55 percent predict cautious revenue growth of less than 2 percent over next 3 years: 4th annual KPMG International survey
Repositioning their business to meet the needs of Millennials is a priority for 38 percent.
Geopolitics hits the boardroom, with territorialism named as top threat to growth.
Half say becoming a victim of a cyber attack is inevitable.
Despite being relatively bullish on the economy at large as well as their overall outlook for their country, optimism from global CEOs is tempered by a healthy dose of realism, with half (55 percent) predicting cautious topline revenue growth for their own business. Half of CEOs (52 percent) say they will need to hit growth targets before hiring new skills. According to the KPMG Global CEO Outlook, they are driving growth against a backdrop of significant demographic shifts, geopolitical volatility and the seemingly inevitable future cyber attack. CEOs are stepping up to the cyber challenge, in particular, with 59 percent saying they feel a personal responsibility for protecting customer data.
“CEOs are harnessing the headwinds of change to steer their organizations to growth,” said Bill Thomas, Chairman, KPMG International. “CEOs I’m talking with recognize that geopolitical uncertainty, disruption and cyber threats are their new normal. The best are looking for the opportunities this creates, changing their systems, and in some cases their entire business. It’s clear that driving growth in 2018 and beyond will require CEOs to combine resourcefulness and realism in equal measure.”
Stepping up to the challenge of an uncertain world
CEOs play an essential role in pivoting their organizations to the consumers of tomorrow in order to seize every opportunity to grow, with four in ten (38 percent) responding that their business requires repositioning to meet the needs of Millennials. There’s also a growing sense of inevitability of a cyber breach with nearly half (49 percent) of CEOs saying that becoming the victim of an attack is a case of ‘when’ and not ‘if’. Given the current geopolitical environment, it’s perhaps not surprising that a ‘return to territorialism’ was named the number one threat to growth this year.
Driving realistic growth
CEOs are optimistic about the macroeconomic environment; they are confident about global and industry growth prospects (67 and 78 percent, respectively). They’re also feeling confident in their individual country growth (74 percent are confident, although this is down 3 percentage points from 2017). But there’s a more complex story emerging regarding company growth prospects:
90 percent are confident in their company’s growth prospects (up 7 percentage points from 2017).
However, only 37 percent plan to increase headcount by more than 6 percent over the next 3 years (down 10 percentage points).
And 55 percent predict cautious revenue growth of less than 2 percent over the next 3 years.
Making digital a personal crusade
CEOs are embracing the digital agenda like never before and taking personal ownership of data and trust.
71 percent are personally ready to lead a radical organization transformation.
59 percent see protecting customer data as a critical personal responsibility.
Counter to popular opinion, 62 percent expect AI to create more jobs than it destroys.
Putting instinct over facts
With customer demands changing continually, and the technology landscape in a constant state of flux, agility and intuition are critical.
59 percent believe agility is the new currency of business; indicating if they’re too slow they will be bankrupt.
More than half (51 percent) are less confident in the accuracy of predictive analytics compared to historic data, and have the highest trust for social media sources over all others.
67 percent admitted they have relied on their own intuition over data-driven insights to make strategic decisions in the past 3 years.
“Data is hugely important, but ultimately CEOs have to make big calls and it’s clear that experience and intuition still have a role to play,” said Thomas.
Rising cyber threats
The ever-present risk of a cyber security threat is rising on the radar, up from fifth to second place overall this year in terms of risks hampering future growth. Only half (51 percent) of respondents indicated they are well-prepared for a cyber attack, even though over half (55 percent) say that a strong cyber strategy is critical to engender trust with key stakeholders.
Developing markets a focus for growth
Seventy percent say their biggest priority for geographical expansion is emerging markets, with Central/South America noted as the most important region.