the changes required, with their entrepreneurial spirit, agile nature and greater leeway to take risks giving them an edge in transforming for the future. By building on these strengths, CEOs can not only ensure resilience in what our survey suggests will be a defining year for Canadian businesses but also position their organizations for a bright long-term future.
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