{{item.videoDuration}}
{{item.title}}
{{item.text}}
{{item.videoDuration}}
{{item.title}}
{{item.text}}
COOs eye their AI future and feel pressure to move fast
Operations leaders know they must rapidly adopt new technologies to stay competitive. More than half (54%) say increasing the use of AI and generative AI (GenAI) is a high priority, according to our June 2024 Pulse Survey. It won’t happen without the right people in place, so COOs are addressing capabilities gaps by hiring employees with necessary skills (46%) and training existing employees (46%). Also near the top of the priority list as COOs look to steady their teams and push into new technology: making operations a more strategic business partner to the CEO.
COOs race to implement and expand AI
68%
of COOs say their company is behind the competition in adopting new technologies, including AI and GenAI
Operations leaders are feeling pressure to leverage AI and GenAI in an ever-evolving race with competitors. More than two-thirds of COOs say their company is behind the competition in adopting new tech, compared to 55% of all executives and only 42% of CEOs. That could be why increasing the use of AI and GenAI is COOs’ top priority — 54% say it’s a high priority. Other priorities include strengthening talent attraction and retention along with making their function a more strategic business partner to the CEO.
Still, investments in AI and GenAI aren’t matching this prioritization. Just 36% of operations leaders say their function is investing in AI and GenAI to fill capabilities gaps, trailing other actions such as hiring and training. Many organizations may still lack the talent to make the most of technology investments, and COOs also could be struggling to get other members of the leadership team on board with AI.
In addition, some operations leaders might view AI and GenAI as replacements for tasks for which their teams are already capable. Regardless, to remain competitive, COOs should better align funding with priorities to confirm their technology is more competitive — and that they have the appropriate talent to realize its full potential.
What you can do
- As you refine your tech strategy, avoid AI for AI’s sake. Define AI opportunities that drive sustainable value and consider where new investment can fund pilot programs that can lead to developing scalable solutions.
- Develop robust ROI metrics for tech investments. The value of tech investments should be measured beyond incremental cost reductions or revenue increases. Assess how AI and GenAI are driving innovation that can boost revenue growth.
- Bring your people along on the journey. The right tech investments can’t deliver unless your teams adopt new ways of working. Begin by focusing on desired outcomes and promoting a mindset of creative thinking within your teams, envisioning the potential solutions AI can offer.
Get more on this topic
- Executives are increasingly optimistic about the business environment and their companies’ ability to mitigate risk. Find out more.
- What are the top strategic priorities for sector executives?
- What else is important to COOs right now?
COOs spend on hiring and training talent
46%
of COOs are training existing talent to address capabilities gaps
COOs may see technology as a critical, immediate need, but when it comes to filling capabilities gaps, more operations leaders are investing in the human element. That means hiring employees with necessary skills and training existing team members — each chosen by 46% of COOs. Companies need the right people to help steer them to a future with AI.
If they can’t employ them directly, operations leaders aren’t afraid to look outside their own walls. Thirty-nine percent are engaging third-party providers to supplement skills, and 38% are exploring external strategic business partnerships.
What you can do
- Bucket your capabilities gaps by what it will take to solve them. Think strategically about talent and technology, both internally and outside your organization.
- Challenge traditional views of what worked in the past. Think of opportunity through the lens of your total ecosystem of capabilities — no matter who specifically provides them. Leverage the full breadth of that ecosystem to improve tangible outcomes.
- Embrace new ways of working — and provide training. New technology often requires different ways of working. Determine what your teams need to guide digital efforts in different parts of operations and expand training across functions.
COOs struggle to find time for long-term strategy planning
61%
of COOs say day-to-day operations prevent their company from focusing on the future vision
COOs continue to be leaders of controlled chaos — managing many short-term challenges often at the expense of thinking long term. They’re more confident in their ability to address temporary disruptions like weather events, port closures, utilities outages and supplier disruption, with 44% strongly agreeing that they’re well prepared to do so. Only 33% say the same about long-term disruptions like military conflicts, climate change or resource scarcity.
It's no surprise, then, that 61% of operations leaders say day-to-day operations prevent their company from focusing on the future. That’s one of the highest responses among C-suite leaders, and it emphasizes the need for operations leaders to find time for planning — regardless of the tasks already on their plate. If they don’t, they risk making short-sighted hires and strategic missteps that they may need to undo as time goes on.
What you can do
- Address both the long term and short term in concert. Avoid thinking of long-term versus short-term challenges and opportunities. Understand you can and should tackle both together — and more innovatively than before.
- Prioritize strategic thinking about new business models. This can help you proactively navigate market shifts, drive operational efficiencies and capitalize on new growth opportunities, enabling the organization’s sustained success in a rapidly changing business landscape.
- Don’t let disruption define your risk management. Review your current tech capabilities to determine which ones can move operations beyond immediate turbulence and help evolve your overall supply chain network. Leverage evergreen simulation and digital twin models to help scenario planning for long-range risks.
COOs focus primarily on the CEO
45%
of COOs say making their function a more strategic business partner to the CEO is a high priority
Operations leaders need buy-in from the top of their organization, and they know it. It’s no wonder that 45% say creating a more strategic partnership with the CEO is a high priority, and 35% seek to expand their function’s influence across the entire C-suite. One reason could be that many C-suite members are in quiet competition with each other to pull the organization in their desired direction — while putting a stamp on their resumé to be the next top dog.
This may be a disconnect that COOs should consider remedying. COOs and CMOs, for instance, often approach goals from different ends of the spectrum. One often concentrates on controlling costs while the other is focused on selling. But we found these leaders are more aligned in their priorities than they may think. It’s CMOs who most closely mirror operations leaders on things like positioning the company competitively through technology and fundamentally changing the business model.
What you can do
- Look beyond your fiefdom. With customers increasingly expecting an end-to-end experience, explore common challenges, priorities and opportunities with other functions. That might include collaboration possibilities when it comes to new tech adoption and investment.
- Don’t go it alone with data. We’re still scratching the surface on data-driven insights, and it’s important to draw the line of addressing customer preferences and demands across different functions versus wading through data alone. Coordinate with the CMO and risk leaders to help enable compliance with appropriate privacy regulations.
- Position and measure the operations value chain as driving growth, not just as a cost center. Determine if you have the right team to improve not only day-to-day performance but innovation as you advocate for your supply chain as an advantage instead of only a service provider.
Get access to the complete survey response data and future insights
View the main Pulse Survey
Finding opportunity in reinvention
About the survey
Our latest PwC Pulse Survey, fielded May 15 to May 22, 2024, surveyed 673 executives and board members from Fortune 1000 and private companies about the current business environment, the risks executives are facing and their company’s strategic plans and priorities. Of the respondent pool, 80 were COOs and operations leaders.
Past surveys
{{filterContent.facetedTitle}}
{{contentList.loadingText}}
{{contentList.loadingText}}
Contact us
Follow us
