CEOs Consider Disruption as Opportunity

A recent KPMG International outlook reveals that disruption is a reality that has become a part of life, and 65% of global CEOs do not consider disruptions and the accompanying uncertainties as threats. Instead, they consider them as opportunities to transform their organization. KPMG’s “2017 Global CEO Outlook” finds that though CEOs are still optimistic about the future of the global economy, their optimism has shrunk. In 2016 80% of the CEO respondents were confident about their company’s future, but this year only 65% are confident.

“Disruption has become a fact of life for CEOs and their businesses as they respond to heightened uncertainty,” says John Veihmeyer, global chairman, 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 more successful than ever before. In the face of new challenges and uncertainties, CEOs are feeling urgency to ‘disrupt and grow’.”

The 2017 Global CEO Outlook is based on the responses of about 1,300 CEOs from 10 of the largest economies in the world.

CEOs are embracing disruption and while 74% of the global CEOs are striving to be a disruptor in their industry/space, 70% are open and willing to embrace new influences and forge collaborations. To make their organizations more resilient to change, CEOs are making their core business strong. They are also investing and making innovation their top strategic priority. To keep up with the change, 68% CEOs have undertaken formal training to upgrade their skills in the past 12 months.

Source: 2017 Global CEO Outlook

Though the onslaught of disruption in the recent past has caused a lot of uncertainty, 65% of the CEOs were still confident about the growth of the global economy. However, the level of confidence is down from 80% being confident in 2016. The report also found that confidence in banking, retail, consumer, and energy industries was upbeat compared to the other industries. But 83% CEOs (down from 89% in 2016) had confidence about their company growing in the next 3 years.

Country-wise, the confidence of only US-based CEOs had increased since 2016. In Europe, though the confidence was positive, it was less compared to 2016. The confidence and optimism of the countries in the Asia-Pacific region had faded drastically since 2016.

Source: 2017 Global CEO Outlook

Tax, was a major geopolitical uncertainty and we were “in a period of unprecedented change in relation to tax and trade policy” according to Jane McCormick, global head of tax, KPMG. On an average, 67% of the CEOs were expecting an increase in tax rates in the next 3 years. But, in some countries the expectation was higher with 81% of UK CEOs expecting an increase in tax rates, 80% from France, 76% from China, and 74% from Spain and Germany.

Geopolitical uncertainty was another major deterrent, with 52% CEOS believing that the changing political landscape will affect business in the next 3 years. To overcome this uncertainty, companies are hiring specialists (69%) and planning for various scenarios (75%).

With the risk landscape constantly evolving, 69% CEOs have increased their investments in governance and risk management

Source: 2017 Global CEO Outlook

This article was originally published on Read IT Quik

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