KPMG survey shows world's business leaders view disruptive forces as opportunities

KUALA LUMPUR: The world's business leaders have opined that they view disruptive forces as an opportunity and not a threat, according to the results of KPMG's 2017 Global CEO Outlook.

Based on the survey, which interviewed nearly 1,300 Chief Executive Officers (CEOs) of some of the world's largest companies, 65 per cent believed disruption can have a positive effect, while three in four said their businesses aimed to be the disruptor in their sector.

In ASEAN, the percentage recorded is higher at 92 per cent and 83 per cent respectively, KPMG, a global network of professional services firms providing audit, tax and advisory services, said in a statement here yesterday.

"Disruption has become a fact of life for CEOs and their businesses as they respond to heightened uncertainty.

"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 even more successful than ever before. In the face of new challenges and uncertainties, CEOs are feeling an urgency to ''disrupt and grow," said KPMG Global Chairman, John Veihmeyer.

According to the survey, operational risk has risen to become the highest concern for CE Os overall and followed by risks of emerging technology, reputational and brand, as well as strategic.

It said cyber security, which CEOs ranked as the top risk in 2016, has this year fallen to position five (of 16), with 42 per cent saying they feel adequately prepared for a cyber event - up from 25 per cent in 2016. The CEOs clearly believe they are making progress in their management of cyber security.

However, the Managing Partner of KPMG in Malaysia Datuk Johan Idris pointed out that this perception was recorded before the WannaCry ransomware outbreak in May 2017.

According to the live tracking system at KPMG's Cyber and Digital Hub established in Malaysia, to date, more than 530,000 computers in 150 countries had been affected by WannaCry, and this number is still expected to increase.

Amid heightened uncertainty around the global economic growth, 65 per cent of the CEOs remained confident about the global economic outlook for the next three years, though this is a drop from 80 per cent in 2016.

Globally, the majority of CEOs (69 per cent) also remained confident of their own industry' s growth prospect. In addition, a significant amount of CEOs (83 per cent) are positive about their own businesses'' prospects over the next three years.

About three-quarters of CEOs (74 per cent) said their organisation is placing greater emphasis on trust, values and culture to sustain its long term future. This is matched by 72 per cent of CEOs who correlate being a more empathetic organisation with higher earnings.

KPMG's survey further found that over the next three years, the proportion of those increasing investments in recruitment rising to 75 per cent. This suggests that businesses are increasingly looking to hire more specialised talent in the years ahead - such as cognitive technology experts or those with greater insight into geopolitical issues.

This intention is aligned with the number of CEOs in ASEAN who expect to invest in Blockchain and data analytic tools (92 per cent), cognitive technologies including artificial intelligence and machine learning (83 per cent); and the Internet of things (79 per cent), over the next three years.