More CEOs anticipate an economic boom than stagnation in 2021 and 2022, according to a recent survey of CEOs and Senior Executives by Gartner. Over one-third of respondents polled anticipate returning to or exceeding 2019 revenue levels as early as this year.
“CEOs’ top priorities for 2021 show confidence,” said Mark Raskino, distinguished research vice president at Gartner. “Over half report growth as their primary focus and see opportunity on the other side of the crisis, followed by technology change and corporate action.
“This year, all leaders will be working hard to decode what the post-pandemic world looks like and redeveloping mid- to long-range business strategy accordingly. In most cases, that will uncover a round of new structural changes to capability, location, products and business models.”
Here are the key findings of the report:
CEOs Prioritize “Digital”
Technology-related change was the second-highest priority for CEOs. When asked about their organization’s top five strategic business priorities for the next two years, respondents gave answers in their own words. CEOs’ responses increasingly included the simple word “digital,” cited by one in five CEOs in this year’s survey. Digital capabilities was also the only category in which CEOs intended to increase investment in 2021.
When it comes to specific technologies, CEOs see artificial intelligence (AI) as the most industry-impactful technology. Over 30% of respondents said that quantum computing will be highly relevant to their long-range business plans but are still not quite sure how.
Blockchain, 5G, AI and quantum computing are at the forefront of an emerging economic race between the U.S. and China, with one-third of CEOs believing that evolving trade disputes between the two nations over these technologies are a significant concern for their businesses.
Expect a Wave of Mergers and Acquisitions (M&A)
Within CEOs’ third strategic business priority of “corporate action,” M&As were the most mentioned item, rising 75% year-over-year. This shows that CEOs and senior executives seeking advantage from a cyclical downturn are going shopping for structural inorganic growth.
There was a significant reduction in mentions of “sales revenue” within the growth priority category and a significant increase in mentions of “new markets” across different industries and company sizes, suggesting that CEOs are finding it hard to obtain simple incremental sales revenue growth using the strategies that have served them well in the past.
“Tech acquisitions can bolster digital business progress, while also providing access to potential fast-growth market sectors,” said Mr. Raskino.
CEOs Acknowledge Societal Impacts on Business
Over 80% of CEOs expect enduring societal behavior change arising from the pandemic, such as a permanent shift to hybrid work. Shifts in customer behavior are expected as well: The biggest concern among CEOs is that customer demand will be constrained, particularly in industries such as travel, and that consumers and chief financial officers (CFOs) alike will hold back on related expenditures.
“More use of digital technology and the demand for digital channel flexibility are also within the top three anticipated shifts in customer behavior. This suggests that continuing to improve the way customers are served digitally will be vital,” said Kristin Moyer, distinguished research vice president at Gartner.
As key matters of sustainability and social justice rise to the foreground of public consciousness in many countries, 39% of CEOs said that taking an active social justice stance is good for business and that their employees are mostly of one mind. This leaves 61% who are tentative around such subjects – the majority are still not confident and comfortable navigating the business through this area of change. In addition, nearly half of CEOs (45%) said climate change mitigation is having a significant impact on their businesses.