The world’s business leaders have opined that they view disruptive forces as an opportunity, not a threat, to their business, according to the results of KPMG’s 2017 Global CEO Outlook.
Petaling Jaya, 14 June 2017 – The world’s business leaders have opined that they view disruptive forces as an opportunity, not a threat, to their business, according to the results of KPMG’s 2017 Global CEO Outlook.
Based on the survey, which interviewed nearly 1,300 CEOs of some of the world’s largest companies, 65 percent of CEOs believe disruption can have a positive effect, while three in four say their business is aiming to be the disruptor in their sector. In ASEAN, the percentage recorded is higher with 92 percent and 83 percent respectively.
“Disruption has become a fact of life for CEOs and their businesses as they respond to heightened uncertainty,” says John Veihmeyer, Global Chairman of KPMG. “But importantly, most see disruption as an opportunity to transform their business model, develop new products and services, and reshape their business so it is even more successful than ever before. In the face of new challenges and uncertainties, CEOs are feeling urgency to ‘disrupt and grow.’”
The evolving risk landscape
Operational risk has risen to become the highest concern for CEOs overall. This is followed by risks of emerging technology, reputational/brand risks, and strategic risks.
Cyber security, which CEOs ranked as the top risk in 2016, has this year fallen to position 5 (of 16), with 42 percent say they feel adequately prepared for a cyber event – up from 25 percent in 2016. CEOs clearly believe they are making progress in their management of cyber.
However, Datuk Johan Idris, Managing Partner of KPMG in Malaysia, pointed out that this perception was recorded before the WannaCry ransomware outbreak in May 2017. According to the live tracking system at KPMG’s Cyber and Digital Hub established in Malaysia, to date, more than 530,000 computers in 150 countries have been affected by WannaCry, and this number is still expected to increase.
“In actual fact, ransomware attacks are nothing new and this latest incident reinforces the need for business leaders to remain vigilant and avoid complacency when it comes to governance in cyber space. We operate in a digital world today where breaches can happen anytime. Complacency will only increase the risks across the business, from operational to reputational, with lasting impacts,” said Datuk Johan.
Cautious optimism and trust
Amid heightened uncertainty around the global economic growth, 65 percent of the CEOs remain confident about the global economic outlook for the next three years, though this is a drop from 80 percent in 2016.
Globally, the majority of CEOs (69 percent) also remain confident in their own industry’s growth prospect. In addition, a significant amount of CEOs (83 percent) are positive about their own businesses’ prospect over the next three years.
About three-quarters of CEOs (74 percent) say their organization is placing greater emphasis on trust, values and culture in order to sustain its long-term future. This is matched by 72 percent of CEOs who correlate being a more empathetic organization with higher earnings.
KPMG’s survey further found that over the next three years, the proportion who are increasing investment in recruitment rises to 75 percent. This suggests that businesses are increasingly looking to hire more specialized talent in the years ahead – such as cognitive technology experts or those with greater insight into geopolitical issues.
This intention is aligned with the number of CEOs in ASEAN who expect to invest in Blockchain and data analytic tools (92 percent); cognitive technologies including artificial intelligence and machine learning (83 percent); and internet of things (79 percent), over the next three years.
“Greater digital investments offer companies more opportunities to secure competitive advantage. It is positive news that CEOs are still committed to invest in their people and make them important assets in the company as one way to manoeuvre around the current period of economic and geopolitical uncertainty,” noted Datuk Johan.
To view additional information about the study, please visit kpmg.com/CEOoutlook. You can also follow the conversation @KPMG on Twitter using the hashtag: #CEOoutlook.
About KPMG's 2017 Global CEO Outlook survey
The survey covers 1,261 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 21 February and 11 April 2017. NOTE: some figures may not add up to 100 percent due to rounding.
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Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.