The CEO Radar: 'No Regret' Moves for CEOs Facing Uncertainty (Sponsored Content)

0:00Because you're a subscriber to this Bloomberg Podcast, we thought you'd be interested in a sponsored podcast called The CEO Radar. Produced by BCG and Bloomberg Media Studios, it analyzes more than 4 ,500 Q2 earnings calls worldwide to assess what topics merit a CEO's time and attention. Here's a recent episode. Discussions about tariffs have masked growing concern by both CEOs and analysts about a possible economic downturn, the CEO Radar has found. The Radar is a tool for chief executives to compare their own agendas to those of their peers, as well as the market as a whole. To do so, it took a look at the topics that were discussed on more than 4 ,500 earnings calls in the second quarter of 2025.

0:48I'm Edward Adams of Bloomberg Media Studios. On this episode, I'm joined by BCG Global Chair Rich Lesser and Mybritt Poulsen, Global Leader of BCG's consumer and retail practice.

1:06Rich and Mybrit, welcome to the podcast. Thanks. It's great to be with you again. So to no one's surprise this quarter, the topic of tariffs dominated the conversations during earnings calls. The number of mentions of it by both CEOs and by analysts, which is our proxy for the market, rose by triple digits. But we also saw this interesting other trend occurring, which was CEOs were mentioning uncertainty and synonyms for that at an all-time high over the past decade, higher even than they did during COVID. And when we saw the mentions by analysts of things like economic slowdown, those rose by 450 % quarter on quarter this year.

1:49Rich, I'm curious whether the CEOs that you're speaking to are saying to you that they think tariffs may tip us over into a recession. Well, so first I have to say the uncertainty that came up in the analyst calls is completely aligned with what I hear in private discussions. The focus on uncertainty when you talk to CEOs, of course, the tariffs themselves have a challenge. But just trying to navigate what is going to happen, what does it mean, and what does it mean for their business? It comes up all the time. And I do think that CEOs are more anxious about the economy. Honestly, I do think it's moderated a bit in the last month or two, particularly as things with China are not to the levels they were before, but are now on a level that I think people can plan and navigate around.

2:39But the level of economic uncertainty is higher. Our own chief economist would say the odds of a recession still remain well below 50%. But the odds of a slowdown, I think, are quite likely, assuming that the tariffs remain in force to some degree, you know, in a way that's meaningfully higher than before. Maybert, what does BCG's recent survey of consumer sentiment tell us about which direction the economy is headed? So recently, we have looked into the U.S. consumers and also we have surveyed consumers in nine different European markets. Let me start with the European sentiment. Compared to last year, at the same time last year, consumers are turning more cautious.

3:21They're worried about economic uncertainty. And you see they are hunting much more for bargains. They want a good deal. So they are trading down in the market across many categories. Of course, there are some variants between the European markets. The UK consumers are worried. France, the same, whereas the Scandinavian consumer are more optimistic. We have less consumers that are worried. In the U.S., we also had recently a survey. We also looked at actual spend data. So we looked at whether what consumers are telling us mirrors how they spend their money. What we can see is the U.S. consumer is also worried.

3:59They talk about job certainty, economic certainty. They quote inflation as a key reason for more cautious spending. And they are trading down. They are looking into private label, their own label from the retailers, and also looking into bargains. They still spend on travel and technology. That has not changed. But on other household purchases, there is a tendency to trade down. That's interesting because in the radar this quarter, we found that mentions of consumer sentiment and topics like oil prices and margin rate were increasing. So that gives me an indication that at least in the C-suite and on Wall Street, there's concern at least about whether or not things are moving in the wrong direction economically.

4:46Rich, I'm curious, what are some specific moves that CEOs can take, say three things that they can do to try and insulate themselves to a degree from the uncertainty that we're facing? I think you need to think short, medium, and somewhat longer term. In the short term, this idea of a tariff command center to build a muscle in an area that historically you didn't think you needed muscle, I think is now not just a no-regret move. It's sort of a requirement to be able to navigate a world of heightened uncertainty in a new part of a cost structure that historically didn't exist before and one that we don't know if it'll stabilize or it won't.

5:26So that's almost immediate in most. And it is both looking for scenario planning and no regret actions, but it's also looking deeply at supply chain and deeply at go to market. I think the second thing that's a more medium, but medium meaning one to two years is what can we do to drive as much productivity as we can and to develop the deepest customer relationships that we can. The tools with AI and analytics to build deeper customer relationships, to build stickiness, to build trust, to bring new value to customers. And then I think slightly longer term, but two to five years, not 10 years plus, is how do we embrace AI?

6:07How do we think about where it's going to add the most value? How do we take on a couple really big things and really make them happen and show that we can drive business value with it and build a confidence and a muscle and an understanding so that then we can take on more and more areas over time rather than saying we're going to do everything at once, or we're just going to throw the tech out there and see if it works. And I think companies are going to think in those three timeframes, I think they're going to be in the best position and navigate a challenging period. It's not a guarantee. There are no guarantees.

6:38Mybert, this is particularly important for consumer products companies. I was going to say, what are you seeing there? Yeah. And I would argue, building on Rich's point, in the pandemic, supply chain diversification already started. I think there was a big wake-up call to many companies, whether it's a consumer products company or across sectors, right? So already then, we saw a lot of work by CEOs putting this on the agenda, optimizing the footprint, dual sourcing as a minimum, and not only optimizing a global supply chain for cost. So it has been underway for a long time. If you look at both the retail segment and also consumer goods companies, there is a lot of dual sourcing, diversification of sourcing strategies taking place.

