Exiting the pandemic will not mean a return to normal, say the CEOs of global companies. However, they see an opportunity to define a new one in which such factors as environmental protection, social activity, and corporate governance will be of crucial importance.
CEOs don’t have an easy life these days. Not only do they have to deal with the effects of the economic crisis, but they also have to make decisions related to the fast-paced changes in work flexibility, digital transformation, and factors related to environmental protection, social policy, and corporate governance (Environmental, Social, Governance; ESG).
65% of CEOs say managing climate-related risk will impact whether they manage to keep jobs or not – over the next five years.
Nevertheless, business leaders remain optimistic, at least when developing their own companies. As many as 67% of CEOs participating in the “KPMG 2020 CEO Outlook: COVID ‑ 19 Special Edition” survey, carried out by KPMG International, are firmly convinced that their company will record growth in the next three years.
The CEO’s optimism does not concern the outlook for global economic growth. Currently, 32% express much less confidence in the upward trend than at the beginning of this year. Interestingly, according to an analysis by the US Business Roundtable Council, CEOs of major US companies expect the negative impact of the coronavirus pandemic to be felt by 2021, with nearly a third saying it will last longer.
Fortune 500 CEOs say it will be years before the effects of COVID ‑ 19 are completely removed (from the US economy). Only 27% believe that employees will return to their offices this year, but most believe that their companies will give up on business trips for good.
Goal: society first
In the face of the economic and humanitarian crisis, CEOs put people first: employees, customers, and the entire society. The idea is for their organizations to be trusted and to be able to face critical societal challenges. Therefore, there is no doubt that we are at the stage of redefining what good leadership in the company looks like.
As we read in a study carried out by KPMG, “CEOs of global companies believe that the events related to COVID-19 have prompted them to consider whether their company’s goal meets the standards expected by stakeholders, and 79% say that as a result of the COVID-19 crisis, they had to evaluate the goals of your organization”. In addition, 79% of CEOs also admit that they feel a stronger connection with their company’s goals than before the crisis.
Risk: lack of the right talent
With accelerated digitization shaping the industry’s future, organizations will need to understand how customer behavior is changing. It will be easier because the pandemic has intensified the digital transformation.
80% of the CEOs surveyed by KPMG noticed a significant acceleration in digital transformation, and 30% say that the progress in digital transformation, which we are dealing with during the coronavirus, was several years ahead of our plans.
It is worth noting that before the pandemic, the main challenge for many organizations in the field of digital transformation was the burden and complexity of the existing IT infrastructure and the constant struggle for effective data management. And while these problems do not go away, new ways to deal with them are emerging. For example, companies currently focused on IT transformation are not just focusing on tools that could improve it but investing in talent and building a solid foundation for IT skills.
At the beginning of 2020, talent risk was only ranked 11th among the factors that could pose the greatest threat to business growth in the long term. Currently, CEOs see that without providing employees with a sense of security, companies’ assumed long-term growth prospects might be at risk.