How’s this for pessimism: Almost a third of this country’s CEOs question whether their companies will still be viable 10 years from now.
PricewaterhouseCoopers LLC will publish its annual global CEO survey on Tuesday, and a preview of the study showed domestic executives are in a funk, compared with their global peers. Just 25 per cent of Canadian chief executives expect the economy to improve this year, compared with 44 per cent of international business leaders.
PwC’s survey found 32 per cent of CEOs here expect their business will not be around in a decade, up from 24 per cent of those surveyed last year. The report drew on interviews with 4,700 executives in 105 countries, including 114 domestic CEOs.
America’s economy is creating new businesses at a feverish pace
The silver lining in these corporate clouds: In an interview on Friday, PwC Canada chief executive officer Nicolas Marcoux said fear and a healthy dose of paranoia are motivating CEOs to reinvent their companies, with an urgency not found in other countries.
“Canadian companies tend to be smaller than their global rivals, and their CEOs understand this means they are at greater risk from disruption,” Mr. Marcoux said. As a result, he said, executives here are quicker to embrace new management approaches and new technology, such as artificial intelligence, “to better equip their companies to accelerate change.”
While every company seems to be talking about implementing AI, PwC’s survey showed domestic CEOs are more likely to be actually putting the technology to use. Globally, 32 per cent of CEOs said their companies have begun using generative AI – systems that can learn data patterns – while in Canada, 36 per cent of businesses are doing so.
“AI was born out of research in Toronto and Montreal, and that’s translated into early adoption,” Mr. Marcoux said.
PwC’s research found nearly two-thirds of domestic CEOs expect AI to “significantly change the way their company creates, delivers and captures value“ over time. In Canada, 29 per cent of CEOs expected AI to begin boosting revenues in the next 12 months.
Mr. Marcoux, a tireless networker who meets with roughly 400 clients each year, said early adopters are finding that AI projects improve performance in virtually every sector.
There are mining companies using AI to predict better maintenance schedules on their machinery, improving productivity and safety. Retailers are using the technology to better understand how consumers will react to changes in prices. “AI can help a grocery store determine the optimum price for a bottle of ketchup,” Mr. Marcoux said.
PwC’s survey also found that concerns that AI will lead to robots replacing workers are misguided, in the short term. Only 14 per cent of Canadian CEOs expect rolling out the technology will lead to a reduction in their head counts in the next year. Global peers have a different take, with 25 per cent of international CEOs predicting that introducing new technology will allow them to cut the size of their work force in the next 12 months.
The challenge, or opportunity, of AI comes from having leaders recognize the potential of the technology across a business, according to PwC and other consulting firms. Mr. Marcoux said that to be successful, AI projects need support from an entire executive team, rather than just the chief technology officer.
It will take a new approach to leadership, or a new generation of CEOs, to embrace fully the potential of the brave new world of data, according to a CEO survey published last month by consulting firm Teneo.
“One in four CEOs report that they do not currently have the right talent to enable their company’s adoption of AI,” said Teneo’s study, which came from conversations with 260 companies around the world.
“CEOs and investors believe that in order to succeed, the next generation of CEOs will need to possess a combination of traditional leadership traits and data-tech savviness,” the Teneo report said.
Let’s hope that the next tech-savvy generation will be a little more optimistic about their companies’ chances of surviving for more than a decade.