- Management consulting firm McKinsey noted eight key areas of focus for CEOs in 2024.
- One top priority: making AI innovation work for their companies — and working out how to scale that.
- Other themes include focusing on building a sustainable business and loving your middle managers.
Being a CEO is “a tough job, and is getting tougher all the time,” according to management consulting firm McKinsey. While the past few years have delivered a global pandemic, busted supply chains, war, stubborn inflation and various other challenges, corporate leaders are also looking to the year ahead.
Here’s what McKinsey says are the top eight priorities that executives have for their businesses as we move into 2024.
Making generative AI work for you
It’s probably no surprise that generative AI — which has taken the world by storm since the launch of ChatGPT — is front of mind. Over the past year, there’s been a ton of hype around innovations in the space — from a host of new chatbots to image generators. Next year though, McKinsey sees enterprises focusing on how to best use it, how to scale that up and what it’ll mean for their industry. The firm estimates that generative AI could add trillions of dollars to the economy per year.
Being a “digital leader” not a “digital laggard”
Figuring out how to actually leverage tech innovation, whether that’s AI or a new software platform, is a longstanding issue. McKinsey research has shown that many businesses only reap less than a third of the revenue benefits they expect after they launch some sort of a “digital transformation.” A key element to success: leadership commitment to the time and money it takes to make this work.
Spending money to go green
Simply put, our planet is getting hotter. Companies stand to benefit from becoming more sustainable and moving toward a net-zero economy. Investors “have held back from committing their capital” amid economic uncertainty, said McKinsey. “What needs to happen is the creation of thousands of new green-technology businesses, in every part of the emerging business system.”
Identifying your “superpower”
To stand out against the competition, companies should focus on one “institutional capability” to home in on, McKinsey suggests. Think of LVMH’s focus on high-quality luxury products or Disney’s outperformance in “imaginative customer experiences.”
Valuing your middle managers
The mantra among some major corporations this year: there are too many “managers managing managers,” as Meta CEO Mark Zuckerberg put it. However, middle managers aren’t just there to bloat the company’s ranks, McKinsey says. Companies can actually benefit from seeing them as key players at the center of the action.
Planning for unpredictable geopolitics
No company exists in a silo from the outside world, but it’s hard to prepare for major global happenings. One suggestion: companies should map out three types of possible issues and how to react. One is “black swans,” unpredictable events likely to have a high impact (like Russia’s invasion of Ukraine). The second: “gray rhinos,” events that are probable and have a high impact (like the risk of escalating regional conflict). The third: “silver linings,” or openings companies can use to leverage a competitive advantage.
Focusing on McKinsey’s rules for growth
It’s a CEO’s job to improve the business, but in the decade before the pandemic, a typical company grew at a rate of just under 3% and only one in eight saw growth rates of more than 10% a year, McKinsey said. It recommends focusing on steps including prioritizing fast-growing markets, and, conversely, knowing that sometimes you have to make cuts in order to achieve long-term growth.
And finally, accepting macroeconomic uncertainty
“Nearly four years after COVID-19 rewrote history, some CEOs are still waiting for macroeconomic certainty. That’s unlikely to happen — and that’s OK,” said McKinsey. Lean into the uncertainty, it recommends, like investing near the bottom of cycles, as well as making sure to plan for different scenarios. and for those looking further than 2024, here’s McKinsey’s four plausible economic outcomes for the next decade.