KPMG: Two-thirds of CEOs choose intuition over data-driven insights
By Dzof Azmi November 6, 2018
- Seventy-one percent of CEOs want to take a transformational lead now
- Forty-nine percent of CEOs are worried they cannot catch up with the rest
KPMG's 2018 Global CEO Outlook is titled "Growing Pains", and gives a picture that CEOs worldwide understand what they need to do for their companies to move forward and go digital, while prepared to swallow the bitter pill that things will not be easy.
"Seventy-one percent of these CEOs are saying that they have decided to start take a lead now, they are ready to embrace this and to be the forefront," said Alvin Gan (pic above), KPMG executive director, Management Consulting. "But at the same time 67% of these respondents are also saying that they are relying on intuition rather than data that's given to them."
The proportion of CEOs who acknowledge the opportunities, represents a slight rise overall from the 65% surveyed in 2017.
However, this 71% only represents an average, and depending on where you look around the world, the number is vastly different.
"You'll find that the Asian companies CEOs were in the lower half," said Gan, referring to the three countries in Asia there were involved in the survey (India 62%, China 58%, Japan 47%). In contrast, at the very top is the US where 91% say they are prepared to lead transformation, while in Europe, the number varies from 60-73%.
Complexity of the task ahead
It isn't that the CEOs don't want to transform, but the scope and complexity is daunting. The survey found that 65% of the CEOs say that the lead times to achieve significant process on transformation can seem overwhelming. Gan elaborated, highlighting that "49% of these CEOs are saying that they actually worried that they cannot catch up with the rest".
Vinod Kumar, Tata Communications Group CEO is quoted in the report as saying that evolving the people and processes to leverage on technology is a challenge. "There's usually a lag effect, so adoption tends to be slower than planned".
The demands for transformation at speed placed on CEOs mean that they are also stressing the need to react quickly, almost instinctively. "There is a challenge around aligning cultures and speeds of large companies with those of startups," continued Kumar.
"If you succeed, you succeed faster, and if you fail, you fail quicker," Mark A Goodburn, KPMG International Global Head of Advisory said.
Intuition over data
These speeds create an environment where decisions need to be made even when the situation is not always clear. "Sixty-seven percent of these respondents are also saying that they are relying on intuition rather than data that's given to them," pointed out Gan, with the reason given that sometimes insghts given by data and analytics models contradicted the CEO's own experience.
Still, Gan feels that CEOs would do better to incorporate data when making decisions. "They are relying a lot on intuition, but I think it's also good for them to start embracing the use of technology," said Gan, adding that the CEOs agree that the best source of data is right in front of you: in the survey, they ranked "social media" as the most trusted source of insight.
"Listen to your business, listen to your customer," concluded Gan.