If 2021-2023 was a year of disruption and 2024 a year of rebalancing, 2025 will be a year of revelation. Many CEOs entered the year believing that their supply chains were more resilient, their operations more digital, and their organizations better prepared for change than ever before. But what we're seeing across the industry tells a different story. Supply chains rebuilt for resilience are now exposing balance sheet vulnerabilities, investments in AI are yielding 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 a lot of our time looking to the future. But before setting a course for 2026, we need to take a clear look at what 2025 revealed and what must change to protect competitiveness, investor confidence, and company value next year.
The unpleasant truth of 2025
Several fault lines that were easy to ignore in the high-growth, high-price power environment of the past few years are now coming to the surface with force.
1. Companies restructured operations, but not discipline.
During the pandemic, most organizations made smart and urgent decisions such as adding suppliers, adding safety stock, shortening routes, and increasing working capital. The problem is that many people never roll back those decisions. The price increases have masked the true cost and complexity built into the system.
Across the S&P 500, a large portion of the EBITDA expansion from 2021 to 2023 was due to pricing, not efficiency. As pricing power receded into 2024-2025, the structural costs of these “temporary” decisions began to surface, and are still surfacing today.
Today, many companies are finding that their cost of goods sold is rising faster than at any time in recent memory. While it looked resilient on paper, it is now vulnerable on the balance sheet.
2. Deferred maintenance is no longer displayed.
Deferred maintenance is one of the biggest hidden losses in business value. When budgets are tight, maintenance is often the first item to be delayed. The effects occur in stages, including reduced production rates, increased energy usage, and increased downtime, until the system is severely and publicly compromised.
There are always costs for deferred maintenance, and the longer it's delayed, the higher your bill will be.
3. Inventory is stuck everywhere.
Inventory backlogs continue in nearly every sector, a byproduct of pandemic-era defensive moves. That means pre-stocking for volume discounts, building buffers to offset risk, and placing inventory closer to customers for service guarantees. At the time, those choices made sense. Today they lock up capital and distort EBITDA.
And while CFOs know that inventory is tied to cash, many CFOs underestimate how much working capital is locked up in slow-moving or misplaced inventory. CEOs should demand a clear understanding of where inventory is, why it is there, and whether inventory reflects actual demand patterns or old assumptions.
4. Most “digital supply chains” are not actually digital.
Companies believe that their supply chains have become digital as trade flows are carried out electronically. But digitizing transactions is not the same as digitizing visibility.
Data still resides on fragmented systems. Finance updates one set of numbers, procurement reviews another, and operations reviews a third. Each function operates on partial truths and is updated at different times.
This mismatch is the root of many financial and operational disconnects, and when value quietly disappears, CEOs end up paying the price.
The AI paradox: Billions of dollars in investments, uneven returns
The AI cycle is now quite advanced and we can see clear patterns. Research shows that while 95% of companies expect little or no benefit from AI, the smaller top tier captures nearly all the value. The reasons are rarely technical. It is the organization's readiness, not the algorithm, that determines the outcome.
This year, companies deployed powerful AI tools to generate vast amounts of data, predictions, and scenarios, but lacked leadership alignment, cross-functional decision-making, or change management to turn insights into action.
Meanwhile, employees adopted AI organically. Although only about 40% of companies formally subscribe to advanced large-scale language models, more than 90% of employees informally use AI tools at work. CEOs face a critical gap. AI is being deployed internally, but not necessarily in a structured, coordinated, and secure manner.
Highly successful companies rely on a philosophy we call “Combined Intelligence.” This means using AI to achieve speed and scale, while relying on human expertise to guide strategy, validate insights, and execute with precision. AI alone does not create business value. AI + human judgment is possible.
Increased pressure from investors and lenders
There is increased scrutiny across private equity and credit markets. Funders want transparency. They carefully observe the following points:
- Working capital deteriorates despite flat or increasing revenue
- Increase in accounts receivable or unusual spike in factoring
- Expanding accounts payable to mask potential burdens
- Coordination between finance and operations is always “in progress”
These are early warning signs that value is leaking between features. This is often due to systems not communicating and management pursuing different goals.
In some recent cases, organizations only became aware of the actual situation when financial institutions reported anomalies. Complexity hides truth. Visibility reveals it.
CEO strategy for 2026
To position 2026 as a lucrative year, CEOs must focus on four priorities.
1. Create one version of the truth across the enterprise. Finance, operations, and procurement must work together. The most successful CEOs have established a single view of cost, cash, and service. This is a prerequisite for eliminating blind spots.
2. Uncover trapped value and release it quickly. Before cutting headcount or reducing strategic investments, focus on the following:
- Excess inventory and stuck inventory
- deferred maintenance
- Service level gap
- Routing and transportation inefficiencies
- Vendor contract expiration or pricing error
These areas can deliver millions of dollars 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 decision-making is slow, repetitive, or dependent on forward-looking reporting. It also identifies where AI can accelerate speed, visibility, and accuracy when combined with human expert oversight.
4. Restructure the supply chain not only for business continuity but also for financial soundness. The supply chain is now a balance sheet engine. Leaders need to reevaluate:
- The real cost of resilience
- Does the service level match the customer's willingness to pay?
- How demand signals distort planning and purchasing
- When capital is unnecessarily tied up
Without financial resilience, operational resilience is no resilience at all.
As CEOs look to 2026, their mission is clear. It's about restoring discipline, increasing visibility, and aligning finance, operations, and technology. The best performing companies will be those that treat these priorities as leadership initiatives.
In particular, the following three questions are worth keeping at the top of your agenda:
- Where is complexity quietly eroding value, and who has a plan to remove it?
- How quickly can you transform fragmented data into a single, authoritative view of cost, cache, and service?
- Can AI not only generate more information but also augment human expertise and accelerate decision-making?
CEOs who act boldly on these questions will enter 2026 with greater resilience, clearer visibility, and an operating model built for today's realities and tomorrow's demands.
