Following a year of economic uncertainty and business constrictions, 43% of CEOs expect to return to revenue growth in 2021, exceeding 2019 levels, according to research shared at Gartner IT Symposium/Xpo last month. One-third of CEOs expect to restore growth in 2022.
The focus for CEOs is establishing "quality growth that has a reasonable profit margin," said Mark Raskino, distinguished VP analyst at Gartner, speaking during Symposium. This year, profits were cut because operating in the pandemic is more costly and complicated, even if some companies saw product demand rise.
Despite the pandemic, growth has remained a top CEO business priority for 2021 and 2022, according to Gartner data. CEOs "are looking through the recession and trying to find the other side of it," Raskino said. CEOs cite technology as becoming a key lever for a return to growth.
Executive leaders are taking a pragmatic approach to business strategy as companies eye the coming year. Uncertainty remains because pandemic infection rates are still surging and market contractions play out.
One-third of CEOs are planning a "cautious restart" when tackling COVID-19 and the economic crisis, while 44% expect to more quickly regenerate business, according to Gartner data.
Another 10% plan to remain more conservative, "really burying themselves saying, we just need to live hand to mouth, get the cash we can to survive for the next year or two," Raskino said.
As seen early in the pandemic, many executive leaders are turning to the enterprise technology function to maintain operations and restore businesses to growth. It's where CIOs can step in to help.
According to Gartner, CIOs can support CEOs and the business by:
Scaling digital efforts mainstream, without pushing experimental initiatives
Work with the CEO to understand whether the executive plans to restore or redesign the business, and determine where digital efforts fit in
Support other C-suite executives to meet CEO demands; help COOs maintain employee productivity or help CFOs maintain cash on hand.
Because of COVID-19, almost two-thirds of CEOs have accelerated plans for digital business transformation, according to Gartner data.
There are "two critical unknowns CEOs were focusing on," Raskino said: How long COVID-19 disruption will last and impact the planning environment and how permanent behavior changes impacting people are.
The main need is centering transformation around "good growth," not technology for technology's sake. CEOs expect disruption to persist, creating the need for "sticky changes," particularly because "there's going to be a lot more change and volatility," Raskino said.