If three in four CEOs worldwide are aiming to disrupt their sector, what does this mean – in practical terms – for their business? And, if 68 percent of global CEOs are evolving their roles, how will they challenge the people and systems that make up their organisation?
To prepare for uncertainty in the years to come, we find CEOs strengthening their existing markets and their core businesses. A significant number (73 percent in the Republic of Ireland and 64 percent in Northern Ireland) are increasing penetration in established markets as a strategic priority. CEOs in the Republic of Ireland in particular (73 percent) are looking at new markets – significantly more pronounced than their counterparts in Northern Ireland (48 percent).
According to Shaun Murphy, Managing Partner of KPMG in Ireland, the impact of Brexit is inevitably causing many CEOs to reassess where to focus attention. “The UK will remain a major market for business on this island – and whilst the hope is for frictionless trade - regardless of jurisdiction it makes sense to explore additional opportunities.”
A focus on the core does not contradict CEOs’ stated ambitions around disruption because we see innovation remaining an important strategic priority. Businesses are likely to prioritise their existing markets and will move into other markets as a secondary consideration. Once they are confident in the resilience and agility of the underlying organisation, and the economic climate seems more stable, we expect CEOs to focus more strongly on new opportunities further afield.
Today, almost half of local CEOs (47 percent in the Republic of Ireland and 44 percent in Northern Ireland) expect their business to be transformed into a significantly different entity within 3 years. We see CEOs’ appetite for transformation varies markedly by region, due to local market pressures and geopolitics. Respondents on the island of Ireland appear to have more in common with their counterparts in China, India, Australia and Japan whom are also more likely to expect their businesses to become significantly different entities within 3 years; those in the US and elsewhere in Europe less so.
It appears that a number of organisations in the US and Europe are leading a growing trend in innovation that does not necessarily equate disruption with wholescale transformation.
“For many of our clients, innovation isn’t necessarily about changing everything they’ve got,” says Darina Barrett – Head of Financial Services with KPMG in Ireland. “It’s more about pursuing opportunities to change because it makes sense and not being wedded to something just because it has always been there,” she says.
Such innovation also creates opportunities in the wider economy. For example, KPMG’s Belfast based Johnny Hanna highlights how Northern Ireland is gaining a significant reputation as a global leader in cyber security and fintech.
“The two universities in Northern Ireland - Queens University and Ulster University - are producing some of the best graduates in the world and CSIT, the UK’s lead university centre for cyber security research, is based at Queen’s.”
Our survey finds that rather than seeing transformation as a discrete program, with an abrupt transition from one incarnation of the business to the next, many businesses will have accepted it as part of “business as usual”. Again, this may be targeted at the areas that need it most at the time, as a means to enable agility, rather than across the board.
Safra Catz of Oracle describes how transformation has been embedded throughout her company. “At Oracle, transformation never ends,” she says. “It’s like working out every day. You’ve got to constantly improve. You have to build trust in transformation. You have to show a little bit of immediate thinking, some quick results. You’ve got to build momentum.”
Catz believes that embedding transformation is as much about understanding people as it is about leveraging technology. “People hate change because they’re afraid that you don’t know what you’re doing. So you have to build trust in transformation. Get a coalition of the willing, get a few people started and everybody else will follow.”