Arthur D. Little (ADL) recently released the 2025 edition of its ongoing CEO Insights study: “Proactively Embracing Change.” Based on in-depth conversations with global business leaders, the research reveals that CEOs are responding to today’s volatile geopolitical and economic landscape not with hesitation, but with confidence and decisive action. This Advisor, the first in a series exploring key themes from the research, examines two critical dimensions: the five strategic imperatives CEOs are using to navigate uncertainty and the seven growth areas they are prioritizing.

5 Strategic Imperatives

CEOs understand that the drivers and structure of the global economy have fundamentally changed. Thus, continuing to do business as usual is not an option. They are confident that they can seize opportunities in an era of fast-moving, unpredictable geopolitics that involves more active policies from major governments, especially the US. To best position themselves to adapt to fast-paced geopolitical change, CEOs should focus on five key areas:

1. Make bold moves. With business as usual not an option, CEOs shouldn’t be afraid to innovate around strategy and operations, moving beyond incremental change to make big bets on new markets, technologies, or business models. AI should be a major area of focus, with CEOs looking beyond incremental improvements to how it can transform both strategy and operations.

2. Focus on the positives of increased state intervention. Governments are intervening more in their economies, whether to support existing businesses or to encourage development in areas such as AI and sustainability. Either directly or through industry bodies, CEOs should be clear on how state intervention can help drive growth and should work with government to establish programs that benefit their companies and the wider economy.

3. Rebalance supply chains. The disruption to global commerce due to COVID-19 led many CEOs to begin rebalancing their supply chains. Geopolitical tensions have accelerated this trend, and CEOs should take a portfolio approach to sourcing and manufacturing to protect themselves against further shocks and disruptions. For example, European countries should look at opportunities for near-shoring operations in Africa while building up national capabilities.

4. Be ready for growth. CEOs should closely examine their current skills, capabilities, and organizational structures and improve them to ensure agility and flexibility. They should assess skills in areas such as AI and plan to fill gaps through reskilling, partnerships, or acquisitions. CEOs must also evaluate current processes and examine whether they deliver the right balance of centralized and local decision-making to target opportunities as they arise while managing risk.

5. Don’t neglect the business benefits of sustainability. Sustainability programs should be seen as a source of business advantage, rather than a compliance cost. Look at areas where ESG can reduce costs, open up revenue streams, or build new business models and partner with a wider ecosystem to deliver benefits.

CEOs have demonstrated they are ready to embrace the opportunities that geopolitical turmoil and increased state intervention bring — now they need to transform their businesses to actively target these changes through proactive, agile strategies and operations across the globe.

7 Areas for Growth

CEOs have aligned their most important growth strategies with the most important trends they foresee over the next three years. The imperative is clear: companies must optimize their internal growth engines while using M&A selectively to complement, rather than substitute for, internal growth. To outperform the market despite global volatility, CEOs must focus their organic and inorganic growth strategies on seven areas:

1. Build scenarios for multiple futures/bets. By developing scenario-based strategies for multiple possible futures, CEOs enable resilient planning and flexible decision-making, future-proofing their strategies against unpredictable market shifts while aligning internal resources efficiently across various strategic options.

2. Diversify approaches to organic growth. Rather than putting all their eggs in one basket, CEOs should look to widen the tools used for organic growth, balancing longer-term approaches (e.g., leveraging R&D) with short-term wins (e.g., through start-ups and corporate venture capital). The decision to use one instrument over another will depend on multiple factors, including product maturity, distance from core, entry barriers, deal flow, and start-up activities.

3. Institutionalize innovation for continuous differentiation. Innovation must become part of a company’s DNA (i.e., how employees think and act). CEOs must foster a culture that encourages and rewards trials and speed to market (fail, but fail fast). New product and service development can be accelerated through incubators, leveraging digitalization/AI to enhance efficiency and differentiation. R&D should be used as a tool for transformative innovations rather than incremental improvements.

4. Put customers first. Now more than ever, strategies must move from product centricity to customer centricity. Adjacencies should be explored by leveraging data analytics to anticipate and address evolving consumer needs. Long-term customer engagement and relationships can be further enhanced through investment in brand equity and hyper-personalization.

5. Scale through ecosystem collaboration. Open collaboration has never been more important. Organizations must develop the right partnerships with start-ups, universities, and industry players to bring in innovation, co-create solutions, and accelerate speed to market.

6. Balance organic and inorganic growth for agility. Ultimately, organizational success will depend on how well CEOs orchestrate the waltz between organic and inorganic growth. They should use M&A selectively to fill critical capability gaps, especially for vertical integration, while prioritizing internal capability building for long-term resilience. Companies need a clear acquire-versus-build strategy to ensure that acquisitions complement rather than disrupt organic impetus.

7. Take new approaches to M&A screening. In a volatile world experiencing rapid technology advances, CEOs need to more quickly identify, screen, and make M&A decisions, without compromising on quality. To identify new offerings and investment opportunities, CEOs should use tools like horizon scanning, smart surveys, think tanks, and trend insights. Once potential targets have been identified, technology can accelerate target screening, giving businesses deeper and more comprehensive insights into their suitability.

Building a resilient organization is the ultimate goal, and successful growth is created by those who leverage both internal strengths and external opportunities for sustained competitive advantage.