As corporates in the U.S. are feeling confident about their markets and the overall economy, forecasts for revenue growth are muted, the hiring climate is tough and security threats loom. Organizations have always felt the pressure to remain on the cutting edge of technology, but CEOs are now prioritizing that strategy to stay on top and address the lofty challenges of growing, retaining talent and safeguarding data, according to the latest report from KPMG.
The auditing firm published its “Growing Pains 2018 U.S. CEO Outlook” report this week, analyzing how business executives approach technological disruption. Lynne Doughtie, KPMG U.S. chairman and CEO, says CEOs’ pressures today aren’t necessarily new, but technology presents them with novel ways of tackling them.
“The need for disruption has intensified further, and technology has emerged as the only driver of transformation for a majority of U.S. CEOs,” she wrote in the report’s introduction. “These developments have brought up some ‘old’ issues, but with a decidedly new twist.”
Confidence in the national economy is high, KPMG’s survey found, and that optimism is reflecting in CEOs’ expectations for their own firms: 94 percent of the executives surveyed said they are confident about the growth trajectory of their companies. KPMG Chief Economist Constance Hunter said in a statement that the Federal Reserve’s predictions for gradual increases in interest rates, coupled with a worldwide trend of economic growth, has CEOs looking up. However, revenue expectations remain muted, with 49 percent of CEOs saying their revenue increase will be at least 2 percent, below long-term averages of 3.8 percent growth.
A tight labor market is also weighing on the minds of CEOs. On-demand talent is on the rise, with 94 percent of CEOs using a contingent workforce, and KPMG warned that the rise of the gig economy is changing the ways workers should be compensated.
“An organization’s benefits for full-time employees should include unique growth opportunities, stimulating work and, where possible, infusion of a ‘gig’-like culture,” said KPMG U.S. People and Change Leader Claudia Saran.
Meanwhile, cybersecurity is the biggest concern for CEOs again, with more than two-thirds agreeing that a cyberattack is a matter of “when, not if.” Ninety-two percent say they’re prepared for such an attack, at least in terms of their ability to identify it, but only 41 percent consider themselves to be well-prepared for a cyber event.
Tech Brings It All Together
KPMG’s report found that technological disruption has an impact on how CEOs approach company growth, talent management and cybersecurity. As CEOs continue to feel the pressure to turn economic growth into growth for their own organizations, executives are turning to technology more than ever. Nearly all CEOs surveyed said they consider technological disruption to be an opportunity, not a threat, and 91 percent said they are ready to lead their firms through radical transformations initiated by technology.
With most CEOs believing their companies are already active disruptors, it would appear technological adoption is a no-brainer. But KPMG’s survey revealed a few ways executives are struggling to embrace the disruption. For example, CEOs are not widely planning to increase their use of predictive analytics, despite having widespread trust in the technology. Most CEOs said they have overlooked data-driven insights, and instead made a decision based on intuition or past experience. That conflicting relationship with technology could affect their ability to address challenges in talent retention and cybersecurity.
Some CEOs are still in the early stages off implementing the core elements of their cybersecurity strategies, though KPMG found that executives acknowledge the importance of long-term cybersecurity sustainability. And with corporates investing significantly in technologies that can provide a personalized customer experience, their collection and storage of sensitive customer data means cybersecurity strategies are an imperative priority.
Furthermore, KPMG’s report highlighted the connection between talent retention and technology. One CEO surveyed, Lands’ End’s Jerome Griffith, said in the survey, “I don’t think that digitalization leads to jobs’ creation or job loss. I think it changes the required skill sets.”
Executives are split nearly 50-50 on whether they believe technological disruption will lead to job losses, though it is clear CEOs expect technology to alter the landscape of both the talent and jobs available.
According to KPMG, the challenges CEOs face when navigating key areas like cybersecurity and jobs aren’t made more difficult by technology, but technological disruption is changing how those challenges are approached.
“CEOs need to be flexible and agile,” KPMG concluded, “while, at the same time, adopting a new mindset and mindfulness — to move fast, but avoid the pitfalls of purposeless decision-making.”