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UK CEO Outlook 2017 Report PDF

18 Pages·2017·0.2 MB·English
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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. “ “

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