Asean CEOs cautiously optimistic about growth in the face of unprecedented headwinds
By Digital News Asia May 23, 2018
- 64% noted the need to hit growth targets before hiring new skills
- Instead of waiting to be disrupted, 70% of CEOs in Asean are actively disrupting
THE outlook appears to be bright as 88% of Asean CEOs are confident about their company’s growth prospect in the next three years, a sentiment shared by CEOs globally (90%).
However, according to the 2018 Global CEO Outlook report by KPMG International, this optimism is married with a healthy dose of realism as 77% of Asean leaders are predicting a cautious revenue growth of 2% or less over the next three years for their organisation.
More than half of CEOs in Asean (64%) also noted the need to hit growth targets before hiring new skills. Consequently, they expect headcount to increase by less than 5% over the next three years.
This evidence of pragmatism doesn’t surprise Johan Idris, managing partner of KPMG in Malaysia, who commented: “Across the board, CEOs are driving growth against a backdrop of significant demographic shifts, geopolitical volatility and the seemingly inevitable future cyber-attacks. It’s clear that driving growth in 2018 and beyond will require CEOs to combine resourcefulness and realism in equal measure.”
The ever-present risk of a cyber-security threat is rising on the radar; up from fifth to second place overall this year in terms of risks hampering future growth. Digital innovation can create significant value across business models, customer experience and operations.
But greater connectivity brings increasing cyber vulnerability, and about half of all CEOs around the world (49%) say that a cyber-attack is now a case of ‘when’, instead of ‘if’.
And yet, many CEOs are concerned about the robustness of their defences; only half of CEOs in Asean believe that their organisation is well prepared for a cyber-attack.
“Smart leaders are those who are making cyber-preparedness a board priority, stress-testing the resilience of their systems and people to withstand an attack. Ultimately, having a robust cyber-defence in place is critical to secure key stakeholders’ trust,” observed Dani Michaux, KPMG’s Head of ASPAC Cyber Security.
Making digital a personal crusade
Two-thirds (66%) of CEOs in Asean are struggling to run parallel processes to transform the digital and non-digital aspects of their business, to a greater extent than their global counterpart (30%).
Nevertheless, Asean CEOs are embracing the digital agenda like never before and taking personal ownership of data and trust:
- 72% are personally ready to lead a radical organisation transformation
- 73% see protecting customer data as a critical personal responsibility
- Counter to popular opinion, 87% expect AI to create more jobs than it destroys.
Johan referenced the recent outcry over the Cambridge Analytica scandal as an impetus towards customer data protection, which is increasingly seen as one of the priorities for CEOs.
“In this digital age, data protection is highly important to every individual. If customer trust is threatened by misuse of data or a breach, the consequences for the company can be severe. Hence, the move by business leaders to protect customer data will reflect positively on their organisation and will consequently bolster public trust,” he said.
Disruption and trust
Instead of waiting to be disrupted, 70% of CEOs in Asean are actively disrupting the sector they are operating in, markedly higher than the percentage recorded at the global level (54%).
When it comes to sources of information Asean business leaders trust the most for strategic decisions, KPMG’s study found their trusted sources ranked as follows: social media (87%), independent secondary information providers (81%), open data from government agencies (71%), traditional media (65%) and government commissioned research (51%).