30.06.2016 – 06:02
Next 3 Years More Critical Than Previous 50 as Global CEOs Believe it is Now or Never to Transform Their Company
New York (ots/PRNewswire)
KPMG International survey finds CEOs' optimism based on technology, speed and talent
KPMG International released its 2016 Global CEO Outlook (https://home.kpmg.com/xx/en/home/campaigns/2016/06/ceo-outlook.html?cid=psrs_nwr_xx_press-acx_2016-adv-ceo-utlk&utm_medium=psrs&utm_source=nwr&utm_content=xx_press-acx&utm_campaign=2016-adv-ceo-utlk), revealing that while a majority of CEOs foresee the next few years to be challenging, with expected moderate economic growth, they are optimistic they can successfully manage through this environment. While 72 percent of top executives believe the next 3 years will be more critical to their industry than the previous 50, they are confident in their company's growth prospects. Further four-in-ten CEOs say they are pinning their prospects on significantly transforming their operating model over the next 3 years, up 12 percent from last year's survey.
Highlights of KPMG's 2016 Global CEO Outlook study
KPMG's 2016 Global CEO Outlook study provides a vivid image of global CEOs' expectations for business growth, the challenges they face and their strategies to chart organizational success over the next 3 years. Key findings include:
- The vast majority of CEOs are confident in future growth over the next 3 years, with 89 percent feeling confident in their own company's growth, 86 percent confident in their home country's growth, 85 percent confident in the growth of their industry and 80 percent confident in the global economy. - Almost half (48 percent) of CEOs say their company's annual top-line growth over the next 3 years will be between 2 and 5 percent. - CEOs expect the primary sources of growth to be from new products (28 percent), new customers (26 percent), new markets (25 percent) and new channels (22 percent).
Top concerns and priorities
The annual study by KPMG International, of nearly 1,300 CEOs from companies across 11 industries in 10 countries, found that CEOs are concerned with a number of critical issues - many of which they indicate they have not previously experienced in their careers. The most pressing concerns for CEOs are:
- customer loyalty (88 percent) - impact of the global economy on their company if global economic growth is less than they project (88 percent) - lack of time to think strategically about the forces of disruption and innovation shaping their company's future (86 percent).
Importantly, 65 percent are concerned that new entrants are disrupting their business models and more than half (53 percent) of CEOs believe that their company is not disrupting their industry's business models enough.
"These CEOs understand that their organizations need to be disruptors - and it's now or never for them to do so," says John Veihmeyer, Chairman, KPMG International. "Despite today's global geo-political uncertainty and disruptive market and social forces, the CEOs in our survey are focused on growth, by strengthening their capabilities today and readying their businesses for a very different future, through transformation, advanced technology and more specialized talent."
The level of concern about new and unfamiliar challenges, is evident from the shift in top risks identified by the CEOs. For example, cyber risk rose to the top in the 2016 survey, whereas it was not among the top five risks in 2015. Seventy-two percent of CEOs believe their organization is not fully prepared for a cyber event. CEOs also voiced their concern with their company's level of data and analytical sophistication, as well as their ability to connect with customers through digital channels. Less than a third (30 percent) believe they are currently a leader in data and analytics.
The top strategic priorities over the next 3 years of the CEOs surveyed are:
- fostering innovation (21 percent) - having stronger client focus (19 percent) - implementing disruptive technology (18 percent) - developing and/or managing talent (18 percent) - stronger marketing, branding and communications (17 percent).
Despite innovation being the top priority for their organization and that nearly 8 in 10 (77 percent) say it is critical to include innovation in their strategy, with clear targets and objectives, less than a quarter (23 percent) of CEOs say that innovation is at the top of their personal agenda.
CEOs stake future on transformation, technology and talent
In light of the shifting business environment, almost half (41 percent) of CEOs indicated that their company will likely be transformed into a significantly different entity in the next 3 years. That number has risen markedly from the 2015 survey, in which 29 percent of CEOs held that opinion.
In line with expectations of economic and revenue growth, a growing number of CEOs plan to increase talent over the 3 year period. Ninety-six percent expect to increase their headcount over the next 3 years, up from 78 percent in last year's survey. A solid majority (61 percent) plan on hiring within the next 12 months. However, most report some levels of skills gaps emerging, with over 50 percent of the CEOs reporting skills gaps in key business functions.
Technology also featured prominently in the CEOs' transformation plans, with these executives stating that it would be the second largest factor contributing to company growth - after global economic factors and ahead of domestic economic conditions. The CEOs highlighted new technology as a key enabler to achieve and accelerate their progress, with 18 percent saying that implementing disruptive technologies will be a key priority. The CEOs reported that they will devote significant investment to technology over the next 3 years, with 25 percent planning to increase data analytics capabilities and 22 percent planning investments in cyber security solutions. Technology-related risks are also top of mind for CEOs, with cyber security (30 percent) and emerging technology risk (26 percent) accounting for two of the top three risks they are concerned about.
To view additional information about the study (http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/ceo-outlook/Pages/Default.aspx?cid=_psrs_gdp_psrs_global_2015_2007_%7bkeyword%7d_CEO+survey+email01_ceosurvey&utm_source=_psrs&utm_medium=psrs&utm_term=%7bkeyword%7d&utm_content=CEO+survey+pr01&utm_campaign=2015+gdp+ceosurvey), please visit kpmg.com/CEOoutlook (https://home.kpmg.com/xx/en/home/campaigns/2016/06/ceo-outlook.html?cid=psrs_nwr_xx_press-acx_2016-adv-ceo-utlk&utm_medium=psrs&utm_source=nwr&utm_content=xx_press-acx&utm_campaign=2016-adv-ceo-utlk). You can also follow the conversation @KPMG on Twitter, using the hashtag: #CEOoutlook.
About KPMG's 2016 Global CEO Outlook survey
The survey targeted 1,268 CEOs in 10 key markets (Australia, China, France, Germany, India, Italy, Japan, Spain, UK and US) and 11 key industry sectors (automotive, banking, infrastructure, insurance, investment management, life sciences, manufacturing, retail/consumer markets, technology, energy/utilities and telecom). A third of the companies surveyed have more than US$10B in annual revenue, with no responses from companies under US$500M. The survey was conducted between 15 March and 29 April 2016. NOTE: some figures may not add up to 100 percent due to rounding.
KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 155 countries and have 174,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
Brian Bannister, KPMG International, +44-7919-393753, Brian.Bannister@kpmg.co.uk
Original content of: KPMG International LLP, transmitted by news aktuell