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Operations leaders know they must rapidly adopt new technologies to stay competitive. More than half (54%) say increasing the use of AI and generative AI (GenAI) is a high priority, according to our June 2024 Pulse Survey. It won’t happen without the right people in place, so COOs are addressing capabilities gaps by hiring employees with necessary skills (46%) and training existing employees (46%). Also near the top of the priority list as COOs look to steady their teams and push into new technology: making operations a more strategic business partner to the CEO.
of COOs say their company is behind the competition in adopting new technologies, including AI and GenAI
Operations leaders are feeling pressure to leverage AI and GenAI in an ever-evolving race with competitors. More than two-thirds of COOs say their company is behind the competition in adopting new tech, compared to 55% of all executives and only 42% of CEOs. That could be why increasing the use of AI and GenAI is COOs’ top priority — 54% say it’s a high priority. Other priorities include strengthening talent attraction and retention along with making their function a more strategic business partner to the CEO.
Still, investments in AI and GenAI aren’t matching this prioritization. Just 36% of operations leaders say their function is investing in AI and GenAI to fill capabilities gaps, trailing other actions such as hiring and training. Many organizations may still lack the talent to make the most of technology investments, and COOs also could be struggling to get other members of the leadership team on board with AI.
In addition, some operations leaders might view AI and GenAI as replacements for tasks for which their teams are already capable. Regardless, to remain competitive, COOs should better align funding with priorities to confirm their technology is more competitive — and that they have the appropriate talent to realize its full potential.
of COOs are training existing talent to address capabilities gaps
COOs may see technology as a critical, immediate need, but when it comes to filling capabilities gaps, more operations leaders are investing in the human element. That means hiring employees with necessary skills and training existing team members — each chosen by 46% of COOs. Companies need the right people to help steer them to a future with AI.
If they can’t employ them directly, operations leaders aren’t afraid to look outside their own walls. Thirty-nine percent are engaging third-party providers to supplement skills, and 38% are exploring external strategic business partnerships.
of COOs say day-to-day operations prevent their company from focusing on the future vision
COOs continue to be leaders of controlled chaos — managing many short-term challenges often at the expense of thinking long term. They’re more confident in their ability to address temporary disruptions like weather events, port closures, utilities outages and supplier disruption, with 44% strongly agreeing that they’re well prepared to do so. Only 33% say the same about long-term disruptions like military conflicts, climate change or resource scarcity.
It's no surprise, then, that 61% of operations leaders say day-to-day operations prevent their company from focusing on the future. That’s one of the highest responses among C-suite leaders, and it emphasizes the need for operations leaders to find time for planning — regardless of the tasks already on their plate. If they don’t, they risk making short-sighted hires and strategic missteps that they may need to undo as time goes on.
of COOs say making their function a more strategic business partner to the CEO is a high priority
Operations leaders need buy-in from the top of their organization, and they know it. It’s no wonder that 45% say creating a more strategic partnership with the CEO is a high priority, and 35% seek to expand their function’s influence across the entire C-suite. One reason could be that many C-suite members are in quiet competition with each other to pull the organization in their desired direction — while putting a stamp on their resumé to be the next top dog.
This may be a disconnect that COOs should consider remedying. COOs and CMOs, for instance, often approach goals from different ends of the spectrum. One often concentrates on controlling costs while the other is focused on selling. But we found these leaders are more aligned in their priorities than they may think. It’s CMOs who most closely mirror operations leaders on things like positioning the company competitively through technology and fundamentally changing the business model.
Our latest PwC Pulse Survey, fielded May 15 to May 22, 2024, surveyed 673 executives and board members from Fortune 1000 and private companies about the current business environment, the risks executives are facing and their company’s strategic plans and priorities. Of the respondent pool, 80 were COOs and operations leaders.