CEO Insights 2024: Cautious Strategies & Increased Investment in Growth

Posted May 16, 2024 | Leadership |
CEO Insights 2024: Navigating Growth with Caution

As part of its ongoing series of flagship CEO Insights research studies, Arthur D. Little (ADL) recently published its 2024 edition: “Positive in an Uncertain World: Confident CEOs Reskill Companies for AI-Driven Growth.” In this Advisor, we explore two key trends revealed through research analysis: while cautious, many CEOs plan to continue their existing growth strategies and are increasing their growth investments.

A Cautious Approach to Growth Strategies

Driven by current market uncertainty, CEOs plan to continue their existing growth strategies, with overall marginal differences between those used for the past three years and the next three years (see Figure 1). The only areas that see a greater focus are diversification (up 14% compared to 2023) and fighting price wars (up 13%), both of which look to be a reaction to economic conditions and more closely fought competition. Providing disruptive offerings (down 9%) and targeting new geographies (down 11%) are being de-prioritized compared to 2023 as CEOs focus on maximizing existing strategies over the short to medium-term.

Figure 1. Most important growth strategies, leaders vs. laggards
Figure 1. Most important growth strategies, leaders vs. laggards

The future focus on the core business is particularly strong among those companies that see themselves as market leaders, ahead of entering new geographies and cost optimization. For those in the middle of the pack, the focus is shifting to new sales channels (up 18%) and new client segments, showing that they are searching for new opportunities to grow. Among respondents, 38% of laggards are looking to diversify their revenues (doubling from 19% over the past three years), demonstrating a shift away from a core business focus in order to unlock growth.

“Through entering new markets, creating fresh goods and services, and forming clever alliances, we are broadening the scope of our business activities.” — CEO, financial services

Increasing Investments in Growth

The turmoil of the past 12 months has led some CEOs to recalibrate their growth ambitions (see Figure 2). While a similar percentage (33% versus 30% in 2023) are adopting offensive strategies to achieve faster-than-market growth, the number focusing on cautious strategies (achieve market growth) dropped by 7% as more embraced defensive strategies (aiming for slower-than-market growth). This increase in defensive strategies could also indicate a belief that AI can reduce barriers to entry and bring disruption and new players into existing markets. Larger companies are more likely to be pushing for above-average growth, with 45% adopting offensive strategies compared to 26% of smaller organizations.

Figure 2. Growth ambitions and change in investment levels
Figure 2. Growth ambitions and change in investment levels

What is striking is that across all three groups, CEOs are willing to increase their investments in growth, perhaps pointing to greater funds being required than initially thought necessary to achieve success. For example, 92% of defensive CEOs expect to increase or keep their growth investment constant.

“We recognize the importance of building strong partnerships and collaborations. In times of uncertainty, having a network of reliable partners can provide additional support and resources.” — CEO, healthcare

About The Author
Francesco Marsella
Francesco Marsella is a Partner at Arthur D. Little (ADL), based in the Rome office, where he leads the marketing and sales center of competence for both the Automotive & Manufacturing Goods and the Strategy & Organization practices. Mr. Marsella has served clients throughout Europe, supporting leading automotive OEMs on strategic and growth-related projects and large-business transformation programs. His expertise ranges from customer… Read More
Petter Kilefors
Petter Kilefors is a Managing Partner at Arthur D. Little (ADL), based in the Nordic region, and a member of ADL’s Strategy & Organization practice. He also covers private equity within ADL’s Telecommunications, Information Technology, Media & Electronics (TIME); Health Care & Life Sciences; and Public Services practices. Mr. Kilefors focuses on strategy and organization, advice to private equity and industrial investors pre- and… Read More
Maximilian Scherr
Maximilian Scherr is a Partner at Arthur D. Little (ADL), where he leads ADL’s Strategy & Organization and Technology & Innovation Management practices in Vienna. Additionally, he is responsible for ADL’s environmental, social, and governance (ESG)/energy transition work in Austria, particularly for industrial companies, and is a regular speaker on innovation and ESG topics. Mr. Scherr helps clients with growth and group strategies,… Read More
Ralf Baron
Ralf Baron is a Partner at Arthur D. Little (ADL), based in Frankfurt, and the Global Practice Manager of ADL’s Travel & Transportation practice. He has more than 25 years’ experience in management consulting and has worked in the mobility sector for more than 20 years. Mr. Baron advises leading players in the mobility industry and ecosystem on strategic orientation and performance improvement, as well as organizational change and… Read More
Satya Easwaran
Satya Easwaran is a Partner at Arthur D. Little (ADL) and a member of ADL’s Strategy & Organization practice, based in Mumbai. Mr. Easwaran has over 25 years’ experience using emerging digital technologies to enact business and operations transformations. Previously, he held various senior-level roles, including Country Head and Managing Director at Wipro, Partner and Head of Business Consulting at KPMG, and Managing Director at Accenture.… Read More