Three bold moves Australia’s CEOs can make to capture new value

The pressure for businesses to reinvent is at or near a 25-year high according to PwC’s Value In Motion research. 

The good news is our research also shows a staggering AUD$11.1 trillion (USD$7.1 trillion) in value will move between companies this year as the global economy reconfigures towards domains of growth.

Here are three bold moves Australia’s CEOs can make to capture new value:

Australia’s CEOs appear confident about their timeline for reinvention, but at what risk? Almost three quarters (74%) of surveyed CEOs believe they’ll be economically viable in 10 years’ time without reinvention (compared with just 55% of their global counterparts). 

However, when organisations do undertake significant action, the pace is slow.

Yet the case for reinvention is strong. Our research uncovered a strong link between the number of reinvention actions companies have taken in the past five years and the profit margins they achieved. Bold decision makers are already moving fast to rethink how their company creates, delivers and captures value. For everyone else, now is the time to act.

In the artificial intelligence (AI) era, trust is an enabler of change. According to our CEO Survey, only a third of Australia’s surveyed leaders expressed a high degree of trust in AI, and yet the numbers speak for themselves. 

The global economy could be nearly 15% bigger than expected in 2035 if AI delivers a jolt to productivity on par with the productivity booms of the industrial revolutions in the past, according to our research.

Globally, AI adoption has already delivered an increase in revenue (32%) and profitability (34%) in the past 12 months, while a comprehensive nine in ten surveyed CEOs in Australia say AI adoption is important to achieving their company’s strategy in the next three to five years.

To secure a sizeable AI dividend, CEOs must build trust in AI and systematically integrate it into their business strategies.

By 2030, two thirds of global economic activity will take place within one third of ‘ecosystem domains’. As disruptions such as AI and climate change blur industry boundaries, top-performing global companies are turning to ecosystem strategies. In fact, we found organisations embracing ecosystems and making mutually reinforcing investments enjoyed a performance premium worth more than 13 times that of their peers.

In other words, when boundaries lower, profits rise.

The task for Australia’s CEOs? Establish an ecosystem mindset by investing in change management and expand your focus by eliminating existing boundaries. Conduct an in-depth analysis of your organisation’s current capabilities before seeking out the right partners, beyond traditional industry boundaries, to boost your organisation’s value.

More than half of companies on the Fortune 500 back in 2000 have been acquired or no longer exist. Today’s CEOs are faced with not one but two once-in-a-century economic shifts (AI-fuelled productivity growth and climate constraints), and so they must act now to capture value for the future.