Disrupt and grow

In a world seemingly dominated by uncertainties such as Brexit, the political situation on the other side of the Atlantic, and rapidly evolving technologies, it is both refreshing and encouraging to find that Irish CEOs have great faith in their own industry as well as in the Irish economy.

KPMG's CEO Outlook measures the attitudes of more than 1,200 chief executives from across the world, including Ireland. The 2017 survey has found 84 per cent of Irish CEOs are confident about growth in the domestic economy while 93 per cent are confident of growth in their industry. This contrasts with the 40 per cent who are confident of growth in the global economy.

Of particular significance is the attitude to disruption. Instead of seeing it as a threat, the majority of Irish CEOs (90 per cent) regard it as an opportunity. Indeed, 97 per cent of Irish CEOs want their companies to be disrupters.

"This year's CEO Outlook emphasises that disruption has become a fact of life for CEOs," says KPMG managing partner Shaun Murphy. "Importantly, many see disruption as an opportunity to transform their business model, develop new products and services and to re-shape their businesses. I don't know a CEO who isn't thinking about how to drive their business in a digital world. Unless they're continually focused, they're at risk of missing out and ultimately being left behind."

But CEOs face challenges when it comes to assessing the value to their businesses of new technology. “The impact of technology tends to be overestimated in the short term and underestimated in the long term,” Murphy points out. “There are lessons in this for CEOs working to get the balance right between protecting their core business whilst pursuing the opportunities technology presents.”

The report found CEOs are wary of disrupting for disruption’s sake. Aware that new entrants want to take their share of the market, they are maintaining a tight focus on the customer, understanding their needs and articulating how the business is creating value for them.

Oracle CEO Safra Catz is quoted in the report saying: "The hit that wipes you out is the one that comes from the side. So you need to keep an eye on all directions. If I were to give anybody advice, I would say: do your job and look around, talk to your customer and stay on mission. Don't get distracted by success."

Another key finding related to the nature of the challenges facing today’s CEO. They are increasingly facing situations which are new to them and having to take leadership positions in areas where they have little personal experience. Four in five CEOs surveyed are concerned about their capabilities around mission-critical business issues they have not previously encountered.

Indeed, as recently as a decade ago, topics such as cyber security, data and analytics, artificial intelligence and cognitive computing were seen as themes for the corporate futurists and sci-fi fans. Now they are fixtures of board agendas.

Updating their skillsets

Irish CEOs are taking on this challenge by updating their skillsets. More than nine out of 10 reported having taken a course or attained a qualification in the past 12 months in order to assist them in their role. Seventy per cent agree that they are now “more open to new influences and new collaborations than at any time in their career”.

This is entirely consistent with staying abreast of change and disruption, says Murphy. “The CEOs that we work with may occasionally be apprehensive about change – but most have an appetite for tackling issues and see change as an opportunity to be explored rather than an issue to be feared.”

Turning to the high degree of confidence exhibited by Irish CEOs, Murphy sounds a note of caution as the potential impact of some developments has yet to be felt. “Brexit and perhaps to a lesser extent the threat of protectionism and US tax policies are all potential game-changers for Irish CEOs and the businesses they lead. What is clear from this year’s survey is that many Irish CEOs are optimistic about the future of their own business, despite doubts about the global economy. From the uncertainty of Brexit, the threat of protectionism and the challenges of new technology, Irish CEOs are accustomed to risk and are using it to create new opportunities.”