UK CEO Outlook 2015: Revolution or Evolution?

UK CEO Outlook 2015: Revolution or Evolution?

A tale of two strategies. To complement the recently published KPMG Global CEO Outlook Survey 2015, we examined the views of the 151 UK respondents and found the country’s business leaders in a confident mood.

Partner and Head of the KPMG Global Strategy Group

KPMG in the UK

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UK CEO Outlook 2015: Revolution or Evolution?

Read the views of our experts

UK CEOs differ with their global peers in several significant areas – primarily around growth opportunities and the pace of change to their business model. Our study also reveals a sharp strategic split among British business leaders with opinion divided over how best to exploit the opportunities ahead. One group (51 percent) sees the need to transform their business for a new world (Revolutionary CEOs); the other believes in holding firm on their current model, but optimising it wherever they can (Evolutionary CEOs).

Key highlights:

  • 79 percent of UK CEOs are confident about business growth prospects (54 percent globally)
  • UK CEOs see Western Europe as having the best prospects for near-term growth (USA second)
  • Only 19 percent to invest significant capital in international expansion (47 percent globally)
  • Over half (51 percent) believe their company will be significantly different in three years’ time (Revolutionary CEOs) and 49 percent believe their business model will remain unchanged. Globally these figures were 29 percent and 71 percent.

Revolutionary CEOs:

  • Are more likely to report that their confidence has risen significantly over the past year
  • Have a renewed focus on customers and a drive to strengthen brand as priorities
  • Are planning capital investment in sales, advertising and marketing
  • See growth coming from existing customers and hope to build stronger relationships with their most profitable customer segments.

Evolutionary CEOs:

  • Are less likely to report confidence has risen over the last year
  • Have a focus on cost structures as their leading priority
  • Are planning M&A transactions and increases in headcounts to grow their business

Innovation Attitudes

Although the speed with which business models change is increasing, UK CEOs seem remarkably unbothered by key competitive risks. UK CEOs regard innovation as crucial: 85 percent believe they are innovating fast enough to secure a competitive future, though far fewer are confident they are using data and analytics technologies effectively. 

UK CEOs’ strategies for innovation differ. Some are focussing on in-house R&D, and plan substantial capital investments. Others think partnerships and collaborations with other parties represent the best way to secure innovation that will drive future growth. 

Either way, there is work to be done. Only one in three UK CEOs say they have implemented a fully-developed company-wide process for innovation, far less than their global peers.

If you’re not concerned, think again

Managing disruption has become incredibly important. If you do not anticipate change, and you do not embed agility into your business model, you will be at a competitive disadvantage. 

Historically, businesses underwent transformation once a generation. Now most organisations will face business model change at least once during the average tenure of a CEO. The organisations which are agile and alive to the need to evolve will be more successful than those that don’t.

NICHOLAS GRIFFIN, HEAD OF THE GLOBAL STRATEGY GROUP, PARTNER, KPMG IN THE UK

"Assume that someone, somewhere is figuring out how to change the rules of the game you are playing."

 
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Bill Robinson, Chief Economist, KPMG in the UK

"With growth picking up in the Eurozone, it is easy to see why UK CEOs are more optimistic than their global counterparts"

 
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Mark Guinibert, Head of Customer and Growth, Partner, KPMG in the UK

"Take advantage of the opportunities presented by big data and analytics tools to generate actionable insights into your customers' needs and desires."

 
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Dr Marc van Grondelle, Global Head, Joint Venture and Partnering Practice, Partner, KPMG in the UK

"Sometimes an extension of the dating phase can be a pragmatic step, before seeking to tie the knot"

 
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Warren Middleton, Head of Risk Consulting & Management Consulting in National Markets, Partner, KPMG in the UK

"Smaller firms see more of their competition up close. They feel the threat more accurately than a larger company might."

 
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Charlie Simpson, Global Strategy Group, Partner, KPMG in the UK

"The big question is what strategic route should you follow: buy, merge, collaborate, or something else?"

 
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Giles Williams, Head of the Financial Services Regulatory Centre of Excellence, Partner, KPMG in the UK

"UK Financial Services CEOs should focus on business areas where customer loyalty is less pronounced and the switching threat is the greatest."

 
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Sanjay Thakkar, Head of Deal Advisory, Partner, KPMG in the UK

"The organisations which are agile and alive to the need to evolve will be more successful than those that don't."

 
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