A recent survey by an audit, tax and advisory firm found many U.S. CEOs remain confident in the growth prospects of the domestic economy and their companies, and are accelerating investments in digital transformation in the face of the ongoing COVID-19 pandemic.
The 2020 KPMG CEO Outlook report features insights from 315 CEOs at large companies globally, including 100 in the U.S., who were surveyed in July and August about the business landscape over the next three years.
“U.S. CEOs are resilient and remain optimistic as they continue to rise to meet the challenges and opportunities resulting from the pandemic and ongoing economic uncertainty,” said Paul Knopp, KPMG U.S. chair and CEO. “They are accelerating the digital transformation of their businesses but also see a multitude of risks apart from the pandemic — with talent risk becoming front and center in the current environment.”
KPMG, which has its U.S. headquarters in Chicago, has a Grand Rapids location.
Key survey findings
- Forty-three percent of respondents are “more confident” in the growth prospects of the domestic economy and their company compared with the beginning of the year, while 37% said they were “more confident” in the growth prospects of the global economy.
- Low to moderate growth is expected; 39% predict 2.5-5% growth, 33% expect less than 2.5% growth and 14% predict no growth.
- Environmental/climate change risk (21%), talent risk (20%), a return to territorialism (18%), supply chain risk (15%) and cybersecurity risk (12%) were identified as the greatest threats to their organizations’ growth aside from global health security/pandemic risk.
The majority of CEOs noted the COVID-19 pandemic accelerated their digital investments and progress across numerous dimensions by at least a matter of months. These areas include:
- The digitization of operations and the creation of a next-generation operating model (74%)
- The creation of new digital business models and revenue streams (70%)
- The creation of a seamless, digital customer experience (73%)
- The creation of a new workforce model with human workers augmented by automation and artificial intelligence (66%)
CEOs cited difficulty making quick, technology-related decisions (31%) and a lack of insight into future operational scenarios, such as new ways of working (22%) as the greatest challenges associated with accelerating digital transformation within their organization. As they respond to COVID-19 and prepare for the post-pandemic reality, 74% said they were prioritizing investments in new technology and digitization over developing their workforce’s skills and capabilities (26%).
Changing work world
As a result of the pandemic, CEOs see the world of work changing in numerous ways:
- 68% said they will downsize their office space.
- 76% said they will continue to build on their use of digital collaboration and communication tools.
- 78% said remote working has resulted in significant changes to company policies to nurture their organization’s culture.
- 72% said that working remotely widened their potential talent pool.
Trust and leadership
- 77% said they need to reevaluate their corporate purpose as a result of COVID-19 to better address the needs of their stakeholders.
- 77% said their communications with employees improved during the crisis.
- 83% want to lock in the sustainability and climate change gains they have made as a result of the crisis.
- 58% said their response to the pandemic shifted their focus toward the social component of their environmental, social and governance (ESG) program.
- 67% said they already had — or planned to — publicly declare new measures this year to combat racial discrimination against Black employees.
“As much as COVID-19 changed how people work and how organizations invest in technology, companies are reassessing their values and purpose,” Knopp said.
“CEOs also are placing a greater emphasis on employee engagement and corporate culture in this new working reality.
The full report is available to download here.