This column is part of Globe Careers' Leadership Lab series, where executives and experts share their views and advice about leadership and management. Follow us at @Globe_Careers. Find all Leadership Lab stories at tgam.ca/leadershiplab
At the World Economic Forum meeting in Davos last week, PricewaterhouseCoopers released their 18th Annual Global CEO Survey based on interviews with 1,322 CEOs in 77 countries. The results were surprising: CEOs had mixed views about the future, with both a certain optimism along with an almost equal amount of reservation.
The prospects for growth
Not surprisingly, the survey indicated concern about the global economy. Only 39 per cent of CEOs believe the outlook for growth will improve over the next 12 months, compared with 44 per cent in last year's survey. Seventeen per cent of CEOs believe the global outlook will worsen.
This finding is in line with recent discussions I have been part of about what keep corporate directors awake at night. Isabelle Allen, global head of markets at KPMG, recently outlined in a note to fellow governance professionals that executives and boards need to get a better understanding of geopolitical issues. Recent political upheaval and economic crisis in various parts of the world demonstrate this need is greater than ever.
Drilling down a bit deeper into their expectations, 61 per cent of CEOs see more opportunities today than they did three years ago. The responses were regionally skewed, with CEOs from North America, Asia-Pacific and the Middle East more optimistic and their Latin American and African counterparts much less so.
The end of the Chinese miracle?
As for which markets are seen as having the greatest growth opportunities in the coming 12 months, at the top of the list among 38 per cent of CEOs was the United States, ahead of China (34 per cent) for the first time in the 18 years that the survey has been conducted.
PwC attributes this view to the fact that U.S. national GDP is 7 per cent higher than before the financial crisis, and the economy is seeing job growth, higher consumer spending, and a boost in the energy sector from the fracking boom.
This may well point to a turn of the manufacturing tide, as U.S. companies repatriate production, and China deals with fallout from corruption allegations. Such a scenario would offer opportunities for companies to revamp their supply chain, and will likely provide good prospects to the network of small and medium enterprises which support local manufacturing.
Technology drives change
Driving both growth and the challenges for CEOs is, of course, the disruptive nature of technological change. Concerns about the impact of technology on their business actually raised anxiety among 58 per cent of CEOs, compared with 47 per cent in last year's PwC survey. CEOs see technology as enabling new competitors to exploit weaknesses in their businesses, with 32 per cent naming technology as the sector from which significant competitors are emerging.
One of the biggest forces of change is the spread of mobile technologies, which are revolutionizing the ability of customers to obtain information. With more than 4.5 billion mobile phone users in the world – nearly 70 per cent of the world's population – access to information is changing the dynamics of how companies engage with their customers. Technology is also increasing the options for comprehensive data analytics, allowing companies to access, analyze and use information about their customers to a greater degree than ever. This is why 80 per cent of CEOs cite data mining and analysis as strategically important to them.
The end of industry boundaries
Increased competition and changes in customer behaviour were noted by 61 per cent of CEOs. As a result, a third say their company has entered new sectors in the last three years, and more than half (56 per cent) believe that their organizations will need to compete in new sectors within the next three years.
This will pressure companies to ensure they have the talent they need, coming from a diversified work force, and 85 per cent of the CEOs whose organizations have a diversity and inclusiveness strategy say they recognize how diversity has enhanced their business performance.
What does it mean for the future of leadership ?
Managers need to find reliable sources of information about geopolitical trends and how they might affect their organizations. A good place to start is the more than 120 discussions that were taped at Davos, which are all available online for streaming. Other good sources include reputed publications such as the Project Syndicate or the Economist Intelligence Unit.
Companies and executive education programs everywhere in the country should urgently incorporate into their training programs how technology will affect their business in the future. The skills leaders will need to acquire go beyond understanding the impact of digital and social media. They must also ensure everyone in their organization understands the impact of technology on their jobs and their companies.
Estelle Metayer (@Competia) is the principal and founder of Competia, a leadership and strategy consulting firm, and is an adjunct professor with McGill University's leadership business programs.