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CEOs today are continuing to manage through the age of compound volatility, the combination of near-term risks and structural changes to the U.S. economy that raise business costs with little margin for error on strategy development and execution.

CEOs are applying a strategic lens to tackle both near-term risks to growth they see such as geopolitics and cyber, and structural changes like new regulations including climate disclosure rules and tax policy, making adjustments to investments, supply chains and operations as needed – with many turning to generative AI (GenAI) to help do so.

They see GenAI as central to overcoming challenges resulting from compound volatility and gaining a competitive advantage and are working to rapidly advance its deployment across their enterprises in a responsible way to deliver productivity gains, re-shape business models and create new revenue streams. The implementation of initiatives to promote the responsible and ethical use of AI such as the use of watermarks/disclosures of AI use, data privacy measures, ethical frameworks and third-party reviews is a focus – and security is top of mind. Business leaders are investing in GenAI training and capability building to upskill their people. They recognize workforce adoption will ultimately drive success with GenAI.

CEOs also are addressing another structural change – tight labor markets. With demographic shifts only beginning to take hold, the impact of tight labor markets on strategy will increase exponentially in the years to come. CEOs report they are addressing this challenge today by upskilling employees, using GenAI to fill talent gaps and dropping college degree requirements for certain jobs.

The mental well-being of the workforce and preventing burnout remain priorities. In the ongoing future of work debate, the pendulum is swinging back to hybrid work as CEO expectations for a full return to office decline.

When it comes to driving growth, CEOs are still interested in transformative M&A. But the majority say their organizations will wait until later this year or 2025 to seriously pursue new deal making.

In this era of compound volatility, it’s clear that many CEOs are anticipating and outpacing the resulting risks by living their values, acting with purpose and pairing long-term investments with a focus on GenAI and the agility it can create for an organization to take advantage of new opportunities and overcome challenges.