By Banele Ginindza for IOL
The CEOs of the world’s largest businesses are increasingly optimistic about the outlook despite the Covid-19 Delta variant slowing down a ‘return to normal’ – their confidence in both the global and local economy has returned to levels not seen since the start of the pandemic.
According to KPMG South Africa’s 2021 CEO Outlook, in partnership with Business Leadership South Africa (BLSA), 88 percent of local leaders said they expect aggressive growth, and were looking to make acquisitions in the next three years to facilitate this and transform their businesses.
The 2021 Global survey draws on the perspectives of 50 CEOs across 10 industries, and their perspective is closely aligned to the global average of 87 percent. The survey included leaders from 11 key markets (Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, the UK and the US) and 11 key industry sectors (asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology and telecommunications).
As South Africa’s economy is forecast for a modest 2 percent growth in 2022 with the prospect of a stronger global economy, CEOs are looking to invest in expansion and business transformation.
The survey reveals that 62 percent of senior executives are identifying inorganic methods including joint ventures, mergers and acquisitions and strategic alliances as their organisation’s main strategy to support their growth.
“Despite the risks, there is a clear road to renewal theme emerging this year and no doubt, South African CEOs are both optimistic about growth and are placing a specific emphasis on leading with purpose and digitally transforming their businesses while upskilling an agile workforce,” said Ignatius Sehoole, CEO of KPMG South Africa.
More than half of the CEOs surveyed indicated that organisational purpose will have a profound impact on business – driving performance, shareholder returns and strengthening employee engagement.
“However, while we drive growth, we also face a tough task – leading companies in a time of continued uncertainty where markets and forecasts are dynamic in nature. The main threats to business identified in the survey not surprisingly then, include supply chain, operational concerns and cyber security; followed by climate change, regulatory and emerging or disruptive technology risks,” said BLSA CEO Busi Mavuso.
Some CEOs were embracing the need to push the boundaries of their businesses with quicker shifts in digital transformation strategies and investments a priority.
About 74 percent indicated that technological disruption was more of an opportunity than a threat.
The report said not only were 58 percent well prepared for future cyber-attacks but 54 percent were shifting towards a cloud-first mindset, and aiming to partner with a third-party cloud technology partner in the next three years.
It said similarly, 70 percent were placing more capital investment into buying new technologies.
He said 58 percent of CEOs believe that the top success factor in ensuring that employees were engaged, motivated and productive in the hybrid work model, was investing in digital training, development and upskilling them.
The report said stakeholder expectations of businesses had risen where the actions of organisations and their leaders were under increasing scrutiny, with pressure to demonstrate trust, transparency and purpose.
This means that while employee-first commitment emerges, CEOs were also looking to embed environmental, social and governance (ESG) more strongly into their strategies.
“80 percent recognise that large corporations have the resources to help governments find solutions to pressing global challenges and this becomes a business-critical consideration,” Sehoole said.
Results indicate that 30 percent were planning to invest 10 percent or more of their revenue into the E of ESG, but 68 percent indicated government stimulus was required to turbocharge climate investments made by the business community.