Recent Searches
The CEO Imperative Series
As CEOs look ahead to 2026, one thing will be consistent with 2025: the need to adapt and continue transforming to help navigate a volatile and changing environment.
Persistent geopolitical uncertainty and uneven economic momentum are intensifying the imperative to reimagine the enterprise — further and faster — including accelerating progress along the artificial intelligence (AI) adoption curve to enhance organizational adaptability. Even as CEOs temper their global outlook, they remain confident in their ability to transform at speed and create sustainable advantage.
While volatility will persist into 2026, many companies believe they have laid the foundations for AI-driven transformation and digital resilience. Portfolio reshaping, strategic deals and efficiency programs — often powered by AI and automation — are now giving CEOs a stronger baseline to navigate disruption with confidence.
Yet the challenges ahead demand even greater discipline. Slow and fragile economic growth will force leadership teams to make sharper choices about where and how to deploy investments. In terms of AI, broad experimentation is giving way to targeted scaling — identifying the business units where AI can accelerate productivity, transform decision-making, or unlock differentiated customer value. The key tension for 2026 is balancing short-term cost pressure with long-term competitiveness.
Geopolitical fragmentation continues to heighten complexity and urgency. As trade alliances and supply chains shift, CEOs must decide where to pursue growth — and where to optimize flexibility and manage risk, often pulling back from some markets while doubling down on others. Despite these complexities, 2026 is a pivotal time: companies that align capital allocation, transformation priorities and AI scaling through a geographic lens will be best placed to outpace competitors as conditions improve. The year ahead is unlikely to be benign, but it brings a clearer direction: flexibility built through sharper portfolios deliberately designed for uncertainty and a renewed commitment to transformational innovation in a world being reshaped by intelligent technology.
In this edition:
Chapter 1
CEO Outlook 2026 shows leaders facing slower growth and rising costs while doubling down on talent and AI-driven productivity to generate self-made momentum and resilience.
This latest EY-Parthenon survey of 1,200 CEOs shows a softening in executive confidence. Overall sentiment declined from 83.0 to 78.5, reflecting growing unease about the pressures shaping today’s business landscape. The most significant concerns are around global economic growth, as leaders reassess demand expectations in an environment marked by geopolitical tensions, supply chain realignments, and slowing activity. This aligns with EY-Parthenon’s global economic outlook (via ey.com US), which expects global real GDP growth to ease from 3.3% in 2025 to 3.1% in 2026.
Compounding this macro uncertainty is a dip in CEOs’ confidence in their ability to manage rising operating costs, particularly energy, labor and compliance. Many also express reduced optimism about their ability to pass these higher costs on to customers, signaling weakening pricing power as consumers and businesses become more value sensitive.
This again aligns with EY-Parthenon outlook, with global inflation continuing to ease but remaining highly divergent. Tariff-imposing economies are expected to see higher import costs and renewed price pressures, while targeted economies will continue to experience demand- and commodity price-driven disinflation.
Yet confidence remains resilient in two critical areas: talent and technology. CEOs continue to feel assured about attracting and retaining key capabilities, reflecting the maturing of hybrid work models, clearer employee value propositions and continued investment in skills. Equally, confidence in emerging technologies, including AI, automation and advanced analytics, remains strong, reflecting the transformative potential for productivity, customer experience, and long-term competitiveness.
To navigate this uncertainty, CEOs should focus on three priorities: sharper cost discipline through productivity-driving investments such as AI; more precise pricing grounded in customer insight to protect margins; and a faster shift to skills-powered organizations, with teams equipped to scale new technologies and manage geopolitical and macro volatility.
The message is clear — CEOs who double down on people and technology while addressing cost and growth pressures head on will be best placed to create their own momentum in a challenging year ahead.
CEOs enter 2026 with a paradoxical mindset: confident in their own prospects, less so in the global economy. Despite geopolitical tensions, sluggish global growth and supply chain instability, a strong majority of CEOs — around nine in 10 — anticipate growth across revenue, profitability, and productivity in 2026. This divergence reflects a belief that, despite external pressures, organizations can take decisive actions to strengthen performance from within and effectively navigate external challenges.
However, this optimism is tempered by rising cost pressures. In 2026, a significant 61% of CEOs expect higher business costs, while only 16% anticipate reductions — signaling a structural shift rather than a temporary inflation spike. Inputs such as labor, energy, technology, regulatory compliance, and financing remain elevated, and many of these pressures are likely to persist.
How EY-Parthenon can help
EY-Parthenon teams design, develop and deliver strategy, transactions and transformations to help CEOs create new value.
