CEO Optimism Increases for Organizations and Global Economy Despite Ongoing Geopolitical Uncertainty: Winter 2024 Fortune/Deloitte CEO Survey

NEW YORK, April 3, 2024 

Key Takeaways

• Most CEOs hold an optimistic outlook regarding their companies' and industries' performance, with growing positivity towards the global economy. They anticipate a reduction in interest rates by the U.S. Federal Reserve come autumn.
• This year, CEOs expect to navigate disruption stemming from geopolitics, regulation, inflation, and various financial and market instabilities.
• CEOs report a noticeable increase in the implementation of Generative AI (GenAI) since fall 2023, a shift that could indicate an accelerated uptake of the technology. Fifty-eight percent are already implementing GenAI to automate manual tasks, up from 40% in October 2023, and 45% are using the technologies to reduce business operational costs.
  

Why it matters to CEOs

The “Fortune/Deloitte CEO Survey” monitors the viewpoints and strategies of CEOs representing some of the world's largest and most influential companies. This survey offers valuable insights into the priorities, obstacles, and anticipations of CEOs spanning over 20 industries, encompassing technology, finance, and health care. You can access the complete survey here.

Overview

The winter 2024 survey reveals that most CEOs summarize 2023 as "challenging," a sentiment that has persisted as the top descriptor for four consecutive years. Looking ahead, these CEOs express significantly heightened optimism regarding both their organizations and the global economy over the next 12 months. Geopolitical instability emerges as the primary anticipated external disruptor for 65% of CEOs surveyed, followed by concerns about regulation, inflation, financial/market instability, and talent shortages.

Despite their positive outlook for their company performance, a considerable portion of CEOs (45%) are prioritizing measures to optimize operating costs. To achieve this, they are increasingly turning to Generative AI (GenAI) and other emerging technologies. The majority of CEOs (57%) intend to integrate new technologies into their business models to uncover growth opportunities, with a significant portion (56%) already leveraging GenAI to enhance efficiency. Dive deeper into the latest insights from the “Fortune/Deloitte CEO Survey” for further highlights.

CEO Outlook - Economy, Company, Industry

CEOs exhibit growing optimism not only towards their organizations but also the global economy, marking a significant shift from fall 2023. Among surveyed CEOs, 27% express optimism about the global economy, a substantial increase from 7% in fall 2023 and 12% a year ago, while pessimism has dwindled to 24% from 76% 18 months ago. Additionally, 22% report high optimism regarding their organizations, with 46% prioritizing new services and products over the next year. CEOs are focusing on cost optimization for growth and plan to integrate new technologies into their business models, despite moderating concerns about external factors like inflation, and other sources of financial and market instability. Most respondents anticipate the U.S. Federal Reserve to reduce interest rates by the third quarter of this year.

Key disruptors

Once again, geopolitical instability emerges as the top external disruptor for CEOs, with regulation following closely behind, while worries about inflation show a decline. Geopolitical instability is the foremost external factor likely to impact business strategies in the coming year, marking a 14% increase since the fall survey. Inflation, which was previously tied with geopolitical instability at 51% in the fall, has now dropped to 27%, along with other sources of financial/market instability. Regulation remains a significant concern for CEOs, standing at 36%. Concerns regarding labor and skills shortages continue to diminish, nearly halving from levels seen a year ago to 25%.

Generative AI

Since the fall of 2023, there has been a marked increase in the adoption of Generative AI (GenAI), transitioning from consideration to active implementation. This trend suggests a hastened acceptance of technology. Over half (56%) of surveyed CEOs prioritize enhanced efficiency/productivity and cost reduction as the primary benefits expected from GenAI. Furthermore, 58% have already implemented GenAI to streamline manual processes, a significant rise from 40% in October 2023, with 45% leveraging these advancements to curtail operational expenses.

Succession

According to surveyed CEOs, most CEOs and boards actively engage in succession planning, with CEOs playing a significant role throughout the process, particularly in pipeline development and succession plan formulation. While 42% of CEOs indicate their boards have established a clear process, almost 28% disagreed that their organizations have a strong bench of viable/qualified CEO candidates. A significant 84% of CEOs participate in candidate identification, with 66% emphasizing the importance of candidates' past achievements in the selection process.

CEO reflections

For the fourth consecutive year, “challenging” maintains its position at the forefront when reflecting on the preceding year. In response to summarizing 2023, most CEOs opt for “challenging,” closely trailed by “volatile,” echoing trends observed in the surveys conducted during the winters of 2023 and 2022. This trend isn't unexpected, considering that most CEOs cite “geopolitical uncertainty” as their biggest challenge, followed by concerns regarding “growth,” the “regulatory landscape,” “workforce engagement,” and “macro uncertainty.” One CEO articulates their struggle as “Navigating the complexities of geopolitical and economic uncertainty to propel growth forward.” Looking ahead, CEOs view artificial intelligence as the next most impactful factor on their business and are actively considering its applications and potential risks.

Key quotes

CEOs are carefully balancing near-term growth and long-term transformation priorities. Though in its early days, Generative AI presents an important opportunity to increase efficiencies, optimize costs, and accelerate innovation. At the same time, they are cautiously optimistic about the global economy, its impact on their industry and the performance of their organizations.

— Jason Girzadas, CEO, Deloitte US

In spite of continuing concerns about geopolitical tensions, CEOs have grown considerably more optimistic about the economy than they were late last year. And the majority see AI as a major area of focus.

— Alan Murray, Chief Executive Officer, Fortune

Survey methodology

Fielded Feb. 13-23, 107 CEOs representing more than 20 different industries shared their perspectives, expectations, thoughts and priorities for the next 12 months. Those leaders surveyed include Fortune 500 CEOs, Global 500 CEOs, and select CEOs in the global Fortune community. The winter survey is the 12th edition of the “Fortune/Deloitte CEO Survey” series.

About Fortune

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About Deloitte

Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500^® and more than 8,500 U.S.-based private companies. At Deloitte, we strive to live our purpose of making an impact that matters by creating trust and confidence in a more equitable society. We leverage our unique blend of business acumen, command of technology, and strategic technology alliances to advise our clients across industries as they build their future. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Bringing more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte's approximately 457,000 people worldwide connect for impact at www.deloitte.com.