Reinvention critical for success in next decade
Over 40 per cent of chief executives believe their firm will be unviable beyond the next 10 years and are actively reinventing their businesses to stay relevant.
In PwC’s annual global CEO survey, the firm surveyed over 4,000 CEOs in 109 countries on the future of their businesses.
Some 42 per cent said they question the viability of their firms over the next decade and almost 40 per cent said they have already begun competing in at least one new sector in the last five years, including by targeting a new customer base, developing innovative products or taking a new route to market.
In asset and wealth management specifically, 9 per cent had moved into consumer services, 8 per cent had moved into health services, 7 per cent into transportation and logistics, 5 per cent into business services, and 4 per cent into technology.
“Telltale signs” that a sector is ripe for reinvention are the arrival of new market entrants, a rise in venture capital investment, or a rapid redistribution of market share among incumbents.
“Nearly four in 10 CEOs tell us that their companies have started to compete in at least one new sector in the last five years. Although many of these initiatives have been small, about one-third of CEOs making cross-sector moves said these represented 20 per cent or more of company revenue over the period.
“If CEOs need further encouragement to double down on reinvention, they should note that we see a strong association in the data between the number of reinvention actions companies have taken and the profit margins they achieve.”
To what extent has your company taken the following actions in the last five years?
Source: PwC, January 2025
However, PwC noted that for the majority of firms, progress to reinvention is slow, with only 7 per cent of revenue over the last five years coming from distinct new businesses, on average. Barriers to this reinvention include weak decision-making processes, low levels of resource reallocation, and a mismatch between short-term CEO tenure and long-term strategic goals.
The regulatory environment was cited as having the biggest influence on their economic viability, named by 42 per cent of CEOs. Others named inconsistent decision-making which is determined by outcome rather than a quality, transparent process.
“For CEOs, the challenge is to envision the ecosystem in which their company will operate in the future. This means thinking through the impacts of megatrends (notably, but not only, climate change and AI), how customer needs will change, how value pools will shift and what roles distinct types of companies will play.”
AUTHOR
Laura Dew
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