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CEO insights from the World Economic Forum’s Annual Meeting in Davos
January 24, 2024
Tim Ryan, PwC US Senior Partner, was recently in Davos for the World Economic Forum’s Annual Meeting, which brings together global leaders from government, business and civil society to help solve global challenges.
In this episode, J.C. Lapierre, U.S. Chief Strategy and Communications Officer, talks to Tim about some of the top topics this year, like technology, the future of work, climate and — the theme of this year’s meeting — building trust. They also explore key takeaways for business leaders, including new ways, in this changing world, to find growth and create value for all stakeholders.
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Tim Ryan is PwC's US Senior Partner. A forward-thinking leader committed to driving human-led, tech-powered outcomes to build trust in society and solve important problems, Tim has a proven record advancing strategy, growth, innovation, and upskilling. He reimagined PwC leading a complete digital transformation and launching a bold new strategy – The New Equation – to get ahead of the rapid pace of change bringing the best people, capabilities and technology together to support clients in building trust and delivering sustained outcomes.
J.C. Lapierre serves as PwC’s US Chief Strategy and Communications Officer. In that capacity, J.C. works with the executive leadership team to develop, communicate, execute and sustain corporate strategic initiatives. J.C. has been a critical part of the firm’s efforts to streamline business operations and reduce operating costs to create investment capacity. She also helped architect the strategy to digitally transform the firm.
Episode transcript
Find episode transcript below.
00:00:02:00 Welcome to PwC Pulse, a podcast to provide insights to help you solve today's business challenges.
J.C. LAPIERRE:
00:00:09:22 Hi, I'm J.C. Lapierre, Chief Strategy and Communications Officer at PwC U.S. and I am so excited for this special episode of the PwC Pulse podcast. Today I'm talking to Tim Ryan, PwC Senior Partner who was recently in Davos, Switzerland for the World Economic Forum's annual meeting. Each year, this meeting brings together global leaders from government, business and civil society to help solve global challenges.
00:00:34:21 I'll be talking with Tim about some of the top topics this year, like technology, the future of work, climate, and the very important theme of this year's meeting - Building Trust. We'll also explore key takeaways for business leaders, including new ways. in this changing world. to find growth and create value for all stakeholders. Tim, welcome to the podcast and thank you so much for joining us.
TIM RYAN:
00:00:59:04 Thank you. It's great to be with you today and the listeners. Thank you.
J.C. LAPIERRE:
00:01:02:04 Okay. Before we dive in, Tim, we've got some rapid-fire questions to kick us off. Davos is known for its freezing temperatures and so is Boston. What's your favorite activity in the winter?
TIM RYAN:
00:01:13:18 J.C., it's to keep moving around in the cold. The quicker you move, and more often you move, you stay warm. So for me, it's moving. Whenever I can take my dog for a walk in the woods. It keeps you warm and happy.
J.C. LAPIERRE:
00:01:24:06 Yeah. And great gloves. What's your New Year's resolution for 2024?
TIM RYAN:
00:01:28:14 My New Year’s resolution is to do more reading of things that I really like to read. I do a ton of business press, but more enjoyable reading, and I'm off to a good start.
J.C. LAPIERRE:
00:01:37:13 Amazing. And as we kick off 2024 what is going to be your theme song this year?
TIM RYAN:
00:01:43:17 Ah good one. Kenny Chesney Everything's Gonna Be Alright. There's a lot of things going on in the world right now. It'll be all right.
J.C. LAPIERRE:
00:01:49:20 So good. Thank you for sharing with us. Now, why don't we jump into the topic for today? The theme of this year's meeting at Davos was rebuilding trust. That, of course, is right up your alley Tim. PwC's purpose is to build trust in society and solve important problems. And I know it's also your personal mission too. Can you share more about why trust was at the top of the Davos agenda this year?
TIM RYAN:
00:02:13:05 Yeah, without a doubt, J.C. When you look at the world today, trust is really lagging across almost every dimension. Trust in government, trust in business, although it's higher than government, has been lagging as well. And just trust generally in society, we see a lot of divisiveness that ultimately goes back to trust. Workers are expecting more from their employers or are expecting more from government.
