CEOs must focus on developing 'geopolitical muscle' for informed decision-making amidst global uncertainties.
Leaders should prioritize building transformative capabilities, fostering innovation, and leveraging data analytics and AI for sustainable growth.
Deep dives
Challenges for CEOs Amidst Global Uncertainty
CEOs face mounting challenges in the increasingly complex business landscape, with geopolitical tensions taking center stage as a critical concern. The fragmentation of global connections and the rise of competing interests among major economies like the US, Europe, and China present significant hurdles. Additionally, the rapid advancements in generative AI (JNI) necessitate CEOs to strategically harness its potential for business growth. The imperative for leaders is to embrace fundamental organizational changes, foster innovation, and effectively scale technological transformations to remain competitive amidst global uncertainties.
Navigating Geopolitical Risk and Climate Transition
Geopolitical risks pose a significant threat to international companies, urging CEOs to develop both 'geopolitical muscle' and 'bone' for informed decision-making and adaptability. Furthermore, the transition to a net-zero economy demands strategic action from leaders to address emissions reduction, energy affordability, security, and industrial competitiveness. With the urgent need for carbon abatement and technological advancements, financing plays a vital role in driving sustainable solutions. Executives are advised to frame choices around these challenges to align with business growth and capitalize on the vast opportunities in the green technology sector.
Cultivating Growth and Empowering Middle Managers
Sustaining growth and innovation in a volatile business environment requires CEOs to foster a culture of growth and leverage core business strengths for incremental growth opportunities. Investing in innovation excellence and leveraging data analytics and AI capabilities are pivotal for driving organizational success. Prioritizing middle managers by empowering them with coaching responsibilities and aligning them with change initiatives enhances team performance and organizational resilience. To outperform peers consistently, leaders must prioritize building transformative capabilities and superpowers that enable them to compete effectively and drive sustainable growth.
Over the past several years, CEOs have faced mounting uncertainty–and 2024 is proving no exception. On this episode of The McKinsey Podcast, Homayoun Hatami, McKinsey's managing partner for client capabilities, and Liz Hilton Segel, McKinsey's chief client officer, speak with global editorial director Lucia Rahilly about what matters most, amid serial crisis and disruption, and where leaders should focus their energies to enable their organizations to thrive.