7:21And the other supply chain topic that I do hear talked about in private that doesn't get as much discussion in the public domain is the challenge of navigating the U.S. workforce environment. Because we focus a lot on what's happening on the tariff and trade side. But the other big change that's happening has been, you know, the president coming through on his commitment to both stop illegal immigration and to put people out of the country who were here and an undocumented way. And I think that there was already a pressured U.S. workforce situation. This is not a new issue. But I think many companies who know based on tariffs, they want to put new production capacity in the U.S., that that's almost a no-regret move, even if we don't know exactly where tariffs land.

8:11It is hard to feel confident you're going to be able to source the workforce quality you need, that you'll get the workforce productivity you need when there's so much uncertainty on the workforce side as well. So when I talk in private to CEOs, that issue around workforce challenges they've already experienced, I tell really passionate stories about how hard it's been to get a workforce that they need, particularly for more classic blue collar jobs or infrastructure jobs, and how they're worried about that going forward and how that adds complexity to an investment decision that might otherwise seem pretty straightforward.

8:45Rich, I'm wondering whether there's anything positive that can come out of this era of uncertainty. So I continue to believe one of the biggest opportunities in the business world is personalization. And I mean that in a business-to-consumer relationship and in a business-to-business relationship. The tools to do that have never been more powerful. And actually, in uncertainty, we all value relationships more, not less. So it's not the main driver, but the technologies that exist. I'm really excited about what we can do on that front. Is there any way in which you can use these uncertain times perhaps to grow market share, for instance?

9:21There's also a lot of opportunity. Pricing strategies, AI and Gen AI powered, gives an enormous competitive advantage if you get it right. So the insight from having enormous amounts of data analyzed real time allows companies to price in a very different way than before. There were some regional differences in the radar when it comes to trade and tariffs. We saw that mentions increased three times as fast in Asia this quarter as they did anywhere else in the world. Some people lay that off to the idea that Asia will be more negatively affected by U.S. tariff regime than other places will. There is a Bloomberg U.S.

10:02tariff impact matrix, which found that the average Asian company will see its profits cut by about 10 percent under what at the beginning of June was the U.S. tariff regime in that region. My Brit, I'm wondering whether or not you're seeing anything regionally different about tariffs when it comes to Asia versus the rest of the world. I think we need to de-average the Asia question. It is true if you look at consumer goods companies who have a high exposure to raw materials and packaging from China. They are looking into diversifying sourcing, but not necessarily away from Asia. India is being mentioned.

10:40Vietnam is being mentioned. So there are many other opportunities in Asia to source where you are not necessarily hit by the current thinking on the tariff regime. So I think we need to de-average the impact. All three of us are old enough to have lived through some business cycles and periods of uncertainty. I'm curious for both of you, what are periods in the past that remind you of what we're going through today? So I think what makes this situation different than before, if you look at the dot-com bubble, if you look at the financial crisis in 2008, is that there are so many factors at play.

11:15So we look at energy prices, inflation, climate change, geopolitical uncertainty, economic uncertainty. So there are many variables that you need to navigate in as a CEO, and that makes the situation complex. That's for sure. I would say, for me, this latest challenge is really reflective of the decade we're living in. I mean, the teens, you know, we got through the great financial crisis more or less by 2010 or whatever when that decade started. It was a relatively stable period. It wasn't a particularly exciting economic period. Growth wasn't great. We had challenges. But the amount of shocks or uncertainty in that system were relatively low.

11:58And this decade, that literally started in January 2020, when COVID first started expanding around the world, has been one challenge for resilience after another, after another. COVID is supply chain shocks, inflation, wars we hadn't seen happening in a very long period of time that created other uncertainties. And of course, now all the challenges of tariffs and trade that we also hadn't seen for decades. What I observe in CEOs is building a resilience muscle that I think, frankly, people were ready to run their businesses in a very brittle way at the end of the teens, meaning push for performance, performance, performance, the risk of activist investors coming in.

12:38Everybody was on the gas pedal as much as they could to drive performance. And the threat felt like if you didn't optimize for performance, your company could be really pressured. This whole decade, I think, has taught CEOs and leaders and boards that, yes, you need performance. Of course, everybody's watching. You guys are monitoring everything. But if you're not also building for resilience, you are actually taking more risk than you realize. And I think whether we talk supply chain earlier, I think we're going to see it in other ways playing out about how you think about your investment footprint, your business footprint to create a broader base of revenues.

13:15I just think companies are thinking about resilience and leaders to a much higher degree. And so this is new in many ways, and we've talked about that, but it also builds on a trend that is very unique to this decade versus the decades that came before. Yeah. What I also think is different, Rich, that I thought about is the speed of change driven by technology. So if we look at just the last 18 months and what has happened with OpenAI, GenAI, now we talk a lot with CEOs around agents and how to build agents and how agents is going to change vertical workflows across the organization, which roles will be obsolete.

13:52It's a big struggle both to perform in the current environment, as you say, with all the variables and continue to win market share and then transform the business. And the speed of change is enormous because of technology. How do you make sure you change fast enough entire functions, as we talked about before, in multinational companies spanning many, many different countries from around the world? The level of disruption also from startups, especially driven by new technology. It's an enormous opportunity, but it's also a threat for an established player. It seems like the only thing that was certain in this last quarter was uncertainty.

14:29And it's going to be interesting to see whether or not that changes in the quarter upcoming with yet new tariff decisions on the horizon. So Rich and Maybrit, thank you very much for your insights today. It was a pleasure to be with you. Great to be here with you today. Those of you who'd like to learn more about the CEO radar, you can read the full report at bloomberg.com slash CEO Radar. If you've liked what you've heard today, you can subscribe to the podcast on YouTube or any of the podcast platforms you use. Our next episode will drop an early Q4 with a whole new batch of data. I'm Edward Adams of Bloomberg Media Studios.

15:05Thanks for listening.