00:02:35:19 And this realization that business can't succeed over the long term. If we don't begin to address trust, then of course, the trust gap that exists overall in business plays a big part in that. So the reason it was on the top of the agenda is it's a strategic imperative if businesses are going to thrive across the globe.
J.C. LAPIERRE:
00:02:51:17 It seems that trust just is woven into absolutely everything. And so why don't we dive in a little bit deeper in this critically important topic? I'd like to discuss how trust impacts a number of areas. Let's talk about technology and AI, the future of work, climate and one that we've been talking quite a bit about, which is reinvention.
00:03:10:03 And all of these are top of mind for business leaders. One thing I'm particularly curious about is what you're hearing on generative AI and specifically responsible AI. At PwC, we've been talking about this for a long time, as you know, and we've been leaders in this area, but right now it feels like you can't move left or right without somebody discussing it. What did you hear in Davos and what are business leaders and policymakers talking about?
TIM RYAN:
00:03:33:15 There's certainly, you're right, it is everywhere. It's almost inescapable to have a conversation with an executive, member of the media, a government official, without having generative AI coming up in all of the exciting possibilities that go with it. What I'm hearing on the topic of trust and responsible AI is, I'm encouraged that it's picking up. So there's certainly euphoria around what does it mean for efficiency, what does it mean for productivity?
00:03:57:17 What does it mean for new revenue channels? What does it mean for new product generation or even new business models? What I'm seeing now is more discussion around how do we do it responsibly, not an either or, meaning I don't want to miss out, or I want to make sure I don’t move forward without looking at the trust in responsible part.
00:04:14:20 I'm seeing both. So, I'm seeing more companies begin to ask how do we get on our journey without losing the trust that they have in their brand or whatnot? So they're focusing a lot more on topics such as how do we make sure we prevent hallucinations, how do we make sure that our models are right? How do we check what we use before we put it out there as trustworthy?
00:04:34:23 So a lot of focus on things that I think are really important that goes to ultimately trust and ultimately using the tools that come out of generative AI.
J.C. LAPIERRE:
00:04:43:01 And where do you think people are on the journey? It strikes me that it's pretty early on, but what was your take on that?
TIM RYAN:
00:04:48:22 Yeah, without a doubt. I mean, it's like maybe broadly first, before I get to the journey of trust, where we are in generative AI is, I think to some degree we have the opportunity to maybe be the mature ones in the room. The euphoria right now is outsized. Everybody's talking about it. One of things I'm sure we'll talk about is jobs at the end of the day, and generative AI will affect jobs.
00:05:08:14 I think we need to put some context around that. It'll take years before we get infrastructure aligned, data governance aligned in organizations. So it's going to take a while before we see major change. 2025 and 2024 I see it as the years where companies are investing in their learning. They're figuring out, right, use cases. how to change their business.
00:05:27:24 And we're on the journey. I think we're in the very early innings of that. I expect to see business models and massive changes coming in 25, 26 and 27 as companies get up to speed. I think trust is the same journey as companies look at it. We're beginning to see companies put in governance structures, put in training, put around controls, update their cyber capabilities, work with different partners, all to make sure as they go on this journey, they make sure they don't lose the great brands that they build and lose trust through something unintended.
J.C. LAPIERRE:
00:05:57:04 Yeah, sounds like that's really important then to set expectations about when the impacts and the outcomes of it will appear. You mentioned the workforce, and so I'd love to talk a little bit about that. And we know that generative AI has the power to transform how work gets done for both leaders and for employees. And how did trust and the workforce in transforming the workforce come into play in the discussions and again with the lens of generative AI.
TIM RYAN:
00:06:23:07 Yeah, so it's really important to be transparent with your workforce. I think it is important to note that there are large populations of many companies employees who are worried around what does this mean for me? And that is incredibly important to make sure we're sensitive and listening to our employees around what their concerns are. And there's a couple of critical things to do.
