CEOs in Asia-Pacific to face an era of 'polycrisis', says Teneo

22 February 2024 3 min. read
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For CEOs in Asia Pacific, leadership demands flexibility and empathy as companies face heightened geopolitical complexity and pressure to adopt new innovations like AI and take action on ESG. That is according to a report from global consulting firm Teneo.

The report surveyed leaders from companies based in Australia, mainland China, Hong Kong, India, and Singapore, among others. The main takeaway is that business leaders are facing what Teneo calls an era of ‘polycrisis’, or in other words, a wave of interconnected issues that must be addressed carefully and comprehensively.

“CEOs in Asia Pacific are not sanguine about the challenges that they face, but have never known calm market conditions. Rather, they have grown up at a time when change is constant and serious questions are being asked of leaders,” said Lauren Chung, a leader at Teneo.

CEOs in Asia-Pacific to face an era of 'polycrisis', says Teneo

Dynamic leadership

The survey shows that the CEOs in the region are increasingly comfortable with change. They also highlight the need to balance short- and long-term planning, thinking ahead while being flexible. CEOs stressed the need for empathy when dealing with stakeholders.

There are so many potential problems for business leaders to consider: Geopolitical turmoil disrupting supply chains, inflation, and future unforeseeable events that could be major hits like the Covid-19 pandemic was.

All of these complex factors make it crucial for business leaders to be willing to make bold decisions at a moment’s notice. That quality of staying nimble means avoiding rigid strategies that can lead companies to seeing swift loss of market share, competitive disruption, and regulatory impacts.

Risk, politics and resilience

More than half of the world is voting in 2024, including the United States, which signals potentially big political changes on the horizon. That increased political risk is compounded by fluctuating investor sentiment, continuing inflation, and rapid social changes, among other things.

But it is not just political changes: CEOs are anticipating regulatory changes that their organizations will need to keep up with. Changing political climates are also likely to usher in more regulations on the environment and in the realm of technology.

Responses to supply chain disruptions over the past several years have made companies more resilient, but have also significantly increased costs. Some of the business leaders surveyed noted that there is a trend in shifting towards localization, which works to consolidate supply chains and keeps companies from being ‘spread too thin’ over long distances in different markets.

Technology and AI

Companies in the Asia Pacific region have shown that they are able and ready to adopt new innovations, being some of the earliest adopters of AI-powered tools, for example.

The huge benefits to investing in innovative technological solutions are already clear in most industries. AI tools, as well as cloud computing and other innovations, are quickly becoming an essential for businesses that hope to keep up with the competition.

Despite the clear advantage of a company with a well-conceived AI strategy, some CEOS in the APAC region are adopting a cautious approach. For some companies, adoption is a no brain, but others are facing doubts from concerned investors, suppliers, partners, and regulators.

Overall, the survey by Teneo shows APAC business leaders are embracing flexible leadership, a cautious and prudent approach to risk, and mostly embracing new innovations like AI.

“Our first report highlighted that many leaders had adopted more nimble, short-term planning approaches, but most considered this a response to pandemic operating conditions,” said Chung.

“However, this year’s report reveals that many of the management changes originally adopted to run businesses in the unpredictable pandemic era have become entrenched. This is in response to consistently higher degrees of uncertainty due to new technology developments such as AI and heightened geopolitical risk.”