Read moreThis environment demands a more proactive and interventionist approach from CEOs. Confidence in revenues and profitability suggests leaders believe they can unlock growth through pricing strategies, customer differentiation, portfolio optimization and investments in digital transformation. Expected productivity gains reinforce this, underscoring technology — especially AI, automation and data-driven redesign — as a key lever to offset cost inflation.
The 2026 confidence gap reflects CEOs’ belief in self-driven growth and operational control, contrasted with global uncertainty from geopolitical fragmentation, uneven regional recovery and trade frictions. The challenge is to execute with precision: doubling down on efficiency programs, scaling technology that delivers real productivity uplift, rebalancing portfolios toward higher-margin opportunities and redesigning operating models to be more agile. Those who succeed will translate internal confidence into tangible performance, even amid challenging macro conditions.
In this period of heightened geopolitical, economic and technological uncertainty, transformation has become essential for companies seeking to remain competitive and resilient. The majority of CEOs now report that they are either in the midst of a significant enterprise-wide transformation initiative (52%) or plan to begin one in 2026 (45%).
Their priorities reveal the scale and breadth of change required. Globally, 43% of CEOs identify optimizing operations and improving productivity, including digitalization, as their top desired outcome, highlighting the urgency of reshaping cost structures and unlocking efficiencies. At the same time, 40% prioritize customer engagement and retention to stabilize demand as consumer behaviors shift rapidly.
Innovation remains a central priority, with 37% of CEOs focused on enhancing products and processes, and 36% targeting faster top-line growth despite muted macro tailwinds. Alongside cost reduction, employee engagement and retention, sustainability and business model reinvention, these priorities show that reimagining the enterprise now spans everything from operations and culture to strategy and growth.
Delivering on these ambitions requires a transformative mindset: continuous reinvention rather than one-off change. In a structurally uncertain environment, leading CEOs will act on imperfect information, experiment and scale quickly, reallocate capital and talent dynamically, and learn through iteration rather than waiting for certainty.
A transformative mindset also involves shifting from defensive reactions to proactive value identification, orchestration, and realization.
Building new capabilities, strengthening differentiation, and generating self-made growth are all key. This value creation includes embedding AI and digital tooling across operations to accelerate productivity, fostering innovation at pace, and redesigning organizational structures to be more agile and collaborative.
Key questions and considerations for CEOs
Chapter 2
CEOs are moving from AI experimentation to disciplined scaling, embedding generative AI, automation, and data across the enterprise to drive adaptability and competitive advantage.
Even though CEOs tend to be more optimistic than others, their outlook is clearly shifting. While some commentators might declare that AI investment is overheating, the experience of surveyed CEOs paints a very different picture — one in which AI is already delivering results above expectations and strengthening organizational adaptability in a rapidly shifting world.
The vast majority of CEOs report that their AI initiatives have met or exceeded expectations, with only a small minority falling short of targets. This points to AI becoming an increasingly reliable driver of productivity, revenue growth, customer experience and operating model efficiency. Notably, the greatest value is likely to be accrued by the 20% of organizations whose AI investments are already delivering significantly above-expectation returns.
How EY-Parthenon can help
AI strategy consulting teams can enable better and faster ROI for new products and services and help accelerate M&A. Find out more.
Read moreMany AI deployments demonstrate solid economic fundamentals: automation of routine work, faster and more accurate forecasting, improved risk detection, accelerated product development, and enhanced decision-making across the value chain.
In 2025, AI spending was centered on major capital investments in hyperscalers, data centers, and the infrastructure that enables AI at scale. But AI may be entering a phase of disciplined scaling, where productivity improvements justify continued investment and expectations mature.
For strategic planning, the implications are clear. AI will become a core capability, not a peripheral experiment. CEOs will need to treat AI as a multi-year strategic pillar — embedded in workforce planning, capital allocation, and operating model design. With many early benefits in sight, focus is likely to shift from proliferating pilots to scaling what works, prioritizing depth over breadth by embedding AI across critical value chains to capture enterprise-wide productivity. In addition, the strong performance of AI initiatives may intensify competition. As more companies realize improving returns, laggards risk falling further behind, triggering accelerated investment cycles. Finally, confidence in AI outcomes encourages CEOs to pursue bolder transformation agendas, using AI not only to optimize current operations but also to reshape products, services, and business models.
CEOs are clearly signaling their expectations of AI impact on their business model or operations over the next two years. Expectations are front-running experience, with a clear majority anticipating a significant impact.
At 54%, generative AI (GenAI) tops the list of transformative technologies, selected by over half of CEOs, reflecting how rapidly it has moved from experimentation to enterprise integration, particularly across content generation, coding, customer engagement, and knowledge-intensive workflows.
