UK CEO Outlook 2017 Report

18 Pages·2017·0.2 MB·English

UK CEO
Outlook 2017
Disrupt and grow
June 2017
Headlines from the KPMG
Global CEO Outlook 2017
65% 74% 52%
Global Global Global
see disruption as an want their business to be say the uncertainty of today’s
opportunity the disrupter political landscape now has
greater impact
43% 75% 75%
Global Global Global
are reassessing their global footprint are spending more time are now more open to new
in line with the changing pace of scenario planning infuences and collaborations
globalism and protectionism
© 2017 KPMG LLP, a UK limited liability partnership and a member frm of the KPMG network of independent member
frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
US 82%
UK 54%
65%
80% (2016)
CEOs remain confdent in the US CEOs appear the most Reputation and brand risk
outlook for the global economy over confdent overall in their outlook for is now a top three factor that CEOs
the next three years, but this has global economic growth in the next expect will impact their business
dipped since 2016 three years growth over the next three years
© 2017 KPMG LLP, a UK limited liability partnership and a member frm of the KPMG network of independent member
frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Table of contents
Foreword 01
Characteristics of a CEO 02
The UK context 06
Talent and people 08
Innovation 09
Regulation 10
Customer-centricity 11
Risk and trust 12
In conclusion 13
© 2017 KPMG LLP, a UK limited liability partnership and a member frm of the KPMG network of independent member
frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Foreword
Listening to the views of CEOs is In an increasingly complex
a great way to check the pulse of environment, CEOs need to be
corporate UK: what’s worrying our multi-dimensional fgures, who can
business leaders, how is the market think beyond the bottom line. The
changing and what are they doing UK has become increasingly hostile
about it? to business recently, and business
leaders now need to be adept and
Simon Collins CEaEcOhs yaesa pr,a wrte o sfp tehaek K tPoM nGea Grlylo 1b,a3l0 0 Bill Michael sophisticated in protecting their brands
Chairman and CEO Outlook Study, including a Chairman and Senior from the resulting reputational risks.
Senior Partner, Partner Elect,
KPMG in the UK cohort of around 150 from the UK, KPMG in the UK As a CEO, the organisation you lead is
who lead many of the world’s largest more vulnerable – from social media,
and most complex businesses. Our 2017 report points to geopolitical change or cyber – and you have a broader set of
a complex world in which CEOs are trying to make sense responsibilities to shoulder.
of change.
And it feels to me as if CEOs are struggling to adapt to this
Last year, they told us that transformation and cyber risk new environment. In conversations with them, “disruption”
were the big opportunity and risk, but in only 12 months, is one word I hear again and again, whether that be seen
we’ve seen a dramatic shift in their thinking. as a threat or an opportunity. In reality it’s not binary: it’s
both a threat from a cyber-attack or a customer complaint
In this report, we take a look at the headline shifts going viral, and an opportunity from a new technology or
and a closer look at the issues raised by the UK’s CEO partnership. The CEO’s role in these circumstances is to keep
community, examining how current and imminent sight of what the organisation is trying to be. From a clear
change have impacted their outlook for the future, the understanding of an organisation’s purpose and value, some
factors that are highest on their agenda and those that clarity should emerge.
are driving their business decisions. We also look at how
CEOs are managing the topical issue of disruption. But to be in that position, CEOs must be open to a new and
much broader range of perspectives. For me, that means
The study gives a window into how CEOs are adapting encouraging a diversity of talent to look at things through
their own roles to lead in this very real world of constant multiple lenses. And just when you think you’ve got it right,
change, and adapting their businesses in order to try and think again - get another perspective.
stay ahead.
We are seeing a new kind of CEO emerging – someone that
As I talk to CEOs, it is clear that they are markedly embraces disruption, uses their emotional intelligence and is
different to the cynical caricature sometimes painted in suffciently agile to respond to a changing market. This report
the public eye: remote fgures focused on proft, rather explores these, and other characteristics that CEOs need in
than the good of their customers and broader society. some combination to be successful.
My experience is that most CEOs are driven by the
success of their company, their people and the impact As I move into my new role leading KPMG in the UK, I am
they have on the communities they work within. There is keenly aware of this diverse range of challenges. I am looking
a passion to make a positive difference. forward to working with you to address the challenges and
explore the opportunities in the months and years ahead.
CEO Outlook 2017 1
© 2017 KPMG LLP, a UK limited liability partnership and a member frm of the KPMG network of independent member
frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Characteristics of a CEO
Today’s CEO has to grasp a range of issues that were not
previously on the boardroom agenda. From geopolitics to “
The CEO community
new technologies and cyber risk, they must understand
these shifting dynamics - and then interpret their impact on is rich with change-
their own businesses and on the wider marketplace. makers. Ambitious
and dynamic, they
With this in mind, it is not surprising As the chief executive looks to do
that the role of the CEO has this, emotional intelligence is key – see opportunity in
changed. And as they take more for 38% of them, this is as important
personal responsibility for these as their technical skills. disruption.
new issues, they are constantly
looking to develop and learn the The research identifed three distinct Simon Collins
skills they need to manage their CEO character types - the ‘Positive Chairman and Senior Partner
Disruptor’, the ‘High EQ CEO’ KPMG in the UK
growing remit, to foresee the
and the ‘Investor CEO’. Many will
consequences of disruption and the
identify with a blend of these - they
opportunities it brings.
drive their decisions and determine
Although disruption is becoming the the culture within their respective
norm for many UK businesses, it is frms, and can make one business
unsettling. As public and consumer thrive against another.
trust continues to fall, the CEO must
provide clarity and assurance to
more stakeholders than ever before.
