The ability to integrate digital innovation is key to unlocking long-term growth. However, concerns over cyber security can put a brake on those ambitions. Organisations need to ensure that this threat does not undermine digital’s growth potential.
68 percent of CEOs worldwide say their organisation is prepared for a future cyber attack. With 78 percent of respondents in the Republic of Ireland and 80 percent in Northern Ireland expressing confidence in their cyber security measures. Interestingly, on a global basis, publicly traded companies feel more prepared for a possible attack versus those that are privately held.
With cyber resilience key to unlocking growth, CEOs are clear that effective cyber security is much more than a defensive or mitigating capability. We found that 68 percent of CEOs in both the Republic and Northern Ireland say that their organisation sees information security as a strategic function and a source of competitive advantage.
Trust is everything with data and strategic advantage has already gone to those who out-perform competitors in terms of transparency. For consumers, if an organisation is more transparent about how they handle data and privacy, including how they handle incidents such as a breach, their brand will be positively differentiated.
This perspective is supported by our research. A large majority of CEOs, (62 percent in the Republic of Ireland and 72 percent in Northern Ireland) say that a strong cyber security strategy is critical to driving trust with their key stakeholders. This has climbed significantly since 2018.
On a worldwide basis those CEOs who have made their organisations more cyber resilient are also more focused on disrupting their industry. These cyber resilient CEOs also make bolder use of AI and are projecting stronger revenue growth (2 percent revenue growth or more) over the next 3 years.
CEOs play a key role in driving the right culture for cyber resilience from the very top. This means having a deep and nuanced understanding of the risks facing the organisation and putting in place the communications and education programmes necessary to ensure that security practices are ingrained in day-to-day business operations. “You’re only as strong as the weakest link,” says Dani Michaux, KPMG’s Head of Cyber Security in Ireland. “You need a culture where cyber security is everyone’s challenge, which is particularly true in large organisations. There’s no point training 50 expert cyber security professionals, when everybody else may be doing risky things that could compromise the organisation.”
CEOs need to ensure that they are investing enough financial resources in building cyber resilience. However, understanding what ‘enough’ is can be difficult given the challenges of assessing ROI. “One of the hardest things about cyber security and building a resilient organisation is that if it’s going well, you don’t hear about it,” says KPMG’s Dani Michaux. “Building cyber resilience is an ongoing effort, just like building a good immune system. It’s like health or house insurance. You never want to use it, but if you do need it, you’re really glad you’ve got it. But you need to ensure the investment is there to continually adapt and renew your approach - always bearing in mind new technology enhancements and changing business models.”
One of the hardest things about cyber security... is that if it’s going well, you don’t hear about it...
Disruptive technologies, from artificial intelligence to virtual reality, have the potential to transform the world of work. Many roles and skills are becoming outdated or evolving in our machine age. This is affecting many blue-collar jobs, but all jobs could be affected, and even highly skilled roles are not immune.
This seismic shift poses wider questions for both society and governments. And for companies and their leaders, it means that the skills that companies need, and the way employees learn and progress in their careers, are being transformed. CEOs are having to embrace a new way of thinking about talent, workforce strategy, and the need for upskilling.
“To stay agile today we have got to be taking in information, reaching out and learning from people that we might not ordinarily be seeing,” said Doug McMillon, President and CEO, Walmart International. “It’s important that we become lifelong learners across the entire company. We have a lot of leaders in the company, around the world, but each one of us, individually, has got to be growing and learning every day.”
CEOs recognise that this trend is accelerating and requires them to focus. Worldwide, four in ten (44 percent) are intending to upskill more than half of their current workforces, a strategy reflected in both the Republic of Ireland (50 percent) and Northern Ireland (52 percent).
KPMG’s Paul Toner, Head of Consulting in Ireland, believes disruptors also need to adopt a different mindset. “They have to be at the bleeding edge, not just the leading edge. It’s hard to do it with the same people you have always had. You need disrupt your own organisation by bringing in individuals to broaden and freshen up thinking,” he says. That can be difficult, and it can take quite a while to see if it is working.
According to Paul Toner, “It can be better to bring in advisors first to introduce some new thinking and approaches and then bring in the new people later. Companies need to leverage what they already have. They need to move out of the boardroom and the executive suite and look for ideas from employees throughout the organisation. When you start looking for ideas in that way you can be surprised at what you get. You have to create a culture where everyone feels able to put their ideas forward, where every idea is valued and people have permission to fail.”
