The only thing certain about 2023 is that there will be plenty of economic uncertainty to go around. We're living in an incredibly dynamic environment – which is currently marred by rising interest rates, inflation, deteriorating private sector morale, and an economy that continues to be haunted by the looming threat of a global recession. For many companies, keeping costs under control is at the top of the agenda. But new research from Boston Consulting Group (BCG) suggests that fear and uncertainty aren't keeping most CEOs from finding new ways to bolster their companies’ competitiveness.
Released in March of 2023, BCG's survey was based on 759 global C-suite executives across a wide range of industries. The results showed that 79% of C-suite leaders generally hold a cautiously optimistic view towards their company's performance, while recognizing uncertainty is still the biggest challenge. However, rather than focusing on the unpredictable, leaders are embracing more nuanced strategies for controlling costs and fueling long-term growth at the same time.
While there's no fool-proof strategy for anyone to follow, it appears that simply culling the total number of employees is not sufficient for leaders seeking opportunities to grow. Rather, business leaders should look to build resilience and remain growth-minded amid a volatile economic backdrop. According to BCG's research on C-suites, even when layoffs are considered, many of the top tech executives believe that retaining and developing talent – while also boosting innovation – holds primary significance. On top of that, the survey discovered a strong correlation between companies that invested energy into improving resilience and a marked increase in total shareholder returns. Clearly, resilience leaders in the marketplace are creating a competitive advantage that pays off.
Notably, executives also appear to be far more thoughtful when it comes to how they decrease costs. In addition to downsizing the workforce and slashing direct costs, they are placing a high priority on achieving cost reductions through efficiency improvements. This may include redesigning processes and operational models; or simplifying organization structure.
Overall, what distinguishes resilience leaders is their balanced approach of investing resources freed up through cost cutting into growth actions. More than ever, it's important for members of the C-suite to devise ways of fueling long-term success even during downturns.