3 priorities for chief executives in 2024

Business leaders will surely be looking to hit the ground running as we enter 2024. To assist, chief executives across the world have weighed in to highlight some of the top priorities for the year.

McKinsey has released its annual report on the mindset of global chief executives. The report collates opinions, hopes, fears, expectations, and everything in between for what the coming 12 months might have in store for chief executives. In essence, the report asks: What’s on the mind of chief executives everywhere?

1. Generative AI

From ChatGPT to applications across medicine, genetics research, manufacturing, and entertainment, the past year has seen a radical uptake in generative artificial intelligence (AI).

Indeed, 45 per cent of executive leaders are in the process of piloting generative AI tools, said Gartner, while another 10 per cent have put generative AI solutions into production. In March and April of 2023, only 15 per cent of respondents were piloting generative AI, while only 4 per cent were in production. Clearly, generative AI is catching on and often in surprising ways.

As noted by Frances Karamouzis, VP analyst at Gartner: “Generative AI is now on CEOs’ and boards’ agendas as they seek to take advantage of the transformative potential of this technology.”

2024 will be less about proof of concept and more about taking the technology to scale. “While innovators dominate headlines, it’s scalers that dominate markets,” said McKinsey.

In the coming year, it’s up to chief executives to figure out three things, said McKinsey: Which parts of the business can benefit, how to scale from one application to many, and how will the new tools reshape their industry?

2. Technology as a competitive edge

While generative AI has been attracting attention from business leaders worldwide, it’s possible that standing out from the competition will be about more than just finding the best uses of the technology – it will require looking to other new technologies.

“There’s a risk,” said McKinsey, “that paying too much attention to gen AI could set a company back on its digital transformation”.

Parsing the flashy but ultimately ineffective new technologies from those with genuine productivity promises has proven a difficult challenge for many businesses. For instance, while 90 per cent of companies have launched a kind of digital transformation, only one-third of the expected revenue gains have been realised on average.

While results are mixed, many industries have found great success in rolling out new, diverse technology programs. Finding success, said McKinsey, takes building the following six enterprise capabilities:

• Business led-digital road map
• Talent
• Operating model
• Technology
• Data
• Adoption and scaling

“You do not have to be a tech company to achieve excellence in digital and AI. Large, established companies can outcompete and capture value, but only when they are willing to commit to the hard work of rewiring their enterprise,” said McKinsey.

3. Energy transition

“The biggest capital reallocation in our lifetime.” This is how McKinsey last year referred to the ongoing global energy transition. Indeed, McKinsey projects that growing demand for net zero offerings could generate up to $12 trillion in annual sales by 2030.

Since last year, the amount of investment required has only grown as higher energy prices, supply chain pressures, economic pressures, and higher input costs have forced chief executives to focus more on short-term growth instead of long-term decarbonisation.

While these and other challenges persist, there are many reasons why now is the best time for business leaders to plan for the climate.

“Companies that take disciplined and courageous action on both resilience and sustainability have a unique opportunity: they can reposition themselves ahead of organisations that focus on just the short-term shocks, or organisations that might even step back from their sustainability commitments,” said McKinsey.

This is not to mention that climate action is increasingly important to employees and can boost job satisfaction, talent attraction, purpose alignment, productivity, and general business impact.

According to McKinsey, sustainability leaders are doing the following:

• Pushing ahead on value creation with vision and ambition.
• Integrating cost and carbon reductions.
• Creating customer partnerships to be an early winner in the market.
• Updating the portfolio to secure profitable growth.
• Building and scaling new green businesses.
• Executing at digital speed to creative competitive distance.