00:06:43:21 One, be transparent, like what's the length of this journey? And in many cases, the truthful answer is we don't know what the impact is going to be in the workforce at this point because we need to see how this thing plays out. The other thing is to help them succeed and put training in their hands. How do they do their jobs differently?
00:07:01:00 How do they learn new skills, how do they become more relevant going forward? I know you're aware, but for our listeners at PwC, we started this journey six years ago when we said to our employees, we're not going to leave you behind. We don't know what's coming next around technology. Our goal is to meet people adept at learning technology on a continuous basis.
00:07:20:04 So we made employee upskilling similar to 401k and health care like a benefit. We did bots, automations, visualization, human centered design, and now we're on generative AI. I think it's important for companies to help their employees be successful, hopefully at their companies, but if not, they have the skills to go forward. So I think transparency around certain things, we just don't know at this point.
00:07:41:05 Here's what we're doing to help you at the same time, making sure that our business is relevant.
J.C. LAPIERRE:
00:07:45:22 Yeah, and I know at least, for myself personally, as somebody who was massively intimidated by this journey at the beginning, it's really fun to get to do alongside my peers with everybody in the workforce.
TIM RYAN:
00:07:57:05 J.C.maybe if I can just drill down. Your statement just reminded me, people wonder, okay, what does upskilling mean? Do I need to be an engineer? And the answer is no. Even how to write a prompt and what is the way to write efficient and effective prompts? That's a skill. We at PwC and many of our clients are on that journey now. That's something we can teach today.
00:08:16:09 Another thing we can teach today is how do we fact check and how do we check that what the model is giving us is right? We can still be efficient, but the human plays a role in how do you check, and that's a skill we can teach right now. In terms of how to use it, whether you're in a call center and generative AI is writing a script or you are in our business and you're doing a memo on accounting, checking it is also a skill so that we can teach people.
J.C. LAPIERRE:
00:08:38:05 Amazing and so important. Thanks, Tim. Let's move into climate. Another big topic, not just at Davos, but within the business community across the past year and even longer. What were the discussions around the challenges and the opportunities? And do you believe this is also part of the trust conversation?
TIM RYAN:
00:08:58:11 Yeah, So I would say without a doubt it's part of the trust conversation. Business has such a major role to play in carbon reduction. Taking carbon out of the environment is part of the trust conversation, it will be for decades. The dialogue on the climate challenges were on its transition. It's how do we get from point A to point B?
00:09:14:0 There's very few who disagree that we need to continue to take carbon out of the environment, and there's a sense of urgency. The question is how do you do it in an orderly way where you allow business to run, you're able to feed communities, let people enjoy the quality of life that they're used to, make sure economies don't fall apart in that transition.
00:09:30:05 Then the question is, how do you do that safely, securely, and in a way that's affordable? So much of the challenge is focused on that. There's also some challenge around reporting and making sure people can see governments and people can see transparently what companies are doing in terms of the opportunities. They're endless. So while generative AI dominated the conversation, there's been a lot of really good work and discussion, for example, at Davos around energy efficiency and the opportunities just to help each other and help society get to the net zero goals that we have by just being more efficient users of energy.
00:10:04:02 And we see incredible innovations around taking carbon out of the environment. But there was a big focus in Davos, particularly with a study that PwC did with the WEF around energy efficiency and just how meaningful that can be in getting the world to its net zero goals.
J.C. LAPIERRE:
00:10:19:19 Sounds like a topic that is much discussed is the importance, of course, but also how do you do it in the appropriate time frame And make sure that you're doing it the right way, which of course we talk about quite often with our clients. One of the things that really struck me this year and last year as well, we do our annual survey of CEOs, and last year 40% of global CEOs said that they believe their companies would no longer be viable in ten years’ time if they continue on their current path.
00:10:48:12 This year, which was our 27th annual Global CEO survey, that number actually increased to 45%. So 45% of CEOs are still not confident in their company's viability beyond a decade. How do you interpret that finding and what was discussed in Davos around that?
