Irish businesses excited about the future
Irish CEOs predict further growth, according to a survey by KPMG
KPMG managing partner Shaun Murphy: “The commitment of CEOs to keeping up with and understanding the implications of technology has become an even greater acid test of leadership.”
The world is changing for CEOs and how they lead and grow their organisations. KPMG’s third annual CEO Outlook gathered the perspectives of CEOs of large companies in the Republic of Ireland and Northern Ireland to get their views of the highest-priority opportunities and greatest challenges they face. The survey compared their views with their global counterparts and explored a broad range of business drivers, risks and pain points.
In 2017, Irish CEOs and their global counterparts were excited about the future: they saw technology-driven change as a significant opportunity to disrupt their sector. That optimism continues in 2018, with Irish business leaders showing strong faith in the economic environment.
However, that optimism is tempered by caution and realism, with a clear recognition that in order to grow their businesses, they need to respond to an increasing list of complex challenges and “growing pains”. While the CEOs surveyed still predict their businesses will grow in the coming year, many say they need to hit growth targets before they start hiring new people.
The impact of tech
One of the recurring themes of the research is that technology continues to command considerable attention – as an enabler, a disrupter and, with the threat of cyber attacks, a significant risk. Data privacy is also understandably high on the CEO agenda. And even with the increased reliance on data-driven models and analytics to make decisions, many CEOs are also placing value on their experience and intuition in making the difficult strategic calls for the future of their organisations.
In terms of economic growth, Irish business leaders expect growth to continue over the next three years, but expectations are modest. Seven in 10 (72 per cent) expect revenue growth of 2 per cent or less and just over two thirds (68 per cent) expect headcount growth of under 5 per cent. Meanwhile, just over two thirds of respondents (68 per cent) expect headcount growth of under 5 per cent.
Irish CEOs see three important threats to this growth with cyber security, a return to territorialism worldwide and operational risk as the biggest challenges to their business. Concerns about the return to territorialism were highlighted in a number of countries and also cited as one of the most important issues for business leaders in Ireland.
“Brexit, US tax policy and the threat of protectionism in the form of trade wars have all moved geopolitical issues up the risk agenda for Irish business with international operations,” says KPMG managing partner Shaun Murphy
Reinforcing the extent to which cyber security is impacting on their thinking, the survey found a third (32 per cent) see the issue of a cyber attack as a case of when not if, with only 48 per cent confident In their ability to identify new cyber threats and only 44 per cent confident in their levels of preparedness. Meanwhile, just over a half (56 per cent) feel able to manage external stakeholders in the event of such an attack.
Disruption is being welcomed as an opportunity by 96 per cent of CEOs in Ireland and, encouragingly, only 16 per cent believe their organisation is struggling to keep pace with the rate of technical innovation in their sector. In fact, most (84 per cent) are actively disrupting the sector rather than waiting for it to be disrupted by others.
Meanwhile, more than three quarters (76 per cent) of CEOs are prepared to personally lead their organisation through a radical transformation to maintain competitiveness. However, one in five (20 per cent) have concerns about their current leadership team and whether it is fully equipped to oversee the radical transformation their business needs.
“The commitment of CEOs to keeping up with and understanding the implications of technology has become an even greater acid test of leadership and in a shorter time frame then previously imaginable,” says Murphy.
Finally, almost half (48 per cent) of those surveyed have already begun a limited application of artificial intelligence (AI) in the automation of processes. However, 96 per cent believe the most likely impact of artificial intelligence and robotics technologies will be to create more jobs than it eliminates.
Find out more about the survey at www.kpmg.ie