The global economy is not just undergoing change - it is becoming increasingly fragmented. On the one hand, geopolitical tensions and trade conflicts are causing unpredictable economic disruptions and uncertainty. On the other, technological upheavals - led by AI and automation - are creating both opportunities and risks. Market and business developments have never been harder to forecast. This raises a central question:
How should top management steer strategy in an era of fragmentation?
The good news: When speaking with board members and executives of large multinational companies, there is no sense of despair or pessimism. Quite the opposite—corporate leaders agree that now is the time to set a clear focus and navigate boldly through uncertainty.
In light of today’s challenges, top management should anchor their strategic direction on four key pillars:
1. Focus on Cost Optimization and Operational Efficiency
In this year’s CxO Priorities Study, we surveyed over 1,000 board members and executives across 15 industries and 33 countries about their current strategic priorities. At the top of the agenda: optimizing costs and profitability. The goal is to maintain competitiveness - especially under mounting cost pressure. At the same time, companies are striving to boost efficiency, not only to improve margins but also to create financial headroom for future-proof investments. These include technologies like AI and automation, as well as R&D and innovation.
Notably, R&D and innovation have significantly gained momentum, particularly among industrial companies. For the first time, this strategic field was surveyed as a standalone management priority - and it immediately ranked third among manufacturers, right behind cost optimization and digital transformation.
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