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Directors play a crucial role in navigating the ever-changing business landscape. Governing through immediate challenges, such as inflation, margin pressure, regulation and geopolitical unrest while adapting to mega trends including climate change, technological disruption and social stability can be difficult, but also an opportunity.
Our latest CEO survey highlights the need for business reinvention. Our survey found that 45% of global business leaders believe their companies will not be economically viable in the next decade. Are CEOs in New Zealand acting fast enough to transform their business models? As Directors, are we asking the right questions and providing the right support to executive teams as they embark on the path of transformation?
During our recent NED programme events in Auckland and Christhurch, these themes alongside those of agility and relevance in a dynamic business environment were discussed. Our panellists shed light on important insights and strategies for Directors to consider as they govern their organisations through transformation.
Below, we have provided an overview of the key takeaways from the event, we hope you find these valuable.
Transformation challenges:
Transforming organisations while keeping operations running smoothly is no easy feat. The need for long-term commitment from the Board, as well as patience and a willingness to learn from mistakes is critical to success. Transformations occurring incrementally rather than at scale, can help mitigate risk and alleviate pressure on the organisation. Recognition of challenges involved in transformation is crucial for Directors to effectively govern as their organisations move through the process, ensuring that operations continue to thrive while change is implemented.
In our survey, 57% of local CEO’s highlighted competing operational concerns as inhibiting their ability to reinvent their business model.
Source: PwC CEO Survey 2024
Stakeholder alignment:
Alignment is key when transforming organisations. Directors need to ensure they are aligned with their management teams and that vision is effectively communicated to all stakeholders. People are essential to any transformation, including the talent within the organisation (management and staff), the customer (ensuring their needs are prioritised and met throughout the process), and the board (ensuring alignment and providing valuable skills to the transformation).
The increasing influence of AI:
The increasing influence of artificial intelligence (AI) cannot be ignored. Organisations must reinvent their business models and consider their strategies, products, and channels in order to adapt to this evolving landscape. By embracing AI and leveraging its potential, organisations can position themselves for long-term success.
64% of local business leaders believe that GenAI will improve their own efficiency at work and 68% expect it to bring greater efficiency for their employees. Fifty-eight per cent also think that GenAI will enhance the quality of their company's products and services.
Source: PwC CEO Survey 2024
Local CEOs also anticipate significant impacts on their workforce, with 61% predicting that their employees will need to learn new skills due to advancements in GenAI.
Source: PwC CEO Survey 2024
Board-CEO collaboration:
Collaboration between the Board and the CEO is essential for organisational success. The panellists highlighted the importance of mutual respect, radical candour, and regular strategy-focused sessions in creating an environment of collaboration and confidence. By fostering open and honest communication, Directors can ensure that the collective expertise of the Board and the CEO is harnessed for long term success.
Embracing uncertainty and imperfections:
In this rapidly changing business environment, it is crucial for organisations to be willing to experiment and make changes as needed. It is important for Boards to embrace uncertainty, imperfection and maintain agility. Adapting strategic plans alongside the executive team every 90 days for example, can ensure that organisations remain responsive and adaptable. Also, consider having a contingency fund under the control of the Board for unexpected costs. By embracing uncertainty imperfections and being open to change, Directors can foster a culture of innovation and agility.
Our NED programme events offered valuable insights to help Directors navigate the challenges of governing in a dynamic business environment. We hope that these themes resonate with you and provide valuable guidance for the future of your organisation.
Check out our short video below from our Auckland event featuring Mini Prasad, Partner, PwC New Zealand and Scott Pickering, Non-Executive Director of Insurance Australia Group and IAG New Zealand, and former CEO of ACC who provided an overview of some of the key discussion points from the event.
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NED Launch
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