If 2021–2023 were the years of disruption, and 2024 the year of rebalancing, then 2025 has become the year of revelation. Many CEOs entered the year believing their supply chains were more resilient, their operations more digitized and their organizations more prepared than ever for volatility. Yet what we’re seeing across industries tells a different story: Supply chains rebuilt for resilience are now exposing fragility in the balance sheet, investments in AI are generating wildly uneven returns and operational complexity is quietly eroding margins in ways that don’t show up until it’s too late.
As CEOs, we spend much of our time looking forward. But before setting direction for 2026, we need a clear-eyed view of what 2025 revealed—and what must change to protect competitiveness, investor confidence and enterprise value in the year ahead.
The Uncomfortable Truths of 2025
Several fault lines that were easy to ignore during the high-growth, high-pricing-power environment of the last few years have now surfaced with force.
1. Companies rebuilt operations, but not discipline.
During the pandemic, most organizations made sensible, urgent decisions: add suppliers, add safety stock, shorten routes, expand working capital. The problem is many never unwound those decisions. Price increases masked the true cost and complexity embedded into the system.
Across the S&P 500, a significant share of EBITDA expansion during 2021–2023 came not from efficiency, but from pricing. As pricing power receded over 2024 and 2025, the structural cost of those “temporary” decisions began to surface—and it’s still surfacing now.
Today, many companies are finding that their cost of goods sold is rising faster than at any time in recent memory. What looked like resilience on paper has created fragility on the balance sheet.
2. Deferred maintenance is no longer invisible.
Deferred maintenance is one of the biggest hidden drains on enterprise value. When budgets tighten, maintenance is often the first line item delayed. The effects are gradual—slower production, higher energy usage, creeping downtime—until the system fails hard and publicly.
The cost of deferred maintenance always comes due, and the longer the delay, the higher the bill.
3. Inventory is stranded everywhere.
We continue to see stranded inventory across nearly every sector—a byproduct of defensive pandemic-era moves: stocking ahead for volume discounts, building buffers to offset risk, placing inventory closer to customers for service assurance. Those choices made sense then. Today, they trap capital and distort EBITDA.
And while CFOs know inventory ties up cash, many underestimate how much working capital is trapped in slow-moving or misplaced stock. CEOs should be asking for a clear view of where inventory is sitting, why it’s there, and whether it reflects real demand patterns or outdated assumptions.
4. Most “digital supply chains” aren’t actually digital.
Companies believe they’ve digitized their supply chains because transaction flows run electronically. But digitizing transactions is not the same as digitizing visibility.
Data still sits in fragmented systems. Finance updates one set of numbers, procurement sees another, operations sees a third. Each function operates with partial truth, refreshed at different points in time.
This misalignment is the root of many financial and operational disconnects—and CEOs pay the price when value quietly disappears.
The AI Paradox: Billions Invested, Uneven Returns
We are now far enough into the AI cycle to see a clear pattern. Research shows that 95 percent of companies see little to no return from AI, while a small top tier captures nearly all of the value. The reasons are rarely technical. Organizational readiness, not algorithms, determines outcomes.
This year, we saw companies deploy powerful AI tools that produced enormous data, forecasts and scenarios, but lacked the leadership alignment, cross-functional decision-making or change management to convert insight into action.
Meanwhile, employees adopted AI organically. While only about 40 percent of companies formally subscribe to advanced large language models, more than 90 percent of employees use AI tools informally at work. CEOs face a critical gap: AI is happening inside your company, but not necessarily in a structured, aligned or secure way.
The firms seeing tremendous results rely on a philosophy we call Combined Intelligence: using AI for speed and scale, while relying on human expertise to guide strategy, validate insights and execute with precision. AI alone doesn’t create business value. AI + human judgment does.
Growing Pressure from Investors and Lenders
Across private equity and credit markets, scrutiny is increasing. Funders want transparency. They are looking closely at:
- Working-capital deterioration despite flat or rising revenue
- Rising receivables or unusual spikes in factoring
- Stretched payables that mask underlying strain
- Reconciliations between finance and operations that are perpetually “in progress”
These are early warning signs that value is leaking between functions, often because systems don’t talk and leadership teams are chasing different objectives.
In several recent cases, organizations only saw the real picture when a lender flagged anomalies. Complexity hides the truth; visibility reveals it.
A CEO’s Playbook for 2026
To position 2026 as a year of advantage, CEOs should focus on four priorities:
1. Create one version of truth across the enterprise. Finance, operations and procurement must operate in lockstep. The most successful CEOs establish a single view of cost, cash and service—a prerequisite for eliminating blind spots.
2. Uncover and rapidly release trapped value. Before reducing headcount or cutting strategic investments, focus on:
- Excess and stranded inventory
- Deferred maintenance
- Misaligned service levels
- Routing and transportation inefficiencies
- Aging or mispriced vendor agreements
These areas can unlock millions in EBITDA and cash flow in weeks rather than months.
3. Treat AI as a leadership imperative, not a technology project. Start with business value, not tools. Identify where decisions are slow, repetitive or dependent on backward-looking reporting—and where AI can accelerate speed, visibility and accuracy when paired with expert human oversight.
4. Rebuild supply chains for financial health, not just operational continuity. Supply chains are now balance-sheet engines. Leaders must reassess:
- What resilience actually costs
- Whether service levels match customer willingness to pay
- How demand signals distort planning and purchasing
- Where capital is tied up unnecessarily
Operational resilience without financial resilience is no resilience at all.
As CEOs look toward 2026, the mandate is clear: restore discipline, tighten visibility and bring finance, operations and technology into alignment. The companies that outperform will be the ones that treat these priorities as leadership commitments.
Three questions, in particular, are worth keeping at the top of the agenda:
- Where is complexity silently eroding value—and who owns the plan to remove it?
- How quickly can we turn fragmented data into a single, trusted view of cost, cash and service?
- Where can AI amplify human expertise to accelerate decisions, not just generate more information?
CEOs who act decisively on these questions will enter 2026 with greater resilience, clearer visibility and an operational model built for the realities of today—and the demands of tomorrow.
