CEOs Focus On Agility To Thrive In A VUCA World
Today’s increasingly complex business environment is placing an extraordinary stress on CEOs, who are constantly looking for a magic formula to survive in a volatile, uncertain, complex, and ambiguous (Vuca) world.
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 realize that if they fail to adapt to a constantly changing world, their business will become irrelevant. This is the stark reality that they face.
“A successful CEO now needs to be an agile CEO,” said Arun M. Kumar, Chairman and CEO, KPMG in India. Kumar believes that 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 workforce,” he said.
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.
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 internalizing 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 instill 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 expect significant return on investment from their firm’s overall digital transformation program 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 intend to up-skill more than half of their current workforce in new digital capabilities.
34 per cent CEOs in India said modernizing 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. Two-thirds of them in India believe there is still tremendous scope for them to improve their understanding of customers.
They 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 customized 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.