C-Suite executives are bullish about growth despite a looming bear market

More than halfway through 2022, and after a whirlwind two years, C-suite executives feel good. In the face of a possible recession, growing geopolitical tensions and ongoing workforce issues, business leaders are bullish about business growth. It’s great to be optimistic (I always am!), but we can’t overlook the risks on the horizon. Business leaders need to remain diligent as they guide their companies through the rest of the year and into 2023. 

Cautiously optimistic or overly confident? 

While policymakers and media are focused on inflation and a potential recession, 83% of executives are focusing their business strategy on growth. And many executives are increasing investments, especially in digital transformation (53%), IT (52%), cybersecurity/privacy (49%) and customer experience (48%). These investments help combat risks within companies’ control, but what about risks that we can’t control, like inflation, tax policy or rising geopolitical tension? 

Economic concerns are still on business leaders’ radar—30% cited both a recession and high interest rates as serious risks—but the vast majority still feel confident in their ability to handle these issues and grow their business. And some economic data is starting to show signs of improvement. For example, the unemployment rate went down to 3.5%, and inflation (while still high) started to show some signs of stabilizing in July. 

Today’s US leaders haven’t seen a longer economic crisis since the Great Recession, which lasted from 2007-2009. The COVID-19 recession only lasted two months—from February to April 2020—the shortest in US history. So for many C-suite executives, this is relatively new territory. 

However, today’s business leaders do have experience dealing with extreme uncertainty and economic issues from the COVID-19 pandemic, which led to tightening labor markets with the Great Resignation, ongoing polarization, supply chain disruptions and more. This experience has likely increased their confidence that they can manage the current economic, geopolitical and talent issues facing their businesses now and in the future. 

What business leaders can do 

It’s great to see business leaders so optimistic, especially after a rough few years. And while I remain optimistic, with so many factors impacting the business environment, there are still steps that we all can continue to consider in the coming months. 

1. Be in tune with the whole enterprise

Businesses are facing risks from every angle, and it’s too much for one person to manage or understand on their own. Executives should pay attention to the issues impacting various areas of their business—whether it’s tax, supply chain or cybersecurity—and listen to the experts who lead those functions and engage them to help address risks. For example, executives across the C-suite recently cited cybersecurity as the top risk facing organizations over the next 12 months. And the Inflation Reduction Act is set to impact areas beyond tax, including energy and climate issues. This shows how specific risks can have company-wide impacts, and listening to one another and working together can help reduce risks throughout the company.

2. Lean on your board’s experience

While many of today’s C-suite executives haven’t dealt with a large recession or some of the other  issues we’re facing, members of their boards likely have. Business leaders can leverage their directors’ experience to help guide the organization through tough times. 

3. Be purposeful when implementing hybrid work policies

A large majority (70%) of business leaders have already expanded remote work options or have a plan in place. Remote and hybrid work opportunities are one way for businesses to try to attract and retain talent, but there are risks as well. Twenty-nine percent of CHROs say that finding a balance between in-office, remote and hybrid work is a top-3 workforce-related concern in the next 12 months. It’s important that businesses stay agile and have plans in place to confirm employees are treated equitably, regardless of where and how they work.

4. Lead with empathy

One of the more meaningful outcomes of the past few years was a strong increase in executives openly leading with empathy. The pandemic stressed our work and personal lives in new and challenging ways, and leaders responded with care and concern. And while many leaders are optimistic, there are still risks and challenges on the horizon—and employees know that too and may have their own concerns or may be dealing with personal issues. Leaders should remember to continue listening to their people and leading with empathy whenever they can. 

All of these economic, geopolitical and workforce issues are rapidly changing, so business leaders need to keep a pulse (pun intended) on the business environment to identify and lessen new and ongoing risks. At PwC, we’re continuing to monitor these issues through our client conversations and upcoming Pulse surveys so we can better support our clients and our people. You can learn more about our Pulse Survey: Managing business risks here.