© 2017 KPMG LLP, a UK limited liability partnership and a member frm of the KPMG network of independent member
frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
“
“The tenure of a CEO has signifcantly decreased over recent
years. Gone are the days when a chief executive would lead
an organisation for 30 years. Now they must constantly
reinvent themselves and learn, not only through new
experiences, but also through failure. 44%
Paul Martin
Partner and Head of Retail
KPMG in the UK
believe that understanding their
personality and its limitations has
been crucial to their success
(52% globally)
“Previously, a CEO could get away with focusing the
majority of their effort on just one group of stakeholders –
their shareholders. Today, there is a new imperative. A CEO
must consider multiple stakeholders, each of whom has
the power to signifcantly impact the performance of their
business and its future prospects. The CEOs best able to
79%
balance the competing demands of multiple stakeholders,
are the ones most likely to lead their organisation to
success in the future.
Alex Holt
Global Chair, Media & Telecommunications and Partner
KPMG in the UK have been on a course or
studied for a qualifcation in
order to disrupt their role in the
past 12 months
(68% globally)
© 2017 KPMG LLP, a UK limited liability partnership and a member frm of the KPMG network of independent member UK CEO Outlook 2017 3
frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
“
“
“Positive Disruptors have a ‘care and dare’
mentality. They care deeply about their business
– and they dare to do things differently.
Paul Martin
Partner and Head of Retail
KPMG in the UK
Positive High
Disruptor EQ
Highly ambitious Driving effciencies Communicative Interpret
Embracing Accessible market signals
disruptive
Driven technologies Customer-centric
Agile models of business transformation Embracing disruption Recruiting
with innovation
Nimble Focused Transparent Engender trust
An insatiable Investment in Innovation-led transformation
appetite to disrupt innovation
“Since the fnancial crisis, banks have been focused on
rebuilding trust in their complete stakeholder group – staff,
customers and regulators. It is diffcult for people in banks to
be proud of working in an industry that is viewed negatively,
and it is up to the CEO to rebuild that confdence, engaging
both their workforce and trust externally.
Michelle Hinchliffe
Partner and Head of Banking
KPMG in the UK
© 2017 KPMG LLP, a UK limited liability partnership and a member frm of the KPMG network of independent member
frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
“
“
“Being a CEO is less about revenues and
leading from the front, but more about
bringing teams together and acting as a
catalyst to achieve better, faster results.
Chris Stirling
Global Chair, Life Sciences
and Partner The Positive Disruptor is
KPMG in the UK twice as likely to invest
signifcantly in innovation
than their peers
(41% vs. 22%)
The
Investor
Financially-astute
Global operators
Embracing cyber
Multi-area focus as an opportunity High EQ CEOs are much
Expanding into new markets more likely to be pursuing
customer-focused
Investing
Executors transformation than their
signifcantly peers (63% vs. 52%)
“With a great understanding of the core fnancials, the
Investor CEO knows how to achieve the right mix from
an organic and inorganic perspective. They know how
The Investor CEO sees
much to invest in innovation at the core, while at the expansion into new
same time identifying and executing the best deals in geographical markets as a
the marketplace in line with the strategic plan. priority in comparison to
their peers
Alex Holt (45% vs. 19%)
Global Chair, Media & Telecommunications and Partner
KPMG in the UK
5
© 2017 KPMG LLP, a UK limited liability partnership and a member frm of the KPMG network of independent member
frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
“
“
The UK context
What sets the UK CEO apart from pound after the EU referendum
his or her foreign counterparts? and the subsequent rise in input
In many respects they are costs to near-record rates, market “Businesses are keen to
remarkably similar, with over 40 volatility, regulatory uncertainty, engage with the government
of the bosses running FTSE100 or the risk of losing their foreign-
and broader society. This
f rms coming from outside the born workforce.
UK. Yet it is hard to think of willingness is there, but
This vacuum of certainty, where
chief executives in many other there is still a hangover from
settled government policy and
major economies who have had
benign economic conditions past misdemeanours, and
to deal with the same level of
uncertainty the British company once stood, is merely the broader I don’t think that feeling is
context for the UK CEO. And
chief executive has had to put completely reciprocated
that is notwithstanding on-going
up with in recent times. That has
scrutiny from the all-important right now. That is a huge
bred resilience in UK CEOs.
investor community, who analyse frustration to CEOs that I
June’s surprise election result these leaders’ every corporate talk to.
and the uncertainty surrounding move, gauging their success on
the shape and agenda of the response to (and anticipation
new government, has added of) f ve core areas that apply to Simon Collins
to the sense that geopolitics every sector: Chairman and Senior Partner
has f rmly elbowed its way into KPMG in the UK
– Talent and people
the CEO’s agenda. The obvious
challenge has, and continues to – Innovation
be, Brexit – both its importance – Regulation
for virtually every organisation in
Britain, and its sheer complexity. – Customer-centricity “Many of the big global
Chief executives in the UK then – Risk and trust
have to deal with second-order companies are looking to
effects: the weakening of the disrupt themselves and have
set up venture arms to help
them think and operate
differently.
Liz Claydon
Partner and Head of
Consumer Markets
KPMG in the UK
© 2017 KPMG LLP, a UK limited liability partnership and a member f rm of the KPMG network of independent member
f rms aff liated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
“
“