Fintechs a major surprise
Just 20 years ago, CEOs could never have predicted that their greatest competition would come from a tech firm like Google
In 1997, CEOs were classified "cyber savvy" in a survey if they had logged onto the Internet 10 days or more in a month.
It is hilarious now, but CEOs back then could never have imagined how ubiquitous the Internet would become or how prolific technological innovation would be.
"Twenty years ago we would’ve said in our business that the banks are a threat or the medical schemes are a threat. We certainly wouldn’t have said Google is a threat; no-one would have spotted these fintechs," says Ian Kirk, CEO of Sanlam, who in 1997 was the head of an insurer later bought by Liberty.
In its survey of 377 CEOs that year, PwC found that 20% of them believed e-commerce would completely reshape competition in their industries, while 59% said it would have a "significant impact".
Fast-forward 20 years and one-third of the 1,379 CEOs interviewed in PwC’s latest global CEO survey say technology has indeed had a significant impact over the past two decades, but believe more is still to come.
Nearly three-quarters cite the speed of technological change as one of the biggest threats to their organisations’ growth prospects.
"Businesses today are more complex because everything happens in real time," says former Standard Bank CEO Jacko Maree. "Strategy changes have become much more frequent for companies, which have to be much more nimble. That’s a function of innovation and disruption."
To respond to this disruption, including changing customer expectations, it’s become more important to recruit people from diverse backgrounds with varied experience, who can challenge the way things are done, says Kirk.
Some things haven’t changed much in 20 years. Over-regulation remains a major concern, as do internal costs and workforce skill levels. Despite technological advances, CEOs still worry they won’t find people with the skills they most want, which today include problem-solving, creativity and emotional intelligence.
But the starkest difference between the two surveys (perhaps unsurprising, given the events of the past year) relates to perceptions of globalisation.
More than half of the inaugural 18-page survey, released early in 1998, was dedicated to globalisation and the expansion plans of these CEOs.
"CEOs are optimistic in part because they like what they see on the geopolitical scene. They have a very upbeat perspective of their freedom to move capital, technology and goods around the world," the survey found.
In the 2017 edition, where an entire chapter of the 40-page report is dedicated to "Making globalisation work for all", 74% of CEOs are concerned that geopolitical uncertainty will derail their growth prospects, while 82% list uncertain economic growth as their greatest threat.
CEOs recognise that globalisation has had its shortcomings. While nearly all those surveyed agree it has created a skilled and educated workforce, as well as improved the ease of moving capital, goods and information, 44% say globalisation has done nothing to close the rich-poor gap.
"Globalisation and technological advances demand a new style of leadership to manage heightened anxieties," the survey authors find.
Norman Mbazima, deputy chairman of Anglo American SA, says: "Increasing the bottom line is still an imperative, of course.
"But business leaders are no longer solely focused on maximising profits.
"Beyond this, we play numerous other roles: managing competing social and environmental interests; demonstrating our commitment to larger national and global development goals; and playing a mediating role in matters that go beyond our remit, at times."
It’s no longer enough for corporations to create jobs and deliver innovative products, says PwC. CEOs must ensure "the benefits of business go to everyone".