CEOs in India rewrite the rulebook in pursuit of growth
One of the most compelling findings in KPMG India’s fifth annual CEO Outlook is that two-thirds of CEOs in India believe agility is the new currency of business. This is in line with the views expressed by CEOs globally. They realise that if they fail to adapt to a constantly changing world, their business will become irrelevant. This is the stark reality that they face.
This focus on agility is redefining what we mean by resilience. In the past, it was about battening down the hatches in face of short-term headwinds.
“A successful CEO now needs to be an agile CEO,” said Arun M. Kumar, Chairman, and CEO, KPMG in India. “Succeeding in a world of volatility and uncertainty requires different leadership skills, particularly in large organizations. It’s no longer a question of simply defending your position and using scale to maintain competitive advantage. Today, CEOs need to be comfortable disrupting their business models by forging new strategic partnerships, considering alternate M&A strategies and increasing the skills of their workforces.”
Below are the some of the key India findings for 2019:
In 2019, the confidence of CEOs in India in the global economy has fallen significantly - only 53 per cent CEOs are confident about the growth prospects of the global economy, as against 89 per cent in 2018. Also, CEOs in India have to understand and cope with an increasingly unpredictable and fast-changing array of risks. They have identified climate change (23 per cent), return to territorialism (17 per cent) and emerging/disruptive technology risk (17 per cent) as the top three threats to their organisation’s growth for a second year in a row. Globally these numbers stood at Climate change (21 per cent), return to territorialism (16 per cent) and emerging/disruptive technology risk (19 per cent)
Leading in uncertain times
73 per cent CEOs in India as opposed to 71 per cent CEOs globally agree that the growth of the organisation relies on the company’s ability to challenge and disrupt existing business models. In this regards, Mergers & Acquisitions will play a key role in enabling organisations to respond to disruption with agility and spur business model innovation. Companies are also focusing on internalising a culture of innovation, with 80 percent CEOs in India, wanting their employees to feel empowered to innovate without worrying about the negative consequences. However, these CEOs are yet to instil such a culture in the companies; a mere 46 per cent believe that their organisation does have a culture in which ‘fast-failing’ unsuccessful innovation initiatives are not perceived in a negative manner.
Changing from within
For organisations, building resilience and acting with agility require CEOs in India to drive change from within. Their foremost priorities focus upon enhancing digital capabilities (in terms of both technology and workforce) and building cyber resilience. 92 per cent of CEOs in India expect significant return on investment from their firm’s overall digital transformation programme within the next three years, in line with views expressed by CEOs globally. 78 per cent of CEOs in India as well as globally are now much more confident of increasing the use of cloud technology than they have been in the last three years. 51 percent CEOs in India intend to upskill more than half of their current workforce in new digital capabilities. 34 per cent CEOs in India said modernising the workforce (adopting lean, intelligent automation and skills on demand) is the top strategy to ensure future readiness.
The evolution of the CEOs
There is a greater need for CEOs to act with agility and even more today given their average tenure has reduced to 5 years, even as challenges and responsibilities have grown multi-fold 66 percent of CEOs in India believe there is still tremendous scope for them to improve their understanding of customers. CEOs in India also identify protecting customers’ data as an important responsibility (increasing from 46 to 71 per cent in the past one year) to gain customers’ trust and loyalty. Similarly 72 per cent CEOs globally identify protecting customers’ data as an important responsibility. CEOs in India also heavily rely on their own expertise and insights to provide customised solutions to their customers. In fact, 74 per cent of them disregard data-driven insights because they found those to be contrary to their own experience or intuition.