CEOs In India See Agility As New Business Currency
Two-thirds of CEOs in India believe that Agility is the new currency of business, according to latest findings in KPMG India’s fifth annual CEO Outlook. Globally CEOs are realizing that if they fail to adapt to a constantly changing world, their business will become irrelevant – stark reality CEOs currently face, said the study.
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.
According to him, 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 mentioned.
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, the study said.
The study recommends 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
Nearly three-fourths of the 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, the study noted.
Changing from within
For organizations, building resilience and acting with agility require CEOs in India to drive change from within. According to the study, their foremost priorities focus upon enhancing digital capabilities (in terms of both technology and workforce) and building cyber resilience.
Ninety two per cent of CEOs in India 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.
Nearly 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 up-skill more than half of their current workforce in new digital capabilities. Also one-third of the 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, said the study. This is necessary even as challenges and responsibilities of CEOs have grown multi-fold.
The study said that two-thirds 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.
The study also showed that Indian CEOs 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.