News Risk Management23 May 2018

ASEAN:CEOs optimistic about growth in the face of headwinds--KPMG

23 May 2018

An overwhelming majority of ASEAN CEOs (88%) are confident about their company's growth prospect in the next 3 years, a sentiment that is shared by 90% of CEOs globally.

However, this optimism is married with a healthy dose of realism as 77% of ASEAN leaders are predicting a cautious revenue growth of 2% or less over the next three years for their organisation, according to the 2018 Global CEO Outlook report by KPMG International.

More than half of CEOs in ASEAN (64%) also noted the need to hit growth targets before hiring new skills. Consequently, they expect headcount to increase by less than 5% over the next three years.

This evidence of pragmatism doesn’t surprise KPMG managing partner in Malaysia, Datuk Johan Idris, who said, “Across the board, CEOs are driving growth against a backdrop of significant demographic shifts, geopolitical volatility and the seemingly inevitable future cyberattacks. It’s clear that driving growth in 2018 and beyond will require CEOs to combine resourcefulness and realism in equal measure.”

Risks on the horizon

In terms of risks hampering future growth, the threat of cybersecurity is rising on CEOs’ radar; up from fifth to second place overall this year. About half of all CEOs around the world (49 percent) say that a cyberattack is a case of ‘when’, instead of ‘if’, and only half of them believe that their organization is well prepared for a cyberattack.

Other threats in the top five include talent and disruptive technology.

Threats to growth (ASEAN)
Source: 2018 Global CEO Outlook, KPMG International

Rank

Risk

1

Operational

2

Cyber Security

3

Talent

4

Emerging/disruptive technology

5

Return to territorialism

Making digital a personal crusade

Two-thirds (66%) of CEOs in ASEAN are struggling to run parallel processes to transform the digital and non-digital aspects of their business, to a greater extent than their global counterparts (30%). 

Nevertheless, ASEAN CEOs are embracing the digital agenda like never before and taking personal ownership of data and trust:

  • 72% are personally ready to lead a radical organisation transformation
  • 73% see protecting customer data as a critical personal responsibility
  • Counter to popular opinion, 87% expect AI to create more jobs than it destroys.

Datuk Johan referenced the recent outcry over the Cambridge Analytica scandal as an impetus towards customer data protection, which is increasingly seen as one of the priorities for CEOs.

“In this digital age, data protection is highly important to every individual. If customer trust is threatened by misuse of data or a breach, the consequences for the company can be severe. Hence, the move by business leaders to protect customer data will reflect positively on their organization and will consequently bolster public trust,” he said.

Disruption and trust

Instead of waiting to be disrupted, KPMG also found that 70% of CEOs in ASEAN are actively disrupting the sector they are operating in, markedly higher than the percentage recorded at the global level (54%).

When it comes to sources of information ASEAN business leaders trust the most for strategic decisions, KPMG’s study found their trusted sources ranked as follows: social media (87%), independent secondary information providers (81%), open data from government agencies (71%), traditional media (65%) and government commissioned research (51%).

The 2018 KPMG Global CEO Outlook report can be found here.

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