TIM RYAN:
00:11:07:03 That without a doubt, J.C., for the last years has been probably the single most surprising statistic coming out of our annual global CEO survey. And it's something we've been talking about. And frankly, I think we need to talk more about. When you look at the job of the CEO today, they have an incredibly high pressure job and they have a lot of pressure in the short term delivering earnings, meet the needs of the shareholders, return money to shareholders and still have an appropriate return.
00:11:37:24 That by itself is challenging. They also have the need, given how fast climate is moving, given how fast rapid technological advances are occurring, given rising customer needs, they also have the need to reinvent their business model. What does that mean in plain speak? Fundamentally rethink how they make money five years out, ten years out. Like how will they make money?
00:11:58:07 How will they serve their customers? Because it will fundamentally change. And so the CEOs, on one hand, they've got to deliver short term. On the other hand, they've got to fundamentally rethink their businesses examples just to make it real. In health care, health care will be delivered at home. It will be a self-service model. It will be powered by AI, the concept of physical, the concept of going to the clinic for a blood test.
00:12:21:10 Those will change before our very eyes sometime in the next ten years. That's a fundamental change in business models. Fundamental change in the knock on injuries are insurance and the cost of health care and how providers work. That's one industry. Take another one Logistics, Logistics companies are very asset heavy. They own trucks, they own planes, they own routes, they own rail.
00:12:41:24 They have many thousands of employees. That will change and they'll go to platform businesses. And you literally go industry by industry companies will be forced to reinvent themselves because if they don't, their competitors are. Getting that change done first of all, is multi years in the making. It's not in a one-year cycle and it's incredibly complex where you're trying to thread the needle of the short term as well.
00:13:03:22 And I think for those reasons, complexity and then also regulation that will happen to those industries to make sure workers are protected, customers are protected. While you are going through that transformation that makes it very difficult.
00:13:16:22 I think that's the reason you see that 45% number up. It does put a massive premium on the quality of the management teams at these companies. Given the complexity of what they're facing is.
J.C. LAPIERRE:
00:13:26:06 Yeah, and you talk a lot, Tim, you and I talk about this not just on the quality of the management team, but the alignment. Can you talk about that just a little bit?
TIM TYAN:
00:13:34:23 Yeah. So there's an awful lot of focus on CEOs as there should be, given the authority, the roles they have, the responsibility they have, and ultimately the accountability, but go through what I just laid out there in terms of remaking businesses. The bigger the business, the more global the business, the more employees you have, the more diverse it is, the harder it is to do.
00:13:52:15 You can't do that by yourself. The CEO requires a team that is massively aligned. And as you know, J.C., we went on our own transformation at PwC. If you don't have management alignment, which is easy to say and hard to do on a scale of 1 to 100, it's a one in terms of easiness to say, and it's a hundred in terms of complexity to do.
00:14:11:02 At the end of the day, leadership alignment is massively important because when you remake a business, it's not about thinking about human capital in a silo, thinking about finance in a silo, or thinking about procurement in a silo or business in a silo, it is cutting across and looking at the world through the customer's eyes and leveraging technology. Do it without alignment, it'll significantly delay, if not impair the process of the transformation.
J.C. LAPIERRE:
00:14:34:16 I completely agree. After spending the week in Davos and more generally thinking about all of the conversations you've been having recently, what advice do you have for leaders as they take on the complexity of today's agenda and specifically contemplate trust in that?
TIM RYAN:
00:14:52:17 This is something that I've been thinking a lot about because a lot of boards or CEOs one on one will ask me this really anybody in a leadership role, by the way, we're not forced into leadership roles. We aspire to leadership roles. Most leaders want to make a difference. Which comes to my first question. The first question for anybody in a leadership role is, are you up for change?
00:15:13:23 Are you willing to lead through a period of change if you aspire to be in this role in order for change? Honestly, I find those two things to be inconsistent. So are you up for the journey of change? Whether you're a CEO thinking about do you want to do another five-year run at your company, or whether it's time to leave, whether you're someone who's aspiring to get into a management role.
