According to a Deloitte report, CEOs see 2022 with optimism and a bit of uncertainty. Leaders are balancing between being “hopeful” or “uncertain” about the coming year in the 2022 CEO Survey. While CEOs expect business growth will remain strong, they continue to point out challenges such as talent and the ongoing pandemic. While CEOs surveyed remain positive about their growth expectations, they are cautiously optimistic that the organizations have adapted and survived the “new normal” created by COVID-19.Nearly two-thirds (32%) of CEOs believe their company’s growth will be “very strong” or’strong’ over the next twelve months. Here are a few more findings:
- Inflation and financial market instability have been a major concern. 36% of CEOs identified it as one of the top three factors that could impact or disrupt their business strategy for 2022.
- 78% of CEOs say supply chain disruptions have led to increases in business costs and margin impacts. 45% claim that the supply chain has caused revenue loss and customer service problems.
- Nearly half of those surveyed said that talent is their biggest concern.
- Three-quarters of CEOs don’t believe the business effects from the pandemic will end in the near future. However, 60% of them expect the effects of the pandemic to end by the middle of 2022 or the end of 2022.
What is it important to CEOs?175 CEOs from 15 industries participated in the Winter 2022 Fortune/Deloitte Chief Executive Officer Survey. The survey was conducted between January 4-12, 2022. They shared their views, expectations, thoughts and priorities for the next twelve months. The survey included Fortune 500 CEOs and Global 500 CEOs as well as select Fortune 500 CEOs.
2022: An year marked by deja vu?
Nearly one-third of respondents to the Fall 2021 survey asked when the pandemic’s effects on business would end. 11% stated that they don’t believe the effects of COVID-19 will end anytime soon, 23% by mid-2022, 35% by 2022.
The Fall 2021 survey’s timing coincided with the rise in the Delta variant in September 2021. While the current survey was conducted at the beginning January 2022, during high disruption caused by the Omicron variant, the survey was completed at the beginning of 2022. Yet, expectations of CEOs are virtually unchanged from four months back. As with their September predictions, 88% of CEOs believe that the effects of the pandemic on business are already greater than for their company. Just under a third of them say that they won’t be over in “foreseeable future”. Around 20% predict that the pandemic will end by 2022, while 40% believe it will end by 2022.
The Fall 2021 survey found that almost two-thirds (63%) of CEOs expect their company’s growth to remain the same. A third of respondents expect moderate growth while a small fraction of 2% anticipate “weak” growth.
CEOs have changed their views on market and financial instability. The current survey found that 36% of CEOs viewed this issue as a top concern. This is compared to 13% for Fall 2021. This figure is 62% higher for CEOs working in the Financial Services sector, where it’s the most prominent issue.
Talent is a top concern
In June 2021, CEOs were asked about their biggest challenge. A quarter of respondents pointed out that it was related to talent. The alignment was stronger when the same question was asked in September 2021. Nearly half of respondents named talent. This emphasis is still evident today, with almost half of CEOs referring to workforce and talent as the greatest challenges they face in their roles.
CEOs specifically referred to the challenges in combating COVID fatigue with their team members, finding and keeping top talent, and adapting to new work paradigms. 71% of CEOs cited labor/skills shortage among the top three issues that they expected to impact or disrupt their business strategy in the next 12 month.
Supply chain disruptions are common
Only 33% of CEOs said that the pandemic had impacted their supply chain. Supply chain has become a significant challenge for CEOs in recent years. Although less than 10% of CEOs believe the problems have caused customer attrition in some cases, almost 80% of them point to increased costs and margin impacts, 58% point towards longer fulfillment cycles and 45% point to revenue loss/customer service issues.
It’s not surprising that CEOs in the retail and consumer products industries report higher levels of disruption than their peers. 96% of respondents say their companies have had higher costs of doing business and margin impact, 88% claim longer fulfillment cycles and 71% report revenue losses/customer service problems.
Virtually all CEOs say they intend to act on their supply chain in the next 12 months. Nearly half of CEOs plan to alter their profit/pricing model and almost half plan to increase their supply chain ecosystem by partnering with more partners in the next 12 months. Only 47% of CEOs surveyed said they plan to increase sustainability and climate change initiatives such as green electricity as part of their supply-chain-related actions.
Perspectives on trust
Trust is the cornerstone of any multi-stakeholder relationship. It’s the basis for a mutually beneficial relationship between an organization, its stakeholders and the individual and institutional levels. Respondents were asked to identify the top three areas where their company has problems. 41% pointed to diversity, equity and inclusion while 30% pointed to employee experience. These two topics will be revisited in the Summer 2022 survey edition in order to see how CEO perspectives have changed.
Leaning on their leadership groups
How can CEOs rely on their leadership team to help them navigate the constant complexities and uncertainty in their internal and external environments? We asked CEOs to rank the importance of various roles in their personal success as CEOs. The chief financial officer is ranked the most important by two-thirds of CEOs surveyed. 55% rank business unit/regional leadership as the most important. Chief talent/HR officers are not far behind. Chief financial officers are ranked higher by CEOs from countries other than the United States than the chief talent/HR officer. Compared to their U.S.-based counterparts, non-U.S. CEOs also appear to rank the chief talent/HR officer, board directors, the chief strategy officer, and the chief legal counsel higher in importance, and the chief operations officer and the chief information/technology officer lower in importance.
Check out the full report here: https://www2.deloitte.com/us/en/pages/chief-executive-officer/articles/ceo-survey.html