Global consulting firm KPMG recently released its 2021 CEO Outlook Survey, which measures how leaders have adapted their business strategies and priorities during the 18 months of the global COVID-19 pandemic.
The survey asked 1,325 chief executives across 11 major markets how they navigated the pandemic and what their outlook is for the future of their businesses.
“It’s been roughly 18 months since the World Health Organization declared a global pandemic,” said Bill Thomas, global chairman, and CEO at KPMG in the survey’s foreword. “And if one word could summarize our report, it’s optimism — a remarkable and reassuring shift.”
He said that CEOs have been incredibly confident in their companies’ growth prospects and the global economy in general. Meanwhile, while they are actively hiring, partnering, and feeling a strong connection to their corporate purpose, concerns about operational matters such as supply chain resilience, cyber security, and regulatory issues are at the top of their agendas.
“A major lesson from the pandemic has been that we all need to work together to solve big problems, and importantly, ESG is front and center in most business plans,” he said.
“Our results show that (corporations) are ready to work closely with government to make good on their ESG commitments and are prepared to be held accountable for delivering on them. It’s an encouraging sign, and one I am particularly pleased to see.”
Three key findings emerged from the survey.
First, sixty percent of CEOs were optimistic about economic growth, which was a significant increase from 42 percent registered in January-February of this year.
“Overall, CEO confidence has returned to pre-pandemic levels of early 2020, despite the Delta variant slowing down the return to normal,” pointed out the survey.
They are also strongly connected to their organizations’ purpose: 64 percent said that their firms’ defining objective is to embed purpose into everything they do to create long-term value for all stakeholders.
Eighty-seven percent were looking to drive company expansion via mergers and acquisitions, as well as acquire digital capability. They expected these deals to take place within three years.
The second finding was that global organizations were supercharged to invest in environmental, social, and governance (ESG) strategies.
“Seventy-one percent said that CEOs will be increasingly held personally responsible for driving progress in addressing social issues,” the survey found. “And 56 percent admitted that with public, investor and government expectations of diversity, equity and inclusion rising so fast, they may struggle to meet expectations.”
Regarding environmental measures, 30 percent plan to invest more than 10 percent of their revenues to become more sustainable. Seventy-five percent also noted that world leaders needed to sound the alarm regarding the climate agenda. And 52 percent of CEOs at high-growth companies believe that their ESG efforts improve financial performance.
The third finding was that leaders want to build out their firms’ digital platforms to provide more flexibility at work and in their operations. Despite the agreement to create a flexible future of work, only 21 percent of CEOs said they plan to downsize their physical footprint or office space because of the pandemic and the different working habits. This was a sharp decline from the 2020 CEO pulse survey, where 69 percent said they would downsize. Also, only 37 percent of CEOs said they plan to have most employees working remotely at least two days a week.
That said, flexibility remained a priority for 51 percent of CEOs, where they looked to invest in shared office spaces. This was a significant jump from the 14 percent that the survey found earlier this year. Forty-two percent wanted to hire remote workers, allowing them to expand their talent reach.
“The global pandemic has caused business leaders to rethink their operations and the role their employees play in the future of their business,” said Gary Reader, global head of clients and markets at KPMG. “Smart CEOs are actively engaging with their workforce and using their data more effectively to rewrite their operating model to position their business for growth.”
