CEOs innovate to overcome an uncertain economy
Geopolitical uncertainty, regulatory changes and economic instability are at the forefront of CEOs’ minds around the globe as they contemplate a disruptive business environment.
Businesses searching for fresh ways to disrupt their industries encounter new challenges but also new opportunities. Innovative CEOs are better placed than ever to transform their business model, develop new products and revolutionise the way they interact with customers. To seize on emerging opportunities, CEOs are aiming to make bold decisions about how they use technology to disrupt their industry.
These are some of the insights from KPMG’s 2017 Global CEO Outlook. Compiled from in-depth interviews with nearly 1300 Australian and international CEOs, the study reveals a lot about the type of leadership our current business environment demands.
It shows leaders are striving to balance the development of new innovative solutions with the development of trust-based client relationships. Whilst these are not conflicting objectives, the skills involved in building personal relationships often differ from those involved in nurturing disruptive technologies.
Technology and innovation has outweighed broader economic trends as the focus of business leaders looking to the future of their companies. Interestingly, CEOs are still confident of the ability of their companies to overcome uncertain market conditions and deliver strong top line growth. Indeed 67 percent of Australian and 47 percent of international CEOs are very confident of their companies’ growth prospects over the next three years. This comes despite only 43 percent of Australian CEOs being confident of positive global and domestic economic growth over three years.
This optimism about their own companies is in part derived from leaders’ confidence in their ability to disrupt their industry. Three quarters of CEOs say their business is aiming to be the disruptor in its sector, with many investing in new technologies. Over the past 12 months 96 percent of Australian CEOs reported increasing investment in IoT, while 93 percent reported increasing investment in data analytics. In the next three years the majority of Australian CEOs expect high investment in cognitive technologies, IoT and data analytics. While international CEOs also report increasing investment in these areas, it seems Australia is ahead of the pack when it comes to new tech solutions.
While our firm has already made significant investments in these technologies, and others such as block chain and robotic process automation, our focus remains on the client experience. These technologies are only of benefit as far as they can be understood and embraced by clients.
Surprisingly, 30 percent of Australian CEOs reported that their businesses still struggle to evaluate the return on investment for customer-focused programs. Quantifying these returns should come hand-in-hand with an understanding of customers’ needs. It is unrealistic for businesses to expect to disrupt an industry without fully understanding its customers. What’s more, businesses that fail to properly understand their customers expose themselves to the ever increasing risk of reputational damage.
Despite the hype surrounding bold new technologies and strategies for market disruption, the most important insight from the 2017 Global CEO Outlook in my opinion is quite human – the importance of fostering relationships and trust with clients. This remains the foundation from which companies can build ambitious growth plans, especially in a climate of growing economic uncertainty.