• Relentless disruption has 72% of CEOs in China anxious that their company isn’t adapting quickly enough, while 87% struggle to know where to start.
  • Of the 24% of respondents in China who classify themselves as “growth leaders” -- companies which set the pace when it comes to overall growth in their industry this year – 63% are changing their business models now.

SHANGHAI (March 27, 2023) – In today’s constantly disrupted business environment CEOs are aware their companies need to adapt – and are worried about doing so fast enough – yet 87% just don’t know where to start. So finds the fourth annual AlixPartners Disruption Index, which surveyed over 600 Chinese CEOs and senior executives to identify the impact of disruption – defined as the forces that displace businesses, markets, and operating models – on their organizations. As an economic downturn looms and geopolitical crises continue to unfold, business leaders at growing companies are taking action to combat such challenges.

“China has been facing unprecedented disruptions from logistics to production all along the entire supply chain across all industries. Companies need to move decisively and seize all opportunities in the age of disruption as China continues on its road to economic recovery,” said Shiv Shivaraman, Asia Region Co-Leader of AlixPartners.

38% of business leaders are revamping their business model now, with 99% recognizing they need to change within the next three years in response to a multitude of internal and external disruptions. While supply chain and energy issues continue to present significant challenges, this year’s survey also showed that business leaders’ greatest areas of concern include:

  • Barriers to innovation: While 96% say their company has the resources needed to invest in new technology and digital solutions, 80% say their board of directors often impedes the process of deploying them.
  • Speed of technology: 65% say advancements in technology are happening at a rate their company cannot keep up with.
  • Skills crisis: 32% of business leaders in China say filling the talent pipeline at their organization will be a challenge for the foreseeable future.

In addition to these specified areas of disruption, executives recognize the threat posed by a looming global economic downturn. 77% of survey respondents in China expect a recession or economic downturn to last more than a year in their region. Layoffs have occurred at 17% of companies and almost half (43%) anticipate staff reductions or hiring pauses in the year ahead.

Growth leaders are way out in front
The growth leaders in our survey are doing just that. They are more concerned about disruptive forces hitting them and at the same time much more likely to take action, reinventing their business models, making them much more likely to overcome, harness, and in some cases, create disruptive forces rather than needing to react to them. More than 60% of them are changing their business models this year, while only 31% of their slower-moving counterparts are doing so. Growth leaders are 36% more likely to say “COVID caused short-term disruptions to their businesses and industries, but those impacts had largely gone away” as they tend to be more proactive and agile in response to COVID. They are also 13% more likely to be implementing hybrid/remote work models to address the shortage of qualified workers.

“Inflationary and supply chain pressures pose increasing challenges for companies to protect and grow margins.  The ability to prioritize operational superiority and collaboration between operations and commercial functions is critical to an organization’s success to emerge stronger in disruptive times,” said Stephen Dyer, Greater China Co-Leader of AlixPartners.

The 2023 AlixPartners Disruption Index Report is available at: disruption.alixpartners.com.

About AlixPartners
AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.

Contact:

Claire Cheung, AlixPartners
ycheung@alixpartners.com
+852 9032 9080

Louis Hung，FGS Global
Louis.Hung@FGSGlobal.com
+852 9084 1801

Kitty Lam，FGS Global
Kitty.Lam@FGSGlobal.com
+852 6306 8851