KPMG survey suggests Canadian CEOs may be feeling overconfident about looming challenges
TORONTO, June 28, 2016 /CNW/ - KPMG in Canada today released the 2016 Canadian CEO Outlook, revealing that Canadian CEOs are confident in the state of their organizations and industries, and their ability to outperform against the general economic backdrop. While this confidence sounds promising, there are some remarkable contrasts from their global counterparts. Canadian CEOs, for example, appear more insular in their thinking, they are less inclined to drive significant business transformation and are more concerned with existing customer loyalties and accessing talent, than their global counterparts. Canadian CEOs also exhibit a heightened sense of confidence when it comes to cyber security.
"Despite all the disruption currently rocking our national economy – from the oil and gas industry to our ever-fluctuating dollar – corporate leaders in Canada are largely confident about their short-term prospects and even more optimistic for the growth of their own companies, and the Canadian and global economy over the next three years," said Bill Thomas, Chief Executive Officer and Senior Partner, KPMG in Canada and Chair of KPMG's Americas Region. "Yet, there appears to be a strong disconnect between the concerns CEOs identified, or in some cases didn't identify, and the areas they've selected for strategic focus."
The 2016 study by KPMG of 53 Canadian CEOs from companies across eleven industries (part of a broader survey of 1,300 CEOs in 28 countries), found that although 58 percent of the Canadian leaders acknowledge that Canada is in a state of slow growth, 96 percent are confident in the growth of their own company over the next three years. Additionally, over half predict top-line growth of 2-5 percent, and all anticipate headcount growth in the same time period (over a third predicting up to 25 percent).
Further, while executives acknowledge that they are managing during a time of disruption and change (75 percent agree that the next three years will be more critical to their industry than the previous 50), Canadian leaders do not appear to be backing that belief up with action.
Building loyalty and truly understanding your customer: A disconnect
Virtually all Canadian CEOs (98 percent) say customer loyalty is their number one concern. Ninety-two percent acknowledge concern over their ability to stay on top of what's next in services and products, and 91 percent say they are worried about how millennials and their differing needs will change their business.
With close to three quarters (70 percent) of Canadian CEOs ranking new customers as the key source of growth over the next three years – the customer is a clear priority for Canadian leaders. Yet, just over half are using data and analytics (D&A) to better understand their current customers and drive strategy and change. Perhaps more surprisingly, only 21 percent of Canadian CEOs are planning to invest in D&A for the future.
D&A – a missed opportunity
Canadian CEOs believe they are using D&A effectively (66 percent), with 32 percent believing they are leaders in using D&A. However, executives' approach to D&A is operationally-focused, rather than driving innovation and a deep understanding of the customer and market. Survey results show the top use of D&A is to analyze branding via social media. Only 57 percent use D&A to drive strategy and change; 55 percent use it to develop new products and services and 40 percent leverage D&A to find new customers.
Cyber (over) confidence?
Perhaps surprisingly, cyber-attack preparedness is not a big concern for Canadian CEOs. More than three quarters of CEOs believe they are somewhat prepared for a cyber-attack event, with the remaining 13 percent feeling fully prepared.
Currently, only eight percent of Canadian CEOs indicate that minimizing cyber security risk is a strategic priority. Once Canadian businesses are required by law to reveal a cyber-attack, their strategic priorities may change.
To learn more about these and all the study results, visit kpmg.ca/CEOOutlook.
About KPMG's CEO Outlook
The CEO Outlook survey includes perspectives from 53 Canadian CEOs, and is part of a KPMG global study including almost 1,300 international CEOs. A majority of the Canadian CEOs who responded (87 percent) represent publically owned companies and over half of which report revenues between $1.3 billion and $12 billion (28 percent earning $13 billion or more, and 19 percent between $668 million and $1.2 billion). Of the respondents, 79 percent have held their position for a minimum of 6 years and 43 percent of which have been with their company for over 15.
The study represents CEOs of companies from a wide range of industries, the top three being banking, energy and utilities, and infrastructure. CEOs from retail, automotive, manufacturing, insurance, telecom, technology, investment management, and life sciences sectors were also represented.
KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative ("KPMG International"). KPMG member firms around the world have 174,000 professionals, in 155 countries.
The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.
SOURCE KPMG LLP
Image with caption: "The race is on (CNW Group/KPMG LLP)". Image available at: http://photos.newswire.ca/images/download/20160628_C2807_PHOTO_EN_722574.jpg
For further information: Julie Bellissimo, National Manager, Communications, KPMG in Canada, 416.777.3988, [email protected]