We also asked CEOs how they are prioritizing their capital investments and we see a tension between the workforce changes they know they need to make and the investments that are required in their technology. Specifically, we asked whether they are putting more capital into developing people’s skills or in buying new technology. The majority of global respondents (68 percent) - said that they are placing more capital investment in buying new technology. Similar figures were reported in the Republic of Ireland (62 percent) and Northern Ireland (64 percent).
Jonas Prising, CEO of global workforce company ManpowerGroup, points out the focus should not only be on the technology. “We believe the major impact of technology is going to be to augment human capability provided you have the skills necessary to take advantage of them,” he says. “In my view, too much time is spent debating the impact of job elimination and not enough time focusing on the need for a skills revolution; where we can upscale and rescale the workforce, both at a company level, and at a country level.”
Nearly six in ten global CEOs (59 percent) said it’s challenging to find the staff they need. Findings were very similar in Northern Ireland (58 percent) and somewhat higher (66 percent) in the Republic. And tellingly, modernising their workforce was the top strategy CEOs selected for how they are ensuring their organisation is future ready worldwide.
Progress is impossible without people... everything, ultimately, comes down to people. But we can’t invest in our future without delivering profits.
Markus Tacke, CEO of Siemens Gamesa, a world leader in renewable energy, believes that companies need to balance their investment in people and technology if they are to create agile organisations with a culture of continuous learning. “Today’s organisations need to be fast-learning and fast-moving entities that adapt quickly from a technology point of view, but also from a people point of view,” he says. “Capabilities that were quite valuable 10 years ago remain reliable but need to be complemented with other capabilities. So, investing in both in a balanced way is what companies need to do.”
Masaaki Tsuya, CEO of Bridgestone, the world’s largest tyre and rubber company, feels that people are the eventual driver of success, but that belief has to be balanced against the urgent need to invest in new technologies. “Progress is impossible without people,” he says. “Everything, ultimately, comes down to people. But we can’t invest in our future without delivering profits. Our businesses are changing due to unprecedented changes in technology, including the Internet of Things and artificial intelligence. Unless we deal with that properly, we will not make those profits and we would lose. Therefore, it is important to strike a balance between people and technology.”
If they are to deliver on their upskilling pledges, CEOs need to give strategic backing and allocate adequate resources to the learning and development of their employees. CEOs can also play a key role in ensuring that there is effective governance for learning and development, ensuring that upskilling initiatives are not fragmented, and that resources and investment are focused on areas where they will have the greatest impact.
KPMG’s Dublin based Owen Lewis, who spent over ten years at Toyota, says we have always had an appetite to improve our lifestyles, our health, our commercial successes, achieve things that were once seen as impossible. “One could argue that we are even more motivated today. The world faces some significant challenges not least of which lies in population growth and the impact our current lifestyles have on the environment.”
According to Lewis, “Humanity has more to do now than ever before and the challenges we face need faster, smarter technologies to help. Against this backdrop, AI will have a negative impact on those individuals who are currently making ends meet from doing the tasks that AI and robotics will replace, but I am convinced that overall we will generate new jobs at a pace that will outstrip the losses.” Lewis believes that the real challenge will be in ensuring that the people available to do those jobs are matched to the skills required and he says “It won’t be a lack of jobs that will cause unemployment it will be a lack of the right skills.”
...the impact of technology on every part of our daily life and work and every aspect of our society and economy is more acute than ever before...
AI-based technologies and their applications, from intelligent automation to voice recognition, offer an opportunity to transform organisation performance.
They can be used to unearth insights from huge repositories of structured and unstructured data, improving the speed and quality of decision-making. Or they execute processes and tasks that used to be undertaken by employees - something they can do with significant speed and accuracy, leaving humans free to tackle higher-value tasks.
However, our research shows that most organisations have still not applied artificial intelligence in the automation of their processes. In the Republic of Ireland only one in ten (10 percent) have implemented AI to automate some processes, with a quarter (26 percent) at pilot stage and two thirds (64 percent) at only a limited implementation. Meanwhile, in Northern Ireland only 12 percent have automated some processes, 20 percent have reached pilot stage and 68 percent have begun a limited implementation.
Driving artificial intelligence at enterprise scale presents significant challenges that are different from mainstream IT delivery. Many organisations face a shortage of relevant skills, with specialists in high demand. Organisational resistance may be pronounced, with employees worried about the implications of artificial intelligence adoption for their roles.