Why is leading radical transformation such a daunting task?
Whilst 58% of New Zealand CEOs’ are personally prepared to lead a radical transformation of their business to maintain its competitiveness, more than 70% of global CEOs’ are making transformation a personal priority. Why is it such a daunting task?
What a difference a year makes. New Zealand CEOs’ confidence in growth prospects for our country and for their companies has gone backwards, and is now well below what their global peers are thinking about their countries and the businesses they manage.
It’s no surprise then that 64% of New Zealand CEOs think growth will be harder over the next three years than ever before, compared to only 28% of CEOs globally.
The key driver of this is geopolitics – territorialism is in the top three risks of 68% of New Zealand CEOs, reflecting the export-driven nature of our economy, and whilst also a top concern globally, CEOs from the US, UK, Europe and China can see upsides and downsides from Trump’s trade policies and Brexit.
Whilst 58% of New Zealand CEOs are personally prepared to lead a radical transformation of their business to maintain its competitiveness, more than 70% of global CEOs are making transformation a personal priority – right now, more than ever, there’s a need for our CEOs to become more globally connected to overcome the risk of geographical and geopolitical isolation.
But it’s hard. Our CEOs highlight the importance of acting with agility, linking growth strategies to societal purpose, and improving how market disruption is monitored. Almost all New Zealand CEOs are finding the lead times to achieve progress with transformation projects “overwhelming”, and technology is not the only source of disruption.
And although only 8% of New Zealand CEOs view talent as one of their top three risks, a third don’t believe they have the right leadership team to oversee transformation, and over three quarters think their board’s expectations of return on investment from transformation is “unreasonable”.
In our recent publication “No normal is the new normal ” (published in conjunction with the Consumer Goods Forum), Willy Kruh Global Chair Consumer & Retail for KPMG International describes this sector “being transformed by three revolutions at once: geographic, demographic and technological”.
In the face of such momentous change it’s important to remember that growth is as much about mind set as it is about market conditions. CEOs need to ask if their culture, strategies and business models are facilitating growth or inhibiting it. And they need to ensure efforts to improve supply chains, embed smart technology and go digital are not just internal projects but are responsive to the needs of their customers – and executed fast enough to ensure their customers don’t become their competitors’ customers!