00:15:33:09 First question is, are you up for it? The second question is are you willing to work differently? What got us there is not what is it going to take as to where we're going, as we reimagine how companies make money and serve their customers differently? Are you willing to do things differently? Are you willing to be someone who manages horizontally and not just in your vertical or silo, so to speak?
00:15:56:05 Very different skill set. And then the last one is, are you capable of really getting your organization ready for change? Because change, truly successful change means every single person at the organization goes on that journey. And are you willing to get your organization ready to where you become so agile that change becomes an asset?
J.C. LAPIERRE:
00:16:14:24 Yeah, such good advice. All right. We're getting close to the end here. Just a couple more. With so much change in today's environment, what do you think is the one or a couple most important skills for leaders that might be different from yesterday's? We know this is a topic that is quite often talked about right now.
TIM RYAN:
00:16:32:09 Yeah, it is. There's so many skill sets that a leader needs today just to rattle couple off and or get to what I think the most important is you need high tech acumen. It's hard not to have high tech acumen. You need the ability to work with others. You need the ability to team. You need to understand how a business works.
00:16:50:01 You need to understand human capital. You need to understand public policy. You need to understand operations. But without a doubt, from my perspective, the single biggest trait is you need humility. Now, some may say, Tim, you know, you're just being soft. And I'm not the reason you need humility is. If you've set a bold agenda, a truly bold agenda to transform your company and it's truly bold, you will make a lot of mistakes in the way.
00:17:16:13 By the way, if you make your mistakes and it wasn't bold enough, they both can't be true. And if you set a truly bold agenda, you're humbly going to make mistakes and acknowledging them quickly and then resetting and re-coursing is going to be really important. So I think humility ties into a bold agenda. The only way to be successful, in my view, over the long term is remake your businesses, reinvent the business, reinvent how you make money doing that.
00:17:40:15 It will not be a straight line. The more humble you are, the quicker you'll get to that reimagined business.
J.C. LAPIERRE:
00:17:45:20 And the last question I'll offer either for you to share any last thoughts with our audience or perhaps one thing that surprised you in your week at Davos.
TIM RYAN:
00:17:55:15 The thing that surprised me, without a doubt and it's not just Davos, it's across the board. We talk a lot about culture when we're with each other, when we're with our clients, what surprised me a bit is that we're not talking as much as we used to. And the reality is that culture ties to humility. It ties to the ability to change.
00:18:16:02 I see companies investing hundreds of millions, billions of dollars in technology and innovation. Culture is something that I think there's an opportunity to invest more. I think it's that strategic asset that will allow a company to make sure they get there next hundred years, the next 50 years, to make sure they succeed on this transformation. And one of things I'd like to see us and our clients talk a bit more about is the culture of their organization, how they invest in their culture.
00:18:42:18 Are they spending enough time, are they spending enough money investing in their culture? Because cultural resiliency will be what is success. I believe the return on investment in culture is going to be incredibly important going forward.
J.C. LAPIERRE:
00:18:55:03 Great advice. Tim, thank you so much for joining us today.
TIM RYAN:
00:18:59:04 Thank you, J.C., and I appreciate it. Very listening.
J.C. LAPIERRE:
00:19:01:11 Tim, it's been wonderful to hear your perspective on how businesses move forward in this very dynamic environment. And to our listeners, thank you for joining us on this episode of PwC Pulse. We would love to hear your thoughts on today's conversation. You can leave a review on your favorite podcast platform. Thank you and take care.
ANNOUNCER:
00:19:22:14 Thank you for joining us on the PwC Pulse podcast. Subscribe to PwC Pulse wherever you listen to your podcast or visit PwC.com/Pulsepodcast to hear our next episodes.
ANNOUNCER:
00:19:36:09 Copyright 2024 PwC. All rights reserved. PwC refers to the PwC Network and or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
00:19:55:00 This podcast is for general information purposes only and should not be used as a substitute for consultation with professional advisors.
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