43 percent of executives say companies have been weakened by business disruptions and market volatility

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Apr 18, 2023, 11:33 ET

Nearly 40% admit their organizations have been slow to react to market conditions, despite more than two-thirds expressing confidence that they can predict, detect and reduce risk from volatility

CHICAGO, April 18, 2023 /PRNewswire/ -- Amid an ever-changing landscape – challenged by inflation, recession concerns, geopolitical tensions, talent scarcity and more – four out of 10 business leaders surveyed admit their companies have been weakened by the volatile business environment and that their companies have been slow to respond. Executives in the insurance (55%), government and public sector (50%) and private equity (48%) sectors were most likely to report experiencing weakening of their businesses, according to The Crowe Executive Outlook Study, a joint research project from Crowe LLP and Forbes. As shared in the study's debut report, "The Unlikely New Frontier Of Enterprise Growth: Why Innovation Leaders Pull Ahead In Times Of Volatility," of the eight industry verticals included in the study, private equity (51%) and government (47%) executives were the most self-critical when assessing the speed with which their organizations responded to market signals.

43 percent of executives say companies have been weakened by business disruptions and market volatility, according to The Crowe Executive Outlook Study, a joint research project from Crowe LLP and Forbes.

In contrast, the study, comprising feedback from 1,001 C-suite and business leaders, also found that more than two-thirds of respondents are confident in their ability to predict, detect and reduce risk associated with business volatility. Private equity and banking executives (74% or more) were most bullish on their ability to anticipate and react to these turbulent market conditions.

"While many executives acknowledge the impact that disruption has on their business models, companies that proactively treat business resilience and sustainability as strategic imperatives adapt to market dynamics the fastest, and in turn, are best positioned to identify and deliver value based on new and emerging customer demands," said Crowe CEO Mark Baer. "Every business cycle has peaks and valleys, along with unexpected turbulence. Winning organizations have a knack for charting a course that ensures consistent, sustainable performance in every aspect of managing the business – from technology adoption and talent planning to risk management and operational efficiency."

According to respondents, the leading sources of business volatility now and by 2025 include:

Leading sources of volatility among executives	Currently	By 2025

1. Overall economic change (inflation, potential economic turndown):	40 %	44 %
2. Supply chain (shortages, reconfiguring/nearshoring, data sharing):	38 %	41 %
3. Talent (skilled workers, scarcity, DE&I, retention):	37 %	43 %
4. Financial risk (revenue growth, profitability, access to capital):	35 %	45 %
5. Geopolitical change (tariffs, trade barriers, country risk, etc.):	34 %	42 %
6. Existing technology footprint and future road map of organization (cloud, digital and data-driven business processes, AI, IoT, 5G):	34 %	41 %

As a result of market volatility, 51% of executives indicate their organizations will conduct a significant acquisition in the next two years – to access new talent, new technology and accelerate innovation. Executives in manufacturing (60%) and banking (59%) expressed the highest likelihood for an acquisition.

In contrast, 41% of all executives believe their organizations will merge or be acquired by 2025. Executives in banking (48%) and technology, media and telecommunications (47%) expressed the highest likelihood of merging or being acquired.

Executives indicated they're focusing on talent, technology and processes to help address ongoing volatility in their businesses. On talent in particular, executives most frequently cited increasing investments in workforce training (64%), investing in change management (63%), and empowering distributed decision-making across the organization (61%) as actions they're taking to engage employees.

"I don't think there's any argument that the way of working and the expectations of the workforce have forever changed in recent years," said Katie Hamada, chief people officer at Crowe. "However, companies can't just take a reactive view to how things have changed … we are now in a state of perpetual evolution as it relates to talent management. Every company, every industry and every employee has different dynamics and perspectives on what defines the 'optimal talent experience.'"

Hamada added, "There is no cookie-cutter, one-size-fits-all philosophy to defining the talent experience. Those who deploy a fluid, transparent and human-centric approach to employee engagement and talent solutions stand the best chance of adapting to the ever-changing needs of employees."

For more detailed findings or more information about The Crowe Executive Outlook Study, view the report, "The Unlikely New Frontier Of Enterprise Growth: Why Innovation Leaders Pull Ahead In Times Of Volatility."

About The Crowe Executive Outlook Study
In partnership with Crowe LLP, Forbes surveyed 1,001 executives from organizations with at least $500 million in annual revenues. Respondents represent companies across eight industry sectors – banking, government, healthcare, insurance, manufacturing, pharma/biotech, private equity, and technology, media and telecommunications. Most respondents, 71%, are C-suite executives, board members, or partners. Three-quarters (75%) of respondents are primary decision makers.

About Crowe
Crowe LLP is a leading public accounting, consulting and technology firm with offices around the world. Crowe uses its deep industry expertise to provide audit services to public and private entities. The firm and its subsidiaries also help clients make smart decisions that lead to lasting value with its tax, advisory and consulting services. Crowe is recognized by many organizations as one of the best places to work in the U.S. As an independent member of Crowe Global, one of the largest global accounting networks in the world, Crowe serves clients worldwide. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.

Twitter: @CroweUSA
LinkedIn: Crowe

SOURCE Crowe LLP