Global CEOs remain optimistic.. | KPMG | PH

Global CEOs remain optimistic over the next 3 years and look to be the disruptor

Global CEOs remain optimistic over the next 3 years..

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Global CEOs remain optimistic over the next 3 years and look to be the disruptor

KPMG global survey finds 65 percent of CEOs remain confident amid heightened uncertainty in the global economy.

KPMG International today released its 2017 Global CEO Outlook, based on in-depth interviews with nearly 1,300 CEOs of some of the world’s largest companies. This year’s CEO Outlook reveals that 65 percent of CEOs see disruptive forces as an opportunity, not a threat, for their business. CEOs are still broadly confident about the prospects for the global economy, but their optimism is more modest than it was last year, with 65 percent expressing confidence compared with 80 percent last year.

“Disruption has become a fact of life for CEOs and their businesses as they respond to heightened uncertainty,” says 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’.”

 

Highlights of KPMG's 2017 Global CEO Outlook

KPMG’s 2017 Global CEO Outlook report provides insights of global CEOs’ expectations for business growth, the challenges they face and their strategies to chart organizational success over the next 3 years. Key findings include:

• In 2017, CEOs are still broadly confident about the prospects for the global economy (65 percent), but their optimism is more modest than it was last year (80 percent).

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

• Within their own businesses, more than eight in 10 CEOs (83 percent) describe themselves as confident in their company’s growth prospects for the next 3 years, with around half (47 percent) saying they are very confident.

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

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

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

ASEAN CEOs generally had higher intentions to invest in new technologies to connect to customers. Their goal of investing in robotic processes over the next 3 years averaged about 45 percent higher than among CEOs outside the region. In the Philippines, CEOs have conducted maximum efforts and investments in innovating and improving technological facilities in the past year, as well as strengthening cybersecurity.

“An in-depth understanding of the correlation between digital investment and business growth exists among ASEAN CEOs as revealed in the 2017 Global CEO Outlook. ASEAN CEOs appear to be keener in prioritizing digital advancements which provide them and their companies significant leverage in the increasingly uncertain global geopolitical environment,” says Roberto G. Manabat, Chairman and CEO of KPMG R.G. Manabat & Co., the member firm of KPMG International in the Philippines.

A changing geopolitical climate

The annual study by KPMG International of nearly 1,300 CEOs from companies across 11 industries in 10 countries found that many CEOs are focused on geopolitical challenges:

• 43 percent of CEOs are reassessing their global footprint as a result of the changing pace of globalization and protectionism.

• 52 percent believe the political landscape has had a greater impact on their organization than they have seen for many years.

• 31 percent think protectionist policies in their country will rise in the next 3 years.

The evolving risk landscape

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 3 years, which is a change in ranking from seventh out of 10 in 2016.

Cybersecurity, which CEOs ranked at 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. Today, four in 10 (42 percent) say they feel adequately prepared for a cyber event – up from 25 percent in 2016.

Technology challenges - a battle for talent

Contrary to popular view, on average, 58 percent of CEOs actually expect cognitive technologies to increase headcount across 10 key types of roles in the immediate future. While 32 percent expect this growth to be slight, there is still a clear expectation that more specialist employees will be needed, at least in the short term. This would suggest that client experience, not cost reduction, is seen by CEOs as a key driver in adopting cognitive technologies. Attracting highly skilled talent – instead of managing technical issues around the technology itself – is seen by CEOs as the top challenge in implementing cognitive technologies.

More generally, CEOs expect headcounts to continue growing, but to grow at a slower pace than expected in 2016. Last year, 73 percent of CEOs expected their number of employees to increase by more than 6 percent in the next 3 years. In 2017, less than half (47 percent) expect this level of growth.

While CEOs are focusing on evolving their businesses, they are also evolving their own role – 70 percent of CEOs say they are now more open to new influences and collaborations than at any other point in their career.

A focus on trust

In light of operating within an increasinly transparent business environment, three quarters of CEOs (74 percent) say their organization is placing greater importance on trust, values and culture in order to sustain its long-term future. CEOs are seeing this trend continue for immediate future: 65 percent agreed that levels of trust in business will stay the same or decline in the next 3 years.

More than seven in 10 (72 percent) correlate being a more empathetic organization wiht higher earnings. Companies today are increasingly realizing that building trust is consistent with their business objectives.

To view additional information about the study, please visit kpmg.com/CEOoutlook. You can also follow the conversation @KPMG on Twitter using the hashtag #CEOoutlook.

For further information, please contact:

 

Cristina Roxas Loquinario

Markets Assistant Manager

KPMG R.G. Manabat & Co.

 

Telephone       +63 (2) 885 7000 ext. 339

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