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Tariffs highlight COOs’ balancing act of reaction and reinvention
Chief operations officers (COOs) are under pressure to transform their organizations while navigating ongoing complexity, but many are running into execution challenges. Talent retention tops the list, while siloed teams and fragmented systems make it harder to deliver on strategy. According to our May 2025 Pulse Survey, many COOs are still relying on surface-level fixes, even as 85% say tariffs represent a structural shift in global trade, not just a temporary disruption. That disconnect is raising real concerns about whether today’s supply chain networks and the interconnection of technology, data and operating models are ready for what’s next.
Strategic execution hinges on talent, technology and teamwork
COOs are often tasked with driving reinvention while operating within legacy constraints. Among barriers to delivering on their operations strategy, talent retention and skill shortages is most common — 46% say it’s a top-3 obstacle — followed by sourcing challenges, limited collaboration across different operational and supply chain functions, and resource constraints.
These hurdles can lead COOs to make tradeoffs that defer long-term transformation for near-term continuity. The problem isn’t just execution — it’s energy. Internal alignment and limited visibility across operations can compound issues and hinder employee engagement. COOs should be vigilant in how they can unlock trapped capacity, orchestrate collaboration across functions and prioritize digital and workforce capabilities equally.
Why COOs must rethink operating models for trade policy disruption
Most operations leaders feel ready for trade policy changes — 89% say they have the capabilities. And many are making smart moves, with 87% ramping up digitization and scenario planning. But here’s the catch: 83% say they’re addressing tariff impacts without changing their business partners or operating model. That might’ve been enough in the past, but in a world where trade disruption could be here to stay — and where tariff changes can trigger a chain reaction across supply chains, tax, customs and commercial decisions — it’s just tweaking around the edges.
That confidence starts to look a little shaky when COOs say they don’t think their suppliers are nearly as ready. In fact, 85% say their suppliers aren’t prepared for the impact of tariffs. And with 83% of operations leaders expecting most of their supply chains to be restructured in the next three years, that raises questions about how stable their ecosystems really are. To get ahead of the curve, some companies are starting to use digital twins and planning tools to run what-if scenarios and see how their supply networks would hold up under stress. They’re also taking a hard look at their operating models and asking whether they’re built to adapt, not just react.
What you can do
- Assess supplier resilience and restructure proactively. With many COOs concerned about their suppliers, consider investments in supplier diversification, digital twins and other moves that can create a more shock-absorbent ecosystem.
- Connect short-term continuity and value capture with long-term transformation. Given the pressure to keep businesses running amid resource constraints and legacy systems, establish dual-track plans that enable incremental improvements today while laying the groundwork for modernizing data, technology and talent tomorrow.
- Accelerate digitization, but not in isolation. Break from past cycles and explore how you can reimagine your operating models in concert with new tech investments, including cross-functional accountability to unlock real-time insight.
- Orchestrate cross-functional collaboration to bridge gaps. Limited visibility and misaligned functions can stifle execution. Address internal fragmentation by aligning incentives and enabling shared data access among operations, finance and supply chain teams.
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About the survey
Our latest PwC Pulse Survey, fielded May 1 to May 8, 2025, surveyed 678 executives and board members from Fortune 1000 and private companies about the current business environment, the risks executives are facing and their company’s strategic plans and priorities. Of the respondent pool, 82 were COOs.
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