CEOs around the world are pushing forward a new understanding of organisational resilience. To stay in the game, businesses need to focus on agility and target growth by embracing a new mentality forward.
KPMG came out with its annual Global CEO Outlook report for 2019 earlier last week (June 3). Focusing on 11 of the world’s largest economies, Australia, China, France, Germany, India, Italy, Japan, Netherlands, Spain, UK, and the US, KPMG surveyed over 1,300 CEO from 11 key industries.
In the current climate of businesses with risk coming in from all sides- dynamic risk landscape, concerns over global economic growth and disputes, business leaders and CEOs have little time to mobilise their business for the challenges up ahead. With so much at stake, CEOs are putting organisational resilience
and the fortifying of their business with an agile approach as their top priority.
Building Organisational Resilience from the Core
“In order to be resilient, a company has to have the right leadership and one with the right mindset. Building the right culture and organisational structure are crucial.”
Henadi Al-Saleh, Chairperson - Agility
While CEOs hold a seemingly optimistic view towards their own corporation, their outlook towards the global economy depicts a grimmer reality. 94% of CEOs express a confidence in the growth of their own company within the next 3 years. However, their confidence regarding the growth of the global economy within the next 3 years drops dramatically to 62%, down 5% from 2018.
Locations in the Asia Pacific region such as Japan, India, China, and Australia show an even greater drop in confidence in the global economic growth. China for instance shows a 28% drop in confidence from last year from 76% to 48%.
A Culture of Change and Innovation to Build Resilience
On average CEOs are placed on an average tenure of 5 years, vastly shorter than they first began their careers. This means there is a greater urgency for them to make a change and impact within the organisation. Over two-thirds of the CEOs with a 5 year tenure average expressed that they feel more hard pressed to act with agility illustrating a greater need to focus efforts where there is the greatest returns.
“What mainly puts companies out of business is the disruption that they don’t see coming, or the one they see but choose to believe won’t take hold and disrupt them.”
Kathy Warden, CEO and President -Northrop Grumman Corporation
To combat unforeseeable threats and disruptions towards the business, the best approach is to build a culture of agile workers, embracing change and innovation. Prioritising organisational resilience, CEOs are trying to empower employees to innovate, without worrying about the negative consequences for them if an initiative fails. While 84% said that this was their goal, only 56% said that this was actually practiced and embraced in their company culture.
Demand for HR to Fulfill Their Part as a Strategic Function
With data analytics becoming mainstream, leaders are starting to adopt a more data driven or at the very least a data assisted decision approach. Moving on from traditional mindset and practices, CEOs will need to use hard data to support their decisions.
As it is currently, 71% of CEOs say that they have once disregarded data as it presented a view contrary to their own experience or intuition. For businesses to get the most value out of analytics, there needs to be a robust framework of checks, making sure algorithms are not based on biased information with diligent quality control so that insights are accurate and trustworthy, allowing leaders and CEOs to make data based decisions with confidence.
In line with this notion towards greater data informed strategies, Ryuji Maruyama, Managing Director of Toshiba Asia Pacific reveals in an article by Human Resources Online, HR which has evolved from it’s administrative roots to now adopting a more strategic function needs leaded who can be fair. This means a CHRO who understands and is comfortable with data, using it to identify underlying trends that goes beyond reviewing past performance, but one that is predictive and forward looking.
Streamlining operations through a culture of innovation
To make an impact, CEOs will need to make instrumental changes, prioritising frameworks that will allow for better results and overturning cumbersome procedures and traditions. To move away from less rewarding activities, business leaders will need to streamline their current operations, allowing employees to focus on more strategic functions.
Promoting an employee conscious environment
Organisational resilience starts with the people. As leaders of the business, CEOs need to create a safe and environment for employees to try out new ideas. To encourage continuous innovation without fear of failure giving people a freedom for creative solutions.
Encouraging data driven decision making with better analytics
To assist better decision making, business leaders need to set an example by using data in their decisions. Introducing the use of analytics to inform their decisions and setting up frameworks to ensure quality data.
CEOs around the world are building a more resilient business. Those who don't recognise the danger of being too slow in this fast moving age will soon find themselves irrelevant. Links overs a host of HR services aimed to streamline your company operations. Get in touch with one of our representatives to achieve your company’s fullest potential.
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