KPMG Sur­vey

CEOs are pri­or­i­tiz­ing agility and in­stincts over data, but al­most 67% of them say they have over­looked the in­sights pro­vided by an­a­lyt­ics, ac­cord­ing to KPMG.

CEO Magazine North America - - CONTENTS - BY KPMG

A bullish out­look tem­pered by re­al­ism.

NEV­ER­THE­LESS, that op­ti­mism is not trans­lat­ing into bullish­ness about their own com­pany’s topline rev­enue growth.

MACROE­CO­NOMIC OUT­LOOK

With many of the world’s ma­jor economies ex­pe­ri­enc­ing pos­i­tive growth mo­men­tum, we found CEOs are op­ti­mistic about the world­wide eco­nomic and busi­ness en­vi­ron­ment over the next 3 years at the global, coun­try, in­dus­try and com­pany level.

Three-quar­ters of CEOs are con­fi­dent in their coun­try’s growth prospects over the next 3 years

Their con­fi­dence in the global econ­omy, their in­dus­try and their com­pany has in­creased since last year. At an in­dus­try level, for ex­am­ple, over three-quar­ters (78%) say they are con­fi­dent in growth prospects for their sec­tor, a 9% in­crease on 2017.

A DOSE OF PRAGMATISM

How­ever, that faith in the macroe­co­nomic en­vi­ron­ment is not trans­lat­ing into am­bi­tious topline rev­enue growth tar­gets: the ma­jor­ity of CEOs —55%— ex­pect cau­tious rev­enue growth of less than 2%.

“As tra­di­tional prod­ucts and ser­vices be­come ob­so­lete and CEOs work to make their port­fo­lios rel­e­vant to the dig­i­tal age, it will take time to re­place his­tor­i­cal rev­enue streams.”

More than half of CEOs ex­pect cau­tious topline rev­enue growth of less than 2%. This con­ser­va­tive out­look could re­flect the dif­fi­cul­ties of driv­ing growth from new dig­i­tal busi­ness mod­els and rev­enue streams. As tra­di­tional prod­ucts and ser­vices be­come ob­so­lete and CEOs work to make their port­fo­lios rel­e­vant to the dig­i­tal age, it will take time to re­place his­tor­i­cal rev­enue streams. What’s more, the suc­cess of new dig­i­tal ini­tia­tives is of­ten re­vealed by dif­fer­ent per­for­mance in­di­ca­tors than pure topline growth—such as, for ex­am­ple, cus­tomer en­gage­ment.

This cau­tion is also re­flected in their hir­ing plans. Over half (52%) say they will not hire new skills un­til growth tar­gets are met and only 37% pre­dict head­count growth of more than 6% over the next 3 years. This is a 10% point de­crease ver­sus 2017.

In to­day’s en­vi­ron­ment, pragmatism pre­vails.

The up­swing in the global econ­omy has gen­er­ated a broadly pos­i­tive out­look, and we’re see­ing more growth op­por­tu­ni­ties in emerg­ing mar­kets than in de­vel­oped ones.Tim Mur­ray, CEO Alu­minium Bahrain

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