KUALA LUMPUR (Sept 3): The global Covid-19 pandemic has drastically changed how chief executive officers (CEOs) around the Asia Pacific region feel about growth prospects of the global economy for the coming years, with now just 22% of them confident, a significant drop from 67% reported in January this year, according to a 2020 KPMG Global CEO Outlook report.
On a positive note however, the CEOs are much more assured in the resilience of their own business as 63% expressed confidence in their company’s growth for the same time period, said KPMG.
The report measures how CEOs’ priorities and concerns have changed during the global pandemic. KPMG conducted two surveys — one at the onset of the pandemic in January and the second in July and August.
During this period of unprecedented uncertainty, KPMG said CEOs now are prioritising digital transformation, talent and environmental, social and governance (ESG) factors.
It said recent developments have driven 78% of CEOs in Asia Pacific to develop a stronger emotional connection to their organisation’s purpose, with 66% stating how they responded to the pandemic by shifting focus towards the "social" component of their ESG program. The report also found that 76% have had to re-evaluate their organisation’s purpose as a result of the Covid-19 crisis.
“A majority of CEOs have undertaken critical measures to bolster their company’s medium-term resilience. This is particularly evident at the height of the crisis when business leaders worldwide took steps to maintain business-as-usual activities in answer to restricted movements.
"With the extension of the Recovery Movement Control Order (RMCO) until Dec 31, 2020, business leaders are forced to relook at their operational strategies and key to this is the ability to move away from short-term measures and prepare for mid- and long-term growth,” said KPMG Malaysia managing partner Datuk Johan Idris.
One way CEOs are collectively securing long-term growth is channelling resources towards digital transformation initiatives.
Before the pandemic, 64% of CEOs felt overwhelmed by the lead times required to achieve significant progress on digital transformation, the report said.
However, following worldwide lockdowns and the need for physical distancing, 46% of CEOs have reported that progress for their digitisation of operations has sharply accelerated, putting them years in advance of where they expected to be. Almost two out of three, or 61%, now plan to prioritise more capital investment in buying new technology and digitisation.
“Clearly, there has been a momentous change in mindset in that CEOs are now more confident and willing to invest in technology to make their companies more operationally resilient, agile and customer-focused to achieve growth during this tumultuous time. We expect digital acceleration to increase in speed and scope even after the pandemic subsides,” said Johan.
Meanwhile, CEOs have now identified talent risk — which they had initially been the least concerned about at the beginning of the year — as the main threat to long-term growth. Talent risk encompasses recruitment, retention, and overall wellbeing and health of staff.
KPMG said this could reflect the challenges CEOs face with recruiting and retaining personnel while motivating the workforce despite disruption to the usual ways of working.
Most CEOs or 72% have said remote working has caused them to make significant changes to their policies to nurture culture, while 69% reported how remote working has widened their potential talent pool for future hires.