CEOs worry business disruption at highest since World War II

Pressures from digitalisation, Brexit, the pandemic and now the threat of war, mean the cycle of disruption is more rapid, while funds available to help companies adapt are low. As a result, a new report examining the attitudes of business leaders around the world has found that executives feel they face the most disruption in 80 years.

Research from AlixPartners has put forward some alarming findings from the perspective of international business leaders. According to the consultancy’s analysts, the past few years have been so tumultuous that they have resulted in a chain reaction, whereby it is no longer traditional economic forces at work that are reshaping the economy. Instead, it is an ever-accelerating pace of change.

The researchers claim that economic forces are now “interacting at an ever-increasing pace”, and in doing so they upend existing business models, markets, and value networks at an historically unprecedented rate – leading to yet more disruption. At this point, the study contends, “the very idea of “business as usual” is obsolete” as “there is no usual.”

On top of this, the cyclical rate of disruption having become almost continuous has coincided with a downturn in the credit cycle. As a result, it will be tougher for firms looking to survive new disruption to borrow and invest. Instead, AlixPartners suggests that if executives are to lean into an economy of constant change, they will have to rely on key skills like organisational agility, responsiveness, and adaptability.

Citing Covid-19, AlixPartners asserts that many companies are already aware they cannot afford to simply focus on that particular crisis. While it has “arguably been the biggest disruption to the global economy in the past 80 years” – with millions of deaths, mandated shutdowns of industries, disrupted supply chains, massive outlays of public spending, and ongoing uncertainty of what will be next – only 3% of executives listed the pandemic as their top worry in the coming year.

This is not driven by optimism regarding the pandemic, either. Of the 3,000 executives AlixPartners surveyed globally, results suggested technological innovation, demographic changes, climate disruptions, and growing trade barriers, formed a perfect storm for most respondents.

Topping the list, 12% of executives said automation was the biggest disruptive force they would face in 2022 – while a further 52% listed various other technologies, and the challenger business models that might emerge around them. At the same time, environmental and social concerns were highest priority for 8% of respondents – as climate events continue to take greater tolls on production and supply chains. And as war continues to rage in Ukraine, 7% worried geopolitics would be the main disruptor, while a further 5% noted concerns over protectionism and tariffs arising from the situation.

Amid this barrage of challenges, executives seem unconvinced that they can change fast enough. While 94% of executives believe that their business models will need to change in the next three years, 72% of CEOs believe these disruptions are so great that their personal jobs are at risk. This represents a huge leap from 52% just a year ago.

Commenting on the tough road ahead, AlixPartners CEO Simon Freakley advised his fellow bosses, “CEOs need to have a new skill set and mindset to lead their companies through the continuous waves of disruption.”

“Today’s CEO must be in a constant state of growth and reinvention, showing the courage to make decisions based on imperfect information, pivot strategies based on new insights and market forces, and never stay hostage to tried-and-true, but rapidly fraying business models. By embracing disruption, CEOs can capitalize on opportunities in their markets and completely reshape the competition.”