Almost a third of CEOs predict they will face more than one crisis in the next three year

Published at 12:23 PM on 09 February 2017

  • 65% of CEOs experienced one or more crises in the past three years
  • 72% see global uncertainty as the biggest threat they face
  • Almost two-thirds of CEOs feel vulnerable about their ability to gather accurate information quickly in a crisis

Businesses are being confronted with crises more often than might be expected, and with CEOs anticipating more in the future, it’s no longer a matter of if they’ll hit but rather when, according to PwC’s new pulse survey¹ of business leaders.

While two-thirds (65%) of the CEOs interviewed say they experienced at least one crisis² in the past three years, over half have gone through two or more and 15% say they’ve been hit by five or more crises in that time. Looking ahead, CEOs predict at least one crisis in the next three years, suggesting that managing crises may well become a new normal for businesses.

Unpredictable and uncertain times are having a big impact on the types and frequency of crises companies are experiencing – while global economic uncertainty is seen as the biggest threat, concerns over increased regulation also loom large in CEOs minds with exchange rate volatility and geopolitical upheaval adding to the uncertainty.

Melanie Butler, UK partner and Global Crisis Centre leader, PwC, said:

“Often a crisis isn’t isolated and contained, nor is it fleeting.  Some crises are anticipated, some unlikely and some are simply impossible to foresee.

“Our findings suggest that crisis management is very much on the CEO agenda because they are already dealing with crises – and believe they will continue to deal with them on a regular basis. It’s clear that for the foreseeable future the only certainty is uncertainty with continued geo-political turmoil, sluggish global growth and fluctuating currencies.”

An overwhelming majority of the CEOs interviewed (91%) say they are in charge when a crisis hits. However, with 65% feeling most vulnerable about their ability to gather information quickly and accurately during a crisis and over half (57%) feeling vulnerable because of an out of date business continuity plan, it suggests that businesses don’t always have a developed and clearly communicated crisis response plan. Indeed only a fifth (21%) of CEOs are planning to start a programme to address the threats within the 12 months while 25% have neither started a programme or intend to currently.

Melanie Butler, UK partner and Global Crisis Centre leader, PwC, said:

“The certainty that so many CEOs say they are in charge during a crisis is a key element of strong leadership. And it needs to be supported by a strategy, a clear plan and a structure to first tackle then recover from the crisis.

“If the rest of the business is unclear how they should perform at a time of serious uncertainty then the CEO can quickly find themselves isolated, undermined and exposed. 38% feel there is a lack of clarity when it comes to the responsibilities of the management team and individual teams taking independent decisions.

“Crisis planning is critical to help organisations prepare for, recover from, and respond to crises and having a battle tested crisis plan that is aligned to the organisation’s purpose and value is key.”

Having a crisis plan can also help companies turn crises to their advantage. That may seem counterintuitive, but according to the responses of CEOs, 39% of them say their ability to manage a crisis well has actually contributed to revenue growth, while a further 44% say that a well-managed crisis has not had a negative impact on their top-line growth.

Ends

Notes to Editor:

¹ 164 global CEOs were interviewed about their views, struggles and approaches to crises

² A ‘crisis’ is defined as when one or more triggers or stress events significantly impacts or threatens the continuity of ‘business as usual’.

For more details, see: www.pwc.com/ceopulse

About the Global Crisis Centre

For the Global Crisis Centre, trust and problem-solving are central to what we do.

By helping organisations prepare for, respond to and recover from crisis, we stay true to this purpose. Standing by clients gives them confidence that they have somebody by their side to help them confront the crisis and solve the problems they face. In turn, they can reassure their own clients, communities and stakeholders that they are able to manage crisis effectively.                        

Getting ready for and reacting effectively to crisis helps them to emerge stronger. That builds trust in the systems that are critical to society.


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About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

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