With the stock market at record levels, technology fever running high, and the US economy outperforming most others around the world, one might think the boom times of the 1990s are making a comeback. But the underlying business conditions companies face today couldn’t be more different.

Many of the forces that drove corporate growth during the ’90s and well into this century — disinflation, low capital costs, deregulation, free trade, labor mobility, and geopolitical stability, among them — have reversed course or are in jeopardy.

Rarely has the business environment appeared so promising and uncertain at the same time. Today’s CEOs don’t have the wind at their back — they are traveling directly into it.

Top CEO concerns — growth, risks, and market shifts

In 2024, the Oliver Wyman Forum partnered with the New York Stock Exchange to assess the attitudes of CEOs of NYSE-listed companies. The biggest concern, shared by 54% of those surveyed, was the possibility of government interference in the economy via regulation, protectionism, and industrial policy — a sea change after decades of deregulation, free trade, and laissez-faire supremacy. Next up on the list of worries, at 51%, is the combination of volatile inflation and higher interest rates. The third most significant concern was geopolitical instability, cited by 37% of chief executives.

To generate “alpha,” or managerial outperformance, in the years ahead, CEOs will need to balance growth and efficiency objectives, revamp supply chains to manage global risks, modernize workforce strategies, and harmonize competing internal and external priorities in an era of technological, demographic, and social tumult.

The main priority among the CEOs in our survey was growth. In the retail and consumer goods sector, not every company has the same prioritization or will pursue growth similarly. However, companies should understand how some of their major trading partners, customers, and vendors think about growth — and how growth in the consumer sector might look different than in other industries.

Exhibit: By the numbers — what CEOs are seeing and doing

Source: Oliver Wyman Forum x NYSE CEO Survey 2024, Oliver Wyman Forum analysis

CEOs accelerate strategic growth in an uncertain economy

Many of the surveyed CEOs are pursuing a new growth agenda tailored for these times. Three-quarters said they see significant strategic opportunities on the horizon despite the uncertainty, including mergers and acquisitions and disruptive new business models. And 71% of CEOs are optimistic about how rapidly changing customer demographics and preferences could fuel growth.

But the optimism is tempered. CEOs can’t toggle between “risk on” and “risk off” in an era of higher-for-longer interest rates and rapid innovation — they must drive growth and value simultaneously. That explains why many chief executives cited organic investment in new revenue streams as among their top three priorities, capital efficiency and cash flow management — 55% in each case. As a point of comparison, consumer goods CEOs also cited capital efficiency and cash flow management as among their top priorities. Still, cost reduction and revenue drivers rounded out the remainder.

That said, CEOs are still pushing harder for growth. Twenty-nine percent rated organic investment in new revenue streams as their number one priority, compared with 20% who cited capital efficiency and cash flow management.

AI helps drive growth for CEOs in a changing market

Artificial intelligence (AI) is the clearest example of the new growth agenda in practice. The overwhelming consensus among CEOs was that AI is the best way to focus on revenue and cost simultaneously.

All of the CEOs of consumer goods companies we surveyed said they consider AI an opportunity for their business rather than a risk. They cited a combination of goals: more than 80% said they are investing in AI for operational efficiency and customer insight generation, while 91% said they are investing to boost workforce productivity.

The spoils of AI won’t be distributed equally. However, scale is a big differentiator, larger companies have the deep pockets needed to make transformational bets, while smaller companies are looking more to build capabilities.

One major concern for many CEOs is the fear of inaction. In fact, over 40% of CEOs identified the risk of not moving quickly enough on AI and getting left behind by competitors as a top priority.

Geopolitical risks and economic security reshape business strategy

Governments around the world are prioritizing economic security more than they have in the past several decades, imposing tariffs and launching industrial policy initiatives such as the Inflation Reduction Act. That forces CEOs to look for new ways to win on tilted playing fields. Fully 86% of leaders of large and midsized companies said they plan to take action in the next year or two to address geopolitical stability, protectionism, and government industrial policies.

Regional blocs are gaining prominence as globalization evolves. Some 60% of CEOs said they plan to reduce exposure to higher-risk regions in the next year or two, primarily to address geopolitical uncertainty, tariffs, and industrial policies. The figure for those in consumer goods was a bit higher at 67%.

A little over a third (38%) of all CEOs said they are regionalizing their operations and developing local supply chains. Only 16% said they plan to restore their operations domestically, showing that globalization is not in retreat but being reimagined for a new age. Perhaps as expected, the figure within consumer goods is higher, at 33% of those CEOs surveyed.

The belief that geopolitical factors and crises are now a permanent feature of the business environment leads CEOs to bolster their companies’ business continuity and crisis management playbooks. They also empower local and regional management teams to increase agility and respond to conditions on the ground.

Driving workforce performance to boost productivity and growth

Today’s everything-everywhere-all-at-once environment presents challenges for workforce management as well. The pandemic unleashed the Great Resignation and the related “quiet quitting” phenomenon, forcing leaders to rethink major elements of their talent strategies. Now, generative AI is already proving to be disruptive.

CEOs recognize that companies with flexible operating models are best prepared to navigate accelerating business conditions. Some 59% said their top workforce priority is to break down business silos to create a more unified franchise. For those consumer goods CEOs surveyed, an incredible 91% cited this as a top workforce priority.

To mitigate employee concerns about AI-related job losses, 31% of all the chief executives we surveyed said they are placing a priority on investing to fill in critical skills gaps and reskilling the workforce more broadly, and an equal number said they are upskilling managers to adapt to new ways of working and market conditions. CEOs need to focus energy not only on their markets, customers, shareholders, capital structure, and business model but also on solidifying their company’s culture, defining its mission and purpose, and reconciling the goals of thousands of employees whose personal views might not align.

So far, they are getting out on the front foot. Seven out of eight said they have frameworks or policies to support employees affected by a crisis and protect a unified culture that avoids employee polarization. In contrast, more than 70% said they have frameworks for adjusting the company’s commercial footprint to reflect its values.

The road ahead — leadership strategies to thrive in challenging times

The most successful CEOs in the next few years will be the ones who can generate alpha amid a fog of uncertainty by remaining flexible and acting on early warning signals.

Of course, this survey is merely a moment in time. How will changing demographics and technology fuel growth in the coming years? How will generative AI create long-term value and revenue opportunities? What will supply chains look like in the years ahead? Will the new ways of working succeed? We view these insights as the starting point in a more extended conversation about leadership in an era of unpredictability.

A version of this article was originally published on the Oliver Wyman Forum.