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In brief:
For much of the past two years, boardroom conversations have been dominated by geopolitical disruption.
Trade tensions, supply chain fragility, conflict, inflation and political uncertainty have shaped executive decision-making across industries. The expectation was that these issues would remain front and centre for CEOs for some time.
Yet the latest EY-Parthenon CEO Outlook Survey suggests something important is changing.
While geopolitical uncertainty has not disappeared, Australian business leaders are becoming less focused on external disruption and increasingly focused on the factors they can control. The conversation is shifting towards productivity, workforce capability, organisational resilience and long-term growth.
That shift matters.
It suggests Australian CEOs are moving from a defensive mindset to a more deliberate discussion about competitive advantage.
The most striking finding from the survey is not that concern about geopolitical tensions has fallen significantly since May, but what has replaced that concern.
Regulatory uncertainty, macroeconomic volatility and workforce capability have moved up the executive agenda. While these concerns may appear quite different, they share a common theme: each requires leaders to improve how their organisations operate, adapt and create value.
In many ways, this reflects a broader maturation in executive thinking about technology and transformation.
The AI conversation provides a good example.
For the past two years, executives have understandably focused on understanding the implications of AI and determining whether they needed to invest. That debate is effectively over. Most leaders have already decided that AI will be fundamental to future competitiveness.
The more important question today is whether those investments are generating measurable returns.
Australian organisations appear increasingly confident in their ability to answer that question. More than half of CEOs say they can assess AI return on investment with confidence.
Yet there is an interesting tension within the findings.
While organisations are becoming more sophisticated in measuring AI expenditure, relatively few Australian CEOs identify AI-enabled tools as one of the biggest contributors to productivity gains achieved during the past year.
That gap should give leaders pause.
Technology investment alone does not create value. Productivity improvements are created when technology is embedded into workflows, operating models and decision-making processes. Many organisations are still early in that journey.
The lesson here for CEOs has become clearer over the past 12 months. Leaders now know that AI is not a technology strategy. It should be viewed as a business strategy.
The organisations that realise the greatest value from AI will not necessarily be those spending the most. They will be those that redesign processes, simplify complexity, improve decision-making and enable their people to work differently.
That brings us to perhaps the most significant finding in the survey.
Australian CEOs increasingly believe the biggest constraint on growth will not be access to capital. It will be access to skills. This represents a fundamental shift in thinking.
Historically, growth has often been framed as a capital allocation challenge. If organisations had sufficient investment capacity, growth opportunities could be pursued.
Today, many leaders are questioning whether they have the workforce capability required to execute those ambitions.
The challenge is not simply attracting talent. It is developing new capabilities at speed.
Importantly, the survey suggests CEOs understand that AI is unlikely to reduce the importance of people. Instead, it will redefine the skills organisations need and how work is organised.
That distinction is critical.
Some of the most successful organisations will ultimately operate with leaner structures. However, the real opportunity is not workforce reduction. It is workforce reinvention.
As technology automates routine tasks, competitive advantage will increasingly come from uniquely human capabilities: judgement, creativity, leadership, relationship building and strategic problem-solving.
The organisations that succeed will be those that invest in both technology and people.
One without the other is unlikely to deliver sustainable growth.
The survey also points to a broader reassessment of organisational resilience.
For decades, efficiency was often the primary objective of corporate strategy. Global supply chains were optimised around cost and scale.
Increasingly, executives are recognising that resilience carries its own value.
We see this reflected in changing approaches to supply chains, portfolio management and transaction activity. Leaders are becoming more selective about where they invest, more deliberate about where they focus management attention and more disciplined about how they create value.
Encouragingly, this does not appear to be resulting in reduced ambition.
If anything, Australian CEOs appear increasingly confident about growth opportunities. But the growth agenda looks different from previous cycles.
Rather than pursuing growth at any cost, leaders are concentrating on customer experience, productivity, capability and resilience. They are asking harder questions about where they can genuinely differentiate and where investment will generate measurable returns.
That is a healthy evolution.
The reality is that uncertainty will remain a constant feature of the business landscape. Geopolitical instability, technological disruption and economic volatility are unlikely to disappear.
The leaders who succeed will not be those who attempt to predict every external shock.
They will be those who build organisations capable of adapting regardless of what comes next.
That means creating value from AI rather than merely investing in it. It means building workforce capability rather than assuming technology will solve talent challenges. And it means focusing on resilience and productivity as foundations for long-term growth.
The survey suggests many Australian CEOs are already moving in that direction. The question now is how quickly they can turn that intent into results.
