PwC Chairman: 56% of Companies Gain Nothing from AI, Overlooking Basics

In a significant shift for global business leaders, Mohamed Kande, the global chairman of PwC, has emphasized the evolving role of CEOs. Speaking at the World Economic Forum (WEF) in Davos, Switzerland, Kande noted that the demands on today’s executives have transformed drastically in just over a year. The traditional focus on business growth and operational efficiency is now being replaced by a three-fold mandate.

Changing Responsibilities: The New CEO Mandate

Kande articulated that CEOs must now manage their current operations while simultaneously transforming them and innovating new business models. This change, he believes, presents one of the greatest challenges for leaders in recent decades. “I’ve not seen that in 25 years,” Kande remarked, underscoring the unprecedented complexity leaders face today.

AI Adoption and the Execution Gap

The rapid integration of artificial intelligence (AI) is a primary catalyst for this shift. According to PwC’s 29th global CEO survey, which included responses from 4,454 CEOs across 95 countries, there exists a significant gap between ambition and actual benefits from AI implementation. While many companies are eager to adopt AI, only 10% to 12% report tangible benefits either in revenue or cost savings.

• 56% of companies reported gaining nothing from AI.
• 95% of generative AI pilot projects failed, according to an MIT study.
• Only 30% of CEOs express confidence in growing their businesses.

Kande emphasized that the lack of foundational rigor, such as clean data and effective governance, contributes to this discrepancy. “It’s about execution, not technology,” he noted, stressing the importance of solid leadership and management.

The Confidence Paradox

Interestingly, while CEOs express confidence in the global economy, their confidence in achieving personal business growth has dwindled. CEO confidence in revenue growth dropped significantly, from 56% in 2022 to just 30% in the latest survey. This disparity illustrates an unsettling paradox and highlights the need for agile leadership.

Transforming the Workforce

The changing expectations of CEOs also impact workforce dynamics. Kande warned that AI is disrupting traditional career paths, which often relied on hands-on learning. Future career development will require a focus on “system thinking” instead of just task execution, reflecting the capabilities of AI.

A Future of Innovation

Ultimately, Kande remains optimistic about the future despite current uncertainties. He argues that looking at historical innovations can provide insights into today’s challenges. Drawing parallels with past infrastructure booms, Kande believes we are on the brink of a new wave of innovation.

This perspective is supported by the CEO survey’s prediction of a “decade of innovation and industry reconfiguration.” Companies that explore new revenue streams are likely to experience increased profit margins and enhanced confidence in their future growth.

Concluding on a hopeful note, Kande encourages leaders to embrace change rather than fear it. “You’ve got to embrace it,” he asserts, urging executives to seek understanding in this transformative era. This acceptance of change will be crucial for navigating the complexities of today’s business landscape, especially in relation to AI.