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Cape Town - For South African CEOs it seems to be "now or never" to drive business transformation, according to KPMG’s 2016 Global CEO Outlook study.
About 56% of the SA CEOs believe the next three years will be more critical for their respective industries than the previous 50 years had been. About 48% of them indicated that their companies will likely be transformed into a significantly different entity in the next three years.
In their view, the next three years will be a time of unprecedented change and significance for businesses around the world, but growth will be moderate, while the competitive environment continues to intensify.
The KPMG study provides a look at global CEOs’ expectations for business growth, the challenges they face and their strategies to chart organisational success.
The SA CEOs acknowledged that change does not come easy and 70% said they are concerned about the number of issues which are now "mission-critical" and in which they have little personal experience.
Other major concerns for SA CEOs are about the loyalty of their customers (94%), the impact of global economic forces on their business (92%), the amount of time they personally have to think about the forces of disruption and innovation shaping their company's future (90%) and how the millennials and their differing needs will change their business (86%).
About 76% of the SA CEOs are concerned about having to consider the integration of basic automated business processes with artificial intelligence and cognitive processes and technology was found to be the biggest factor contributing to company growth. About 96% are concerned about whether their organisation is staying on top of what's next in services or products.
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Significant change
The SA CEOs said they know that to address these concerns they need to evoke significant change within their organisations.
About 28% indicated they will outsource internationally and 26% said they will make strategic acquisitions in key areas.
74% of CEOs are confident in their industry growth over the next 12 months.
In the survey, CEOs - including those from SA - highlighted a number of strategies they are pursuing to drive change and spark innovation. Agility is seen as a key strategy key and yet the survey found that today just 40% of organisations are highly capable of responding quickly to developments. About 43% of the CEOs said that to deliver faster one has to streamline internal processes.
Collaboration is the top strategy CEOs plan to use in order to obtain shareholder value over the next three years.
“This is going to be a new type of cooperation, according to Mark Goodburn, global head of advisory at KPMG International.
“CEOs are expected to manage the new ecosystem: shareholders, partners, customers, communities they operate in or regulators. While some of these stakeholders are not new, the depth and intensity of relationships that they have with companies will continue to increase.”
KPMG CEO in Southern Africa, Trevor Hoole, added that CEOs operating in SA are well aware of their many challenges and they are reasonably bullish about the future of the country.
"Although they are confident that their industry and companies will grow over the next year, their growth expectations are modest," said Hoole. "That said, they are grappling with a multitude of issues simultaneously."
Brazil, India and China are seen by top executives in SA as the most attractive foreign markets. While still among the leading markets, the US and China decreased since last year. Western Europe has also seen a significant decline in its attractiveness as a foreign market.
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