CEOs view disruptive forces as opportunities, finds KPMG
Disruption has become a fact of life for CEOs and their businesses as they respond to heightened uncertainty.
KUCHING: The world’s business leaders have opined that disruptive forces are opportunities, not a threats, to their businesses, 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 of CEOs believe disruption can have a positive effect, while three in four say their business is aiming to be the disruptor in their sector. In Asean, the percentage recorded is higher with 92 per cent and 83 per cent respectively.
“Disruption has become a fact of life for CEOs and their businesses as they respond to heightened uncertainty,” says KPMG global chairman John Veihmeyer.
“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 urgency to ‘disrupt and grow’.”
Operational risk has risen to become the highest concern for CEOs overall. This is followed by risks of emerging technology, reputational/ brand risks, and strategic risks.
Cyber security, which CEOs ranked as the top risk in 2016, has this year fallen to position five (of 16), with 42 per cent say they feel adequately prepared for a cyber event - up from 25 per cent in 2016. CEOs clearly believe they are making progress in their management
John Veihmeyer, KPMG global chairman
of cyber.
However, KPMG in Malaysia managing partner 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 have been affected by WannaCry, and this number is still expected to increase.
“In actual fact, ransomware attacks are nothing new and this latest incident reinforces the need for business leaders to remain vigilant and avoid complacency when it comes to governance in cyber space. We operate in a digital world today where breaches can happen anytime. Complacency will only increase the risks across the business, from operational to reputational, with lasting impacts,” said Johan.
Amid heightened uncertainty around the global economic growth, 65 per cent of the CEOs remain 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 remain confident in their own industry’s growth prospect. In addition, a significant amount of CEOs ( 83 per cent) are positive about their own businesses’ prospect over the next three years.
About three- quarters of CEOs (74 per cent) say their organization is placing greater emphasis on trust, values and culture in order to sustain its long-term future. This is matched by 72 per cent of CEOs who correlate being a more empathetic organization with higher earnings.
KPMG’s survey further found that over the next three years, the proportion who are increasing investment in recruitment rises to 75 per cent. This suggests that businesses are increasingly looking to hire more specialized 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 internet of things (79 per cent), over the next three years.
“Greater digital investments offer companies more opportunities to secure competitive advantage. It is positive news that CEOs are still committed to invest in their people and make them important assets in the company as one way to manoeuvre around the current period of economic and geopolitical uncertainty,” noted Johan.