77 percent predict revenue growth of less than 2 percent over next 3 years: KPMG International survey
PETALING JAYA, 22 May 2018 – The outlook appears to be bright as 88 percent of ASEAN CEOs are confident about their company’s growth prospect in the next 3 years, a sentiment shared by CEOs globally (90 percent).
However, according to the 2018 Global CEO Outlook report by KPMG International, this optimism is married with a healthy dose of realism as 77 percent of ASEAN leaders are predicting a cautious revenue growth of 2 percent or less over the next three years for their organization. More than half of CEOs in ASEAN (64 percent) also noted the need to hit growth targets before hiring new skills. Consequently, they expect headcount to increase by less than 5 percent over the next three years.
This evidence of pragmatism doesn’t surprise Datuk Johan Idris, Managing Partner of KPMG in Malaysia, who commented: “Across the board, CEOs are driving growth against a backdrop of significant demographic shifts, geopolitical volatility and the seemingly inevitable future cyberattacks. It’s clear that driving growth in 2018 and beyond will require CEOs to combine resourcefulness and realism in equal measure.”
Chart 1: Threats to growth (ASEAN)
Source: 2018 Global CEO Outlook, KPMG International
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Rising cyber threats
The ever-present risk of a cyber security threat is rising on the radar; up from fifth to second place overall this year in terms of risks hampering future growth. Digital innovation can create significant value across business models, customer experience and operations. But greater connectivity brings increasing cyber vulnerability, and about half of all CEOs around the world (49 percent) say that a cyberattack is now a case of ‘when’, instead of ‘if’.
And yet, many CEOs are concerned about the robustness of their defenses; only half of CEOs in ASEAN believe that their organization is well prepared for a cyberattack.
“Smart leaders are those who are making cyber preparedness a board priority, stress-testing the resilience of their systems and people to withstand an attack. Ultimately, having a robust cyber defense in place is critical to secure key stakeholders’ trust,” observed Dani Michaux, KPMG’s Head of ASPAC Cyber Security.
Making digital a personal crusade
Two-thirds (66 percent) of CEOs in ASEAN are struggling to run parallel processes to transform the digital and non-digital aspects of their business, to a greater extent than their global counterpart (30 percent).
Nevertheless, ASEAN CEOs are embracing the digital agenda like never before and taking personal ownership of data and trust:
- 72 percent are personally ready to lead a radical organization transformation
- 73 percent see protecting customer data as a critical personal responsibility
- Counter to popular opinion, 87 percent expect AI to create more jobs than it destroys.
Datuk Johan referenced the recent outcry over the Cambridge Analytica scandal as an impetus towards customer data protection, which is increasingly seen as one of the priorities for CEOs.
“In this digital age, data protection is highly important to every individual. If customer trust is threatened by misuse of data or a breach, the consequences for the company can be severe. Hence, the move by business leaders to protect customer data will reflect positively on their organization and will consequently bolster public trust,” he said.
Disruption and trust
Instead of waiting to be disrupted, 70 percent of CEOs in ASEAN are actively disrupting the sector they are operating in, markedly higher than the percentage recorded at the global level (54 percent).
When it comes to sources of information ASEAN business leaders trust the most for strategic decisions, KPMG’s study found their trusted sources ranked as follows: social media (87 percent), independent secondary information providers (81 percent), open data from government agencies (71 percent), traditional media (65 percent) and government commissioned research (51 percent).
You can also download the report here.
About KPMG’s 2018 Global CEO Outlook survey
The survey covers 1,300 CEOs in 11 key markets (Australia, China, France, Germany, India, Italy, Japan, Netherlands, Spain, UK and US) and 11 key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology and telecoms). A third of the companies surveyed have more than US$10B in annual revenue, with no responses from companies under US$500M. The survey was conducted between 22 January and 27 February 2018.
NOTE: Some figures may not add up to 100 percent due to rounding.
For media queries, please contact:
KPMG in Malaysia
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Senior Executive, MARCOM
KPMG in Malaysia
Direct: +603 7721 3961
Mobile: +6011 3319 7127