CEO

CEOs say economy, trade are top election concerns

The questions on CEO radars surrounding the election are big picture, growth-impacting issues. What will the new administration’s economic and trade policies be and will the new president push for more regulations on technology, artificial intelligence (AI) or data? Nearly three-quarters of the CEOs in our October 2024 Pulse Survey agree or strongly agree that the election’s outcome could significantly change how their company does business.

Furthermore, regardless of who wins, 85% of CEOs agree or strongly agree that there will be more regulation on businesses post-election. Is their company culture ready to adapt to so many potential changes? Maybe not. Most (62%) say their company prizes stability and selective risk-taking.

CEOs say their company prizes stability over risk-taking

The United States is in a part of the economic cycle that can be difficult for CEOs to manage. Slowing economic growth often pulls down revenue or profits, yet interest rate cuts can signal a brighter future is not far away. It’s a delicate balancing act to safeguard the bottom line while laying the foundation for renewed growth that could be just around the corner. The election adds a layer of complexity.

Seventy-four percent of the CEOs in our survey agree or strongly agree that the election could significantly change how their company does business. The presidential candidates’ economic policies and stances on regulating technology, AI and data are top concerns, say chief executives in our survey. Looking at the business environment, CEOs say risks come from cyber attacks (70% say it’s either a moderate or serious risk), business model disruption from artificial intelligence (70%) and the uncertain economy (65%).

Uncertainty can reveal opportunities — yet corporate culture may slow a CEO’s ability to take advantage of it. Most CEOs (62%) describe their company’s approach to growth as taking measured steps to minimize risks and seeking a middle ground combining steady growth with selective risk-taking. Only 38% say their company’s view of growth is to pursue opportunity and take big risks for possibly high returns. Being bold may turn out to be the less risky approach as it can be easier for ambitious companies to take advantage of new opportunities. CEOs should consider how they can foster creativity, entrepreneurial spirit and strategic thinking at all levels of their company. Those are characteristics that matter in an age where 45% of global CEOs think their organization faces extinction within a decade.

What you can do

• Examine and change your company’s growth culture. With the help of directors and the C-suite, explore the underlying reasons and rationale for why your company prioritizes stability. Are those reasons and rationales still pertinent today? Will they still be relevant tomorrow as consumers and the economy change?

• Measure risks as well as rewards. Prioritizing opportunity requires a clear view of the potential risks and the size of the possible reward. Prudent risk-taking never goes out of style. Bringing in outside expertise can help reveal hidden risks and confirm that the opportunity is as large as it seems.

• Have an exit strategy. Economic, regulatory and political changes can alter the probability of a project’s success. Set clear metrics for measuring progress, metrics that can help you decide when to wind down a project if it falls short.

Regulation is a big headache for CEOs

The rules set down by federal, state and local governments plus government-run agencies can be a barrier to executing a corporate growth strategy. And election years can add complexity as new administrations often change direction, sometimes radically, compared with the prior administration.

The US regulatory environment (76%) is the top issue that is often or constantly weighing on CEOs as we head toward election day, outpacing financial performance (73%) and economic uncertainty (70%).

Whoever wins the election may not make much difference in easing concern about regulations. Most CEOs (85%) expect more regulation regardless of the election’s outcome.

What you can do

• Build relationships at the federal and state level. Continue engaging with lawmakers and regulators on your industry’s critical issues and seek the help of advocacy groups to help make the case for changing existing regulations or altering proposed rules.

• Strengthen regulatory compliance. Compliance and controls are critical oversight responsibilities. You and your board’s audit committee should review these annually to remain in alignment with regulator expectations.

Artificial intelligence remains front and center

No matter what's in store after the election, CEOs say they’ll continue to invest in technology that can help their company address changing regulations as well as expand the business.

While CEOs tell us there are some differences in spending priorities between the candidates, AI will remain a leading focus under either one. Ninety-four percent say they’d invest the same or more under a Harris administration, and 91% say the same under a Trump administration.

Still, CEOs recognize that their technology plans may need to change depending on the regulatory landscape. Under either a Trump or Harris administration, roughly one-third say technology regulations are among the top 3 policy risks to their company.

What you can do

• Focus on technology ROI. The return on investment for tech projects is often not fully realized. This is typically because the goals of tech projects (such as efficiency gains or increased automation) are not agreed upon by CEOs, executives and technology leaders during the design phase when measurement tools can be built to confirm improvement is being delivered. Take a holistic approach that combines process measurement tools (such as process and task mining methods), productivity measurement tools and easy-to-use analytics dashboards to monitor progress.

• Emphasize executive teamwork. Technology leaders should be part of strategy conversations at the highest management levels to better understand business needs so they can clearly explain what’s possible with technology. Encourage your colleagues in the C-suite to work together to achieve common goals and share responsibility for successes and failures.