Based on KPMG’s latest Global CEO Outlook survey of more than 1,300 CEOs, a number of whom are Australian, the outlook for Australia is a focus on technological disruption and growth. This disruption is being greeted as a period of opportunity with 91% of Australian CEOs confident of business growth over the next 3 years.
The Australian CEOs surveyed cited implementing disruptive technology, responding to regulatory change, managing systems of partners/alliances, fostering innovation, and limiting brand risk in an age of transparency, as their top 5 strategic priorities for the next 3 years. “We see the CEO looking to be a disruptor, not the disrupted” says Gary Wingrove, CEO, KPMG Australia.
What interested us from this report was how exactly CEOs intend to empower their people and better serve customers through such a disruptive time ahead. We believe for change and disruption to be successful it must be human led. If CEOs are to reap the growth they seek, they must shift their focus from ‘technology changing people’ and instead focus on leading people to adapt and participate in change.
Worried About Reputation, for the Short Term
Australian CEOs are highly concerned with reputational and brand risk, with it being identified as the one of the top 5 most important risks (out of 16 total). Businesses need to be in tune with their values and embrace transparency to create and sustain trust with their staff and customers. People have the digital tools they need to question a brand’s reputation, morals or social stance within seconds, and this seems to worry CEOs (and rightly so).
Consumer trends have been pointing towards the new expectation for transparency, social impact and long-term truthful consumerism. It is not clear if this trend will actually result in change, with 61% of global CEO’s believing that short term performance objectives are incompatible with becoming more socially responsible.
Change Requires Strong Values, Trust & Culture
When it comes to managing change internally, 73% of CEOs globally indicate that their business is placing more importance on trust, values and culture to sustain their future. Unfortunately, only 59% of Australian CEOs are doing the same.
With 91% of Australian CEOs expressing confidence in increasing their organisation’s headcount by up to 10% in next 1 to 3 years, the competition for talent recruitment will heat up. A lack of focus on culture and values within these organisations may prove costly. Culture and values are high priorities for top talent when choosing where to work: Especially for younger, tech-savvy talent.
Adding to this concern was the fact that only 7% of Australian CEOs identified talent development and management as a top three strategic priority in the next 3 years. It seems CEOs want the talent to bring about innovation and disruption without the hard work of investing in them and creating a meaningful workplace.
Customer Focus Needs a Process
Businesses are placing more importance on ‘protecting the best interests of their customers’ with 89% of Australian CEOs expressing this sentiment. But the process for this protection is not clear.
What is clear from the survey is that innovation and technological advancement are priorities, compared to customer focused transformation and focus. This may be put down to the fact that Australian CEOs already think they have customers figured out. A staggering 96% of Australian CEOs feel they are effective at sensing market signals; being able to understand – at a highly intuitive level – their customers’ needs and wants. Compare this to 63% of global CEOs and the alarm bells start to ring. Add in the fact that transforming towards a customer focused business model is being actively pursued by only 33% of Australian businesses, compared to 53% globally.
We have previously written about our view that innovation cannot happen without customer focus and understanding, they are one in the same process. Intuition has its place, and is best used when we innovate to provide more value to customers, not when we seek to understand our customers wants and needs in the first place. Understanding your customers is where common sense must prevail – you must talk to them, ask the right questions and unearth the deep insights that data or intuition cannot provide.
On the subject of data, 61% of Australian CEOs agreed that the depth of their customer insight is hindered by a lack of quality customer data, compared to 45% of global CEOs. This may explain the turn to ‘intuition-led’ insights in Australia given a lack of other processes. It may also explain our current poor ‘innovation’ performance in a global setting, being ranked 17th in the world.
The Main Point
Are Australian CEOs missing the point that technological advancement and disruption is actually intended to make a positive impact on people? CEOs need to design a process to understand their customers better by listening to them, so that they can ensure the innovation and disruption will deliver more value to them. Internally there must be more focus on designing an empathetic and inclusive workplace culture built on values, as without this, getting through the proven difficulties of change management unscathed may prove impossible.
By Luke Schoknecht | Director
Original image by Timon Studler