Machine learning follows closely (45%), remaining the analytical backbone for prediction, forecasting, and decision intelligence. Together, these technologies show that companies are balancing the new with the proven.
At the same time:
Overall, the evidence points to a meaningful and structural shift: companies are moving from isolated AI use cases to integrated AI systems that could reshape workflows, automate decisions, and augment human capability at scale. AI is no longer simply an efficiency tool — it is becoming a strategic engine for transformation, adaptability, and growth.
Key questions and considerations for CEOs
Chapter 3
Geopolitical fragmentation is reshaping strategy as CEOs use AI, partnerships, and supply chain diversification to manage risk, improve agility and pursue growth in a divided world.
CEOs are showing greater intent in navigating an increasingly uncertain global environment, with AI central to their strategy. Rather than waiting for stability, they are acting decisively in the face of sustained disruption to business as usual. Of the 83% that have adapted their strategic investments over the past 12 months in response to geopolitics and trade policy developments, 40% have accelerated an investment. Other actions, such as relocating operational assets or shifting suppliers, highlight this proactive attitude. Notably, fewer CEOs report stopping or delaying investments, reinforcing a disciplined approach to building resilience and opportunity into global operating structures.
CEOs identify five key strategies to navigate today’s fractured global environment and accelerate organizational growth.
How EY-Parthenon can help
The Geostrategic Business Group can help translate geopolitical insights into business strategy to help manage political risk. Find out how.
Read moreThe growing strategic importance of digital technology will lead governments to implement more policies and regulations to control their digital spaces. In response, companies will need to continuously assess their digital dependencies and develop strategies that enhance their resilience and control over digital assets. This involves understanding the critical services essential for business operations and evaluating dependencies across infrastructure, software, data, and expertise.
Geopolitical dynamics are creating a set of operational challenges that require adjustments in how the business operates. Perhaps most significantly, as data becomes both a strategic asset and a point of geopolitical friction, new regulations and restrictions affect how companies collect, transfer and utilize information.
The forced fragmentation of the digital economy undermines efficiency, raises compliance costs, and creates barriers for seamless global operations. For AI in particular, export restrictions on advanced models and cloud computing resources are reshaping strategies, with firms wary of sharing sensitive intellectual property across borders. The result? An increasingly splintered digital ecosystem that raises operational costs and slows innovation diffusion even within companies.
More broadly, the geopolitical landscape is marked by trade realignments, regulatory divergence, and strategic competition, all of which can rapidly reshape market access, supply chains, and data governance. By strengthening policy foresight, engaging regulators and stress-testing trade and technology scenarios, companies can reduce disruption and seize emerging opportunities. Importantly, CEOs are often spectators of these policy shifts: most have little ability to shape policy. But data and AI can provide control over how CEOs respond. By embedding AI into planning, risk management, and execution, CEOs can turn uncertainty into a managed strategic variable rather than an existential threat.
Key questions and considerations for CEOs
Chapter 4
M&A is a catalyst for transformation, enabling CEOs to accelerate digitalization, unlock growth and embed new capabilities faster than organic change.
Merger and acquisition (M&A) 2025 activity was marked by a resurgence, defined by both scale and breadth. The year saw a near-record number of deals over US$5b, signaling a renewed confidence among large corporates and investors to commit capital to transformative, category-shaping transactions. While the US has led global dealmaking, buoyed by strong corporate balance sheets and favorable financing, the momentum is not confined to a single geography.
Similarly, although technology remains the largest and most dynamic sector, fueled by demand for AI capabilities, digital infrastructure, and next-generation platforms, the rebound in deal activity is broad-based, extending into healthcare, energy, industrials, consumer goods, and financial services. This diversification reflects growth ambitions and strategic repositioning as companies adapt to a shifting landscape.
Looking into 2026, we anticipate the continuation of a strong deal market. The survey shows that the 53% of CEOs intending to pursue acquisitions in the next 12 months are seeking outcomes strategically aligned to their enterprise-wide transformation agendas.
How EY-Parthenon can help
Learn how EY-Parthenon M&A Advisory Services teams can help enable strategic growth through integrated M&As, joint ventures and alliances.
Read moreAt the top of the agenda, 50% of CEOs cite operational optimization and productivity gains — including digitalization — as the primary objective of an acquisition, mirroring the broader priority to enhance efficiency. This alignment underscores the growing view that M&A is not simply a route to scale, but a catalyst for accelerating operational modernization and embedding advanced technology capabilities more rapidly than organic investment.
