A recent Gartner survey of CEOs and senior executives revealed significant shifts in their thinking regarding people, purpose, prices and productivity in 2022, specifically on matters of sustainability, workforce and inflation. Notably, for the first time ever, CEOs place environmental sustainability in their top-10 business priorities.
Workforce issues like talent retention, moved up in priority for the second year in a row, only slightly behind technology-related issues such as digitalisation and cybersecurity, and significantly ahead of financial issues like profitability and cash-flow.
The survey was conducted July to December 2021 among over 400 CEOs and other senior business executives in North America, EMEA and APAC across different industries, revenue and company sizes.
Commenting on the survey, Gartner research VP, Mark Raskino said: “2022 is the year CEO perspectives truly changed. COVID gradually brought several deep societal trends like changing the way we work and the fragility of long-distance global supply chains to the surface. More recently, the Russian invasion of Ukraine is amplifying macroeconomic factors like inflation that CEOs must now deal with. Simultaneously, however, CEOs’ digital business ambition continues to rise, unabated by COVID and related crises.”
Metaverse Doesn’t Matter to Most CEOs
Artificial intelligence (AI) is the most impactful new technology among CEOs for the third year in a row. Conversely, 63% of CEOs see the metaverse as either ‘not applicable’ or ‘very unlikely’ to be a key technology for their business.
“In the past, some CEOs embraced new-technology ideas perhaps a little too enthusiastically,” said Raskino. “In the case of the metaverse, however, it’s doubtful the respondents who think it very likely to be a key technology for their business are as confident as they appear to be.
“The remaining list of impactful technologies reminds us that ‘new’ is in the eye of the beholder. Neither digitalisation nor e-commerce, in second and fourth place respectively, is very new. Yet these are technologies that many business leaders still perceive as novel and disruptive in their situations.”
Environment Enter Top-10 Business Priorities for CEOs
For the first time, CEOs placed environmental sustainability in their top-10 strategic business priorities, coming in at 8th place – a significant jump from 14th place in 2019.
“As business leaders feel the pressure from key stakeholders to do more on environmental sustainability, they are now treating the needed changes as opportunities to drive business efficiency and revenue growth,” said Raskino.
74% of CEOs agreed that increasing environmental, social and governance (ESG) efforts attracts investors toward their companies. Of the 80% of CEOs who intend to invest in new or improved products this year and next, environmental sustainability was cited as the third-largest driver, just behind functional performance and general quality. Sustainability also appears as a competitive differentiator in 2022 and 2023 – notably on the same level as brand trust among respondents.
CEOs View Inflation as Persistent Issue
62% of CEOs see general price inflation as a persistent or long-term issue. Their top response to inflation is to raise prices (51%), rather than responding with productivity and efficiency (22%). In fact, productivity and efficiency aren’t even in the top-10 business priorities for CEOs this year.
“Clearly, there is some complacency around inflation impact,” added Raskino. “When asked about the top-two sources of competitive differentiation, only 3% of CEOs mentioned price. Gartner expects that may change quite quickly as inflation continues to bite.”