Given today’s dynamic risk landscape, concerns over global economic growth indicators, and the ongoing pressure to disrupt, CEOs are focused on building a new organizational resiliency.
Dynamic risk landscape
In 2019, environmental and climate change is the biggest threat to growth over the next 3 years, climbing from its fourth-placed position in 2018. This is closely followed by disruptive technology risk and the threats posed by a return to territorialism.
Societal concerns over climate change mean that stakeholders — from customers to regulators — are putting increasing pressure on organizations and their leaders to respond.
Over three-quarters of CEOs (76 percent) say that their organization’s growth will depend on their ability to navigate the shift to a low carbon, clean technology economy.
Conflicting global outlook
The 2019 Global CEO Outlook uncovers increasing concern about the health of the global economy. While CEOs are confident in the underlying fundamentals and growth prospects of their businesses over the next 3 years, this confidence is not matched by their views on the global economic outlook.
Nearly all CEOs (94 percent) said they are confident in their company’s growth prospects over the next 3 years. This drops to 62 percent for those who are confident in the global economy, a 5 percentage point drop in confidence since 2018. In the four major economies, — Australia, the UK, France and China — less than half of CEOs are confident in the global economy.
Confidence in global economy’s 3-year growth prospects, by country
Source: 2019 Global CEO Outlook, KPMG International.
New competitive age
Complacency can be fatal in today’s dynamic markets. Business models that have lasted for decades are now under increasing threat as a result of digital disruption.
Our findings show that chief executives recognize that the rules of the game have changed, and a new resilience is required. A significant majority (71 percent) said that their company’s growth relies on their ability to challenge and disrupt any business norm.
We also saw a significant increase in CEOs saying that their company is actively disrupting their sector rather than waiting to be disrupted. In 2018, 54 percent said they were on the disruptive front foot, but in 2019, it has increased to 63 percent.
Throughout this document, “we”, “KPMG”, “us” and “our” refer to the network of independent member firms operating under the KPMG name and affiliated with KPMG International or to one or more of these firms or to KPMG International.
The views and opinions expressed herein are those of the interviewees and survey respondents and do not necessarily represent the views and opinions of KPMG International or any KPMG member firm. KPMG’s involvement is not an endorsement, sponsorship or implied backing of any company’s products or services.