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The pandemic has redefined leadership

The Covid-19 pandemic has presented challenges to CEOs that few considered at the beginning of the year. Leaders are making decisions and taking on roles that require them to dynamically rethink their duty to their organization, and their organization’s duty in the world.

Every person, business and country has somehow been impacted by this crisis, and all are at different stages. Saudi Arabia reported its first coronavirus infection in early March. Soon after, a nationwide curfew was implemented and travel restrictions began to be enforced. In a visceral image of the severity of the global crisis, the annual hajj pilgrimage to Mecca was limited to around 1,000 Saudi residents, a sharp difference from the millions usually in attendance.

In an effort to bring some clarity to the complex world we find ourselves in, KPMG surveyed hundreds of CEOs from many of the world’s largest companies, first in January and then again in July and August. Our questions were aimed at determining their confidence in the future, understanding how their priorities have changed, and examining how their organizations are approaching this once-in-a-generation crisis.

Not surprisingly, the CEOs are less confident about global economic growth than they were at the beginning of the year. But growth projections and output measurements don’t tell the whole story. Corporate leaders have had to recalibrate their priorities and many have focused on what matters most—the health and well-being of their people and the societies their businesses serve.

Considering the state of the global economy and how their priorities have changed – in addition to changing consumer behavior – CEOs are accelerating organizational change to meet the demands of an evolving marketplace. This change has targeted digitalization agendas and talent pipelines in material ways.

Underlining all of these approaches is a renewed focus on corporate purpose. Leaders, often impacted by their personal experience with the pandemic, are revamping their organization’s purpose to fit today’s needs and in turn are increasingly turning to purpose when making difficult decisions.

We have uncovered some important trends and insights in this report that we hope you will find just as interesting as we do. Thank you for the trust you have put in KPMG, and look forward to your feedback on our findings of this CEO Outlook.

Key findings

  • Talent and a new working reality: Businesses are looking to change their recruitment strategies as remote working has widened their potential talent pool. While Saudi Arabia-based companies may have difficulty attracting people to move to the Kingdom during the pandemic, remote work offers alternatives for foreign talent. Companies worldwide are considering downsizing office space in line with the long-term extension of remote work and in an effort to cut costs.
  • Shifting risk agenda: Since the start of the pandemic, ‘Talent risk’ has risen to be named as the most significant threat to business growth ahead of ‘Supply chain risk’ and a ‘Return to territorialism’. Import-intensive industries in Saudi Arabia, like food and petrochemicals, have proved resilient to global trade disruptions but are likely to future-proof their supply chains in response to the pandemic.
  • A return to purpose and focus on ESG: The pandemic has increased scrutiny to business practices. As a result, CEOs have re-evaluated their organization’s purpose and have shifted the focus of their ESG agenda to the ‘S’, or ‘social’, component. CEOs in the Kingdom, who already see investor interest in ESG performance, are likely to boost transparency and reporting in the area.
  • Digital acceleration: Business leaders are betting on major dimensions of digital transformation and the majority have seen this accelerate during the lockdown. However, the pandemic has seen an uptick of cyberattacks, which has increased awareness and investment into cybersecurity.
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