Nordic CEOs say they are much more concerned than their global peers about whether their companies are keeping pace with competitive pressures. Whereas internationally, under half of respondents (45%) in CEO Outlook 2017 say that they are concerned about keeping ahead of the competition; however, three quarters of Nordic CEOs said that it was a concern.
This might be because Nordic companies are more likely to think long‑term and strategically than their international counterparts.
Morten Mønster, Partner and Head of Advisory at KPMG Denmark, points out that a key element of the Nordic model involves active ownership as a stabilizing force – in the form of founding families, government, foundations – that has a majority stake in companies and tends to take a more long‑term view. He cites this long‑term outlook as a core reason that Nordic companies are more likely to embrace technology, even if doing so entails a short‑term investment which might not pay off for several years.
“They know they have to embrace technology,” he says.
Mønster cites the threat faced by Maersk, the container shipping company, as an example of taking the digital threat seriously.
“The CEO Søren Skou recently has stated that Maersk should fear disruption from companies like Amazon. Something that would have been unheard of just a few years ago”, Mønster argues.
“Amazon, the e‑commerce and cloud company, is currently looking into how to create a service that includes the whole value chain, including transporting the goods to the customer, thereby cutting the shipping and logistics companies out of the equation. This is forcing Maersk to pursue a strategy of becoming a much more integrated logistics company which can offer end‑to‑end customer solutions with a strong digital component. Additionally, in an age of self‑driving cars, drones and 3D printing, logistics services are clearly at risk.”
This convergence may have a knock‑on effect on outlook; Nordic CEOs are more likely than their international counterparts to be concerned that their business model might be disrupted by a new entrant that is currently not seen as a competitor. Nordic CEOs have a healthy dose of realism and understand that action needs to be taken.
Whereas less than half of CEOs globally say they are concerned about this, nearly eight out of ten Nordic CEOs (78%) say the same. The same proportion say they are concerned their organization isn’t disruptive enough.
“Nordic societies have become so accustomed to disruptive change that it is regarded as a fact of life to which
firms must either adapt or face the risk of being left behind,” suggests Rune Skjelvan, Partner and Head of Advisory at KPMG Norway.
For Morten Mønster, the Nordic firms’ confidence that they can weather the storms of disruption comes from their faith in their staff. “The Nordic workforce is quite agile and competent,” he says, “so business leaders tend to think that whilst they might not have all the capabilities today, they can develop that workforce to cope with the disruption.”