For most CEOs, disruptive forces present opportunities, global

14.06.17

ABOUT 65 per cent of nearly 1,300 chief executives polled worldwide see disruptive forces as an opportunity, not a threat, for their business this year, according to KPMG International’s 2017 “Global CEO Outlook” survey, released yesterday.

 The KPMG report is based on in-depth interviews with CEOs of some of the world’s largest companies. It said CEOs were still broadly confident about the prospects for the global economy, but their optimism is more modest than it was in 2016, with 65 per cent expressing confidence compared with 80 per cent last year.

“Disruption has become a fact of life for CEOs and their businesses as they respond to heightened uncertainty,” said John Veihmeyer, global chairman of KPMG. “But importantly, most see disruption as an opportunity to transform their business model, develop new products and services, and reshape their business so it is more successful than ever before.

“In the face of new challenges and uncertainties, CEOs are feeling urgency to ‘disrupt and grow’.”

The new report provides insights into global CEOs’ expectations for business growth, the challenges they face and their strategies to chart organisational success over the next three years. Key findings include the following.

More than six in 10 CEOs (65 per cent) see disruption as an opportunity, not a threat, for their business. Three in four (74 per cent) say their business is aiming to be a disruptor in its sector.

Within their own businesses, more than eight in 10 CEOs (83 per cent) describe themselves as confident in their company’s growth prospects for the next three years, with around half (47 per cent) saying they are very confident.

Almost seven in 10 (68 per cent) say they are evolving their skills and personal qualities to lead their business better.

As they adopt cognitive technologies, businesses are expecting short-term headcount growth. Across 10 key roles, an average of 58 per cent of CEOs are expecting a slight or significant growth in numbers.

Close to half (45 per cent) say their customer insight is hindered by a lack of quality data. More than half (56 per cent) are concerned about the data they are basing decisions on.

“CEOs understand that speed to market and innovation are strategic priorities for growth in uncertain conditions,” Veihmeyer said. “At the same time, they are being pragmatic about managing uncertainty – this includes strengthening their business in established markets so they can protect their bottom line while preparing to seize new opportunities.”

One of the most striking changes in this year’s survey is the rise in the number of CEOs who cite reputational and brand risk as a top current concern. This is the third-most-important risk (out of 16 in total), after not featuring in the top 10 in 2016.

CEOs also see reputation and brand risk as having the second-biggest potential impact on growth over the next three years, which is a change in ranking from seventh out of 10 in 2016.

Cybersecurity, which CEOs ranked as the top risk in 2016, has this year fallen to position 5 (of 16), in part reflecting CEO views on the progress their business has made in cyber-risk management. Now, four in 10 (42 per cent) say they feel adequately prepared for a cyber-event – up from 25 per cent in 2016.

“This survey was completed before the recent global attack of WannaCry ransomware, and what the attack goes to show is that companies must always be alert and active about cybersecurity,” said Winid Silamongkol, CEO of KPMG in Thailand.

“In order to prevent a cyber-attack efficiently and proactively, companies need to align three key areas to strengthen their cybersecurity – people, process and technologies.”