Similarly, 45% of CEOs prioritize accelerating top-line growth through acquisitions, reflecting a desire to expand into new markets, strengthen competitive positioning, and capture demand adjacencies. This mirrors transformation programs that seek not just efficiency, but growth through innovation and portfolio evolution. Improving customer engagement and retention, reducing costs and enhancing product and process innovation also echo the broader transformation ambitions of reshaping customer experience, optimizing cost structures, and fostering innovation at scale.
What distinguishes M&A is the speed at which these outcomes can be realized. Organic transformation, while essential, often requires years of investment, cultural change, and technology deployment before measurable results materialize. By contrast, a well-targeted acquisition can deliver capabilities, talent, technology, and market access quickly — effectively pulling forward the benefits of transformation.
Whether it is acquiring an AI-native business to accelerate digital transformation, buying into a high-growth segment to boost revenue, or integrating a company with superior operational practices, M&A enables companies to compress timelines and overcome internal constraints.
However, realizing these advantages depends on integration intentionality from the earliest stages of the deal lifecycle — ensuring that value drivers are clearly articulated, rigorously tracked and actively managed from diligence through execution. Early focus allows efficiencies and synergies to be identified, measured, and captured, rather than assumed.
Moreover, acquisitions allow CEOs to import proven models rather than build them from scratch, reducing execution risk and enabling faster innovation, accelerated digitalization, and immediate synergies — offering a strategic shortcut to transformation when opportunity windows are narrow.
In this way, M&A becomes an extension of the transformation agenda: a tool to advance strategic priorities faster, more decisively, and with greater competitive impact.
CEOs are also increasingly turning to joint ventures and strategic alliances as complementary pathways to transformation. Survey data shows that 79% of CEOs plan to pursue such initiatives in 2026, up from 62% in 2025 — a sharp rise that underscores the appeal of partnerships in unlocking access to new capabilities. These collaborations offer a pragmatic route to accelerate innovation and share risk, enabling companies to advance strategic priorities without the full capital commitment of an acquisition. In this way, alliances and JVs are emerging as critical levers for speed, flexibility, and adaptability in an environment where transformation cannot wait.
Since 2016, cross-border M&A has steadily lost share as rising jurisdictional friction has reframed the strategic benefits of doing deals abroad. Geopolitics has become a central deal variable: US-China tensions, sanctions regimes and supply chain de-risking have made foreign acquirers more likely to face political resistance, longer timetables, and higher execution risk.
Many countries have expanded national security and foreign investment screening, pushing more transactions into mandatory review, widening the definition of “sensitive” assets, such as data, semiconductors, AI, critical infrastructure, and increasing remedies such as governance controls, localization requirements, or forced divestitures. In addition, uneven post-pandemic recoveries and higher interest rates have favored domestic consolidation and reduced appetite for complex multi-regulator processes. Finally, antitrust enforcement has become more interventionist in several major jurisdictions with cross-border deals increasingly subject to parallel filings that impact timing.
Perhaps surprisingly, cross-border M&A in 2025 withstood these geopolitical pressures. The US was still by far the most attractive destination by both value (30% of all cross-border deals) and volume (17%), But both metrics declined on 2024 share, and share of value was sharply down from 2016 (38%).
The responses by CEOs as to their intended investment destination may indicate this is a trend that will continue.
While the US remains the top destination, it has lost some of its outsized appeal. It is no longer in the top five countries for intended investment for CEOs based in Asia, and has declined in ranking across most other countries, including in Europe.
|
January 2026 |
January 2025 |
|---|---|
|
|
|
January 2026 |
January 2025 |
|---|---|
|
|
|
January 2026 |
January 2025 |
|---|---|
|
|
Increasing levels of governmental oversight and high-profile political interventions have made some CEOs more wary of pursuing some international deals. The focus on localization and regionalization highlighted in the September 2025 survey looks likely to extend into cross-border dealmaking.
Key questions and considerations for CEOs
CEO Outlook 2026 highlights a clear message: sustained transformation will separate leaders from laggards in an uncertain global environment. Geopolitics and technology are reshaping the global economy and business environment faster than ever. Those who invest intentionally, rethink their operating models and use AI and M&A to accelerate change will create their own tailwinds and outpace competitors long before the environment stabilizes.
Related content
Top 10 geopolitical developments in 2026
Geopolitical volatility and uncertainty will persist in 2026. There are three geostrategic actions to build resilience and set strategy. Learn more.
Rivada is reimagining wireless internet as a commodity
By leveraging AI and automation, patient diagnostics have picked up pace in a health care testing company. Learn more in this case study.
Transact to transform: How a human focus can unlock deal value
Transactions which have a bold vision, prioritize the workforce and set conditions to navigate hurdles are more likely to transform a business. Learn more.
