The pandemic came with a few silver linings—in particular, it forced organizations to accelerate their digital transformation plans to facilitate remote workforces, offer more products and services online and future proof their business for the digital first shift. Now the challenge for many organizations will be to step back, assess and ensure continued, sustainable and strategic investment into their digital future.
Developing partnerships to accelerate transformation
Our survey found that Canadian CEOs now see emerging or disruptive technology as the number one threat to growth, climbing from the number four spot in February 2020 (right before the start of the pandemic). Four in five Canadian CEOs believe new partnerships will be critical to keeping up with the pace of digital transformation.
CEOs are pursuing growth strategies by joining industry consortia focused on the development of innovative technologies, increasing their investments in disruption detection and innovation processes, and making more products and services available through online platform providers. However, less than half are partnering with third-party cloud technology providers, collaborating with innovative start-ups or setting up accelerator or incubator programs. Something they should consider in the future to ensure the sustainability of their digital transformations.
of Canadian CEOs say new partnerships will be critical to continuing pace of digital transformation
"Innovation should be supported by an ecosystem of partners that includes government, chambers of commerce, post-secondary institutions, innovation hubs and industry groups, all working together to come up with innovative solutions for a digital-first economy and workforce. We've been seeing more and more of this, and it really is exciting times. "
— Benoit Lacoste Bienvenue, Regional Managing Partner, Quebec Region, KPMG in Canada
Shifting investment opportunities
The pandemic has served as a trigger for mergers and acquisitions, particularly in cases where companies needed to acquire digital capabilities to help them survive. But another factor driving M&A is the lack of skilled workers—and the fact everyone is competing for the same talent.
Overall, the majority of Canadian CEOs recognize they need to be quicker to shift investment to digital opportunities; indeed, 81% have an aggressive digital investment strategy, intended to secure first-mover or fast-follower status.
have an aggressive digital investment strategy, intended to secure first-mover or fast-follower status
"To create next level personalization, companies require new approaches to innovation: improve your core business, while making space for adjacent and disruptive products off to the side, protecting them from your core business until they are established in the market."
— Armughan Ahmad, President and Managing Partner, Digital, KPMG in Canada
Investing in the workforce of the future
The vast majority of Canadian CEOs (91%) see technological disruption as an opportunity rather than a threat. And instead of waiting to be disrupted by their competitors, 86% say they're actively disrupting the sector in which they operate—the highest of all countries in our global survey. But to succeed, there needs to be a proportionate investment in people.
believe the accelerated pace of digital transformation will not be sustainable without addressing burnout among their workforce
The pandemic has driven a drastic shift in the way in which people work. And we will continue to see automation, machine learning and artificial intelligence make processes smarter, faster and more efficient. This will free up much of the workforce to focus on value-added functions, however, it will also increase the need for skilled workers, who are already in short supply.
However, while 68% of Canadian CEOs are prioritizing investing in new technologies over investing more in developing their workforce's skills and capabilities (32%). That means many are missing out on the opportunity to get a higher return on their investment by not simultaneously transforming their workforce.
"One approach to reskilling employees for the future of work is helping them 'own' their development through micro-certifications from industry groups, polytechnic schools, technology vendors and other industry partners."
— Stephanie Terrill, Business Unit Leader, Management Consulting, KPMG in Canada
Those in the best position to compete are those with a growth mindset and the ability to transform faster than their competitors. The CEOs who are succeeding at this recognize they need to transform their business and offer more personalized customer and client experiences. And those leading with innovation are not doing it alone—they're doing it with a strong ecosystem of partners and community members.
- Invest more capital in developing your workforce's skills and capabilities alongside the acquisition of new technologies
- Build new partnerships—such as innovation hubs, industry groups and academia—to keep up with the pace of digital transformation
- Consider mergers and acquisitions to acquire much-needed digital capabilities or skilled talent for the future of work