Geopolitical Instability and Inflation Top the List of External Risks for CEOs: Fall 2023 Fortune/Deloitte CEO Survey

NEW YORK, Nov. 13, 2023

Key Takeaways

• Most CEOs expect some level of organizational growth over the next 12 months while their outlook for the global economy, and their industry, and company performance has moderated.
• Concerns about geopolitical instability, inflation, other sources of financial/market instability, and labor/skills shortage continue while regulation surfaces as a top concern for CEOs.
  
• Generative AI adoption rates increased slightly since June, with half of CEOs having implemented Generative AI in limited production use, at scale production, or pervasive adoption.
  
• CEOs are reporting that attracting and retaining talent are drivers behind their organizations’ purpose and social impact and DEI initiatives.
  

Why it matters to CEOs
The “Fortune/Deloitte CEO Survey” tracks the perspectives and actions of CEOs from some of the world's largest and most influential companies. The survey gives key insights into CEOs' priorities, challenges, and expectations across more than 26 industries, including technology, finance and health care. Please download the full Fall 2023 survey here.

Overview
In the Fall 2023 Fortune/Deloitte CEO survey, the majority of surveyed CEOs (88%) expect some continued organizational growth over the next 12 months, while simultaneously citing a tempered outlook on the global economy, their industry, and their company performance. The CEOs surveyed noted that maintaining growth is one of the biggest challenges they face today. Further, regulation joined the top external business disruptors alongside geopolitical instability, inflation, other sources of financial/market instability, and labor skills shortage, which have remained the top disruptors since the February 2023 survey.

In such a complex global environment, CEOs may need to sift through uncertainty to identify ways to build resiliency and paths for value in the long term. A potential avenue for both short- and long-term growth includes Generative AI with its immediate practical value applications. Another avenue might include a focus on purpose and social impact initiatives for the ability to inspire workforces and recruit key talent.

Growth and outlook
CEOs continue to express tempered views on growth, with an eye on economic forces in the coming year, while balancing priorities to maintain both short- and long-term growth. Sixty-nine percent of the CEOs surveyed are optimistic or very optimistic about their company performance over the next twelve months. A decrease in optimism toward company and industry performance combined with an overall increase in pessimism, particularly towards the global economy (48% of CEOs remain pessimistic about the global economy), suggests CEOs are moderating their outlook overall.

Key disruptors
Geopolitical challenges and inflation continue to lead the list of external disruptors — both at 51% — along with other sources of financial/market instability (38%) and regulatory issues joined the top four disruptors for CEOs, at 35%, tied with labor and skills shortage. While top disruptors may inform market sentiment, surveyed CEOs report high confidence in their organizations’ ability to navigate the pressure of disruptors on their business.

Generative AI
Almost half (49%) of surveyed CEOs are experimenting with or evaluating Generative AI — similar to the June 2023 survey results (55%). More importantly, an increasing number of CEOs indicate their organization has moved to adoption in just a few months, with a 10% increase in limited production use and 6% increase in at-scale production. Further, 79% of CEOs surveyed say accelerating innovation is one of the top use cases for implementing Generative AI, and 96% are implementing or likely to implement Generative AI to increase efficiencies. As technology rapidly matures, CEOs appear to be embracing Generative AI as a tool for the future and are exploring opportunities to both create efficiencies and open new value in their organizations.

Key quotes
“While CEOs face growing complexity, uncertainty, and headwinds, they are seeking opportunities to build resiliency, drive new growth, and increase efficiencies through Generative AI while managing risk. At the same time, providing a meaningful workplace experience and attracting and retaining talent are top of mind as they balance initiatives related to purpose, social impact, climate and sustainability, and DEI.” 

— Jason Girzadas, Chief Executive Officer, Deloitte US

“CEOs have turned more pessimistic. And who can blame them? Increasing geopolitical instability in the Middle East, Europe and Asia combined with persistently high interest rates that threaten to expose the excesses of a decade and a half of free money, have everyone wondering: ‘What’s next?’.” 

— Alan Murray, Chief Executive Officer, Fortune

Hybrid work
CEOs report varying preferences for the amount of time employees work in the office and/or at client sites. When asked what the preferred number of days CEOs would like employees to work in the office and/or at client/customer site, 27% indicated that they would like employees to work in the office three days on average, while another 22% cited they preferred five days a week of in-office work.

Purpose, climate, sustainability and DEI
Attracting and retaining talent continues to drive most organizations’ strategy for purpose and social impact, while sustainability measurement and reporting are key focus areas for organizations. Seventy-seven percent of CEOs stated that a commitment to purpose and impact helps retain and attract talent. Further, CEOs continue to build DEI into their strategic priorities and goals and focus investment on talent-related efforts. Sixty percent of CEOs surveyed stated that DEI is built into their organization’s corporate strategy. On the sustainability font, 44% of CEOS indicated that they are engaging employees to take individual sustainability action in their lives. Additionally, 39% of CEOs are working to reduce emissions by suppliers and/or customers.

Survey methodology
Fielded between Oct. 3 - 11, 2023, 104 CEOs representing more than 26 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 Fall 2023 survey is the 11th edition of the “Fortune/Deloitte CEO Survey” series.

About Fortune:
Fortune upholds a legacy of award-winning writing and trusted reporting for executives who want to make business better. Independently owned, with a global perspective and digital agility, FORTUNE tells the stories of a new generation of innovators, builders, and risk takers. Online and in print, FORTUNE measures corporate performance through rigorous benchmarks, and holds companies accountable. FORTUNE creates communities by convening true thought leaders and iconoclasts – those who shape industry, commerce and society – through powerful and prestigious lists, events and conferences, such as the iconic Fortune 500, the CEO Initiative, and Most Powerful Women. For more information, visit fortune.com.

About the Chief Executive Program
Deloitte’s Chief Executive Program, part of Executive Accelerators, is dedicated to advising chief executives throughout their careers — from navigating critical points of inflection, to designing a strategic agenda, to leading through personal and organizational change. Connect with us on Twitter @DeloitteUS or on LinkedIn @Deloitte.

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.