Adaptability and strategic decision-making will prove to be the hallmarks of successful chief executives in the coming year, according to a global survey of business leaders. Among other challenges, CEOs will be required to adapt to the impact of digital technologies, a more mobile and dispersed workforce, as well as new regulation.
The PwC Global CEO Survey 2015 revealed a consensus amongst leaders that softer leadership skills will be highly valuable in this context. A combination of curiosity about developments in the business world, and the humility to be receptive to insights and ideas from their teams, will help leaders act decisively in response to megatrends such as the shift of markets from the developed to the developing world.
The 18th edition of the survey, which took in the views of 1,322 CEOs from 77 countries, found participants to be less optimistic about global economic growth for 2015 than they were for the previous year.
Confidence in emerging markets was particularly affected, with geopolitical and social instability playing a major role. Russian CEOs went from the most confident of those polled in 2014 to the least confident in 2015. In Africa, social instability was seen as a threat to 98% of respondents’ businesses.
In this context, more mature markets proved most attractive to CEOs. The US, China, Germany, and the UK were considered the most important to respondents’ companies’ overall growth prospects.
Threats and opportunities
The possibility of over-regulation was cited by 78% of respondents as a key business risk. This is the highest level of concern about the issue in the surveys to date and was particularly prevalent in Germany, the US, the UK, and China.
The availability of key skills was another area of increasing concern, cited by 73% of respondents worldwide, compared with 63% of participants in the 2014 edition. Access to talent was a particular priority for UK-based respondents, with 84% of them flagging it as the biggest constraint on growth.
Changes to industry regulation, increased direct and indirect competition, and changes in customer behaviour and distribution channels were seen as the trends that could prove most disruptive in the next five years.
Fifty-nine per cent of those surveyed believe there are now more potential threats to their company than there were three years ago, but respondents believe that the number of opportunities open to them has also increased.
Areas of opportunity CEOs are focusing on in 2015 include creating value through digital transformation, developing dynamic partnerships, and finding new ways of working.
Respondents said that digital technologies were creating value for their organisations in terms of operational efficiency, data and data analytics, customer experience, digital trust (including cyber-security), and innovation capacity. Meanwhile, partnerships provide access to new technologies and new customers or geographic markets as well as strengthen innovation capabilities.
Key considerations for success in 2015
The report highlights six factors to help leaders build resilience:
- Focus on what you’re good at. In the midst of so much rapid change, it is crucial to identify your organisation’s key capabilities and what makes it unique. The report recommends that organisations focus on three to six truly differentiating capabilities – any more are likely to become unmanageable.
- Re-evaluate the business you’re in. What value do you provide to stakeholders? Who are your real competitors, and are they even in your sector? Take steps to align your organisation’s capabilities, value proposition, and product and service offerings. There may be an opportunity to leverage your core strengths in a new sector.
- Anticipate policy issues. Organisations can reduce the impact of potential regulatory change by aiming for effective self-regulation.
- Build diverse yet aligned partnerships. Consider how partnerships and collaborations could enhance your capabilities.
- Transform through digital. How have digital technologies changed your stakeholders’ needs? Does your business model need to change to meet their requirements?
- Develop a good mix of talent. Draw from a variety of sources to build a diverse and technologically skilled workforce that can deliver the innovation you need to compete in the new business environment.
Key threats to their business cited by chief executives worldwide include: