More New Zealand business leaders are feeling less confident about tackling disruption, according to the 2018 KPMG New Zealand CEO Outlook Survey.
Last year, the same survey found 88 per cent of CEOs were confident they were disrupting their sector rather than waiting to be disrupted.
In 2018, this figure has dropped to 28 per cent – a major change in sentiment, the report states.
If transformation is focused on enhancing customer experience, developing new products and services or reinventing internal processes, the survey data tells a concerning story for New Zealand organisations, reports KPMG.
The 2018 KPMG New Zealand CEO Outlook Survey is run in conjunction with a KPMG Global survey of 1300 CEOs across 52 countries. KPMG says 50 New Zealand CEOs from different industries were surveyed.
Just over half of New Zealand CEOs (58 per cent) surveyed are “personally prepared to lead their organisation through a radical transformation of its operating model to maintain competitiveness”, compared to the global metric of 71 per cent.
Yet, the data suggests that New Zealand CEOs understand the challenge, with nearly all (98 per cent) positively viewing digital transformation as an opportunity rather than a threat, says KPMG.
However the majority (64 per cent) acknowledge that their organisation is struggling to keep pace with technology innovation, compared to the global response of 36 per cent.
Virtually all see digital transformation as an opportunity rather than a threat, yet only 26 per cent of Kiwi CEO respondents (compared to 44 per cent of their global counterparts) are confident that existing leadership is fully equipped to oversee radical transformation of their organisations, notes KPMG New Zealand CEO Godfrey Boyce.
“While transformation isn’t easy, we believe there are some fundamental principles that can provide a roadmap for any future-state endeavours. One of these is a relentless focus on understanding the customer, and using technology to deliver an outstanding customer experience,” says Boyce.
The new business advantage
“The digital transformation challenge is on,” says Frances Valintine, founder, Tech Futures Lab and chair of the digital economy and digital inclusion advisory group.
“Algorithms are the business advantage,” says Valintine, commenting on the report findings.
“New knowledge and bravery is the antidote to indecision. While the impact of artificial intelligence on business cannot be denied, the impact of AI will be insignificant in comparison to operating a business using outdated knowledge, analogue experience and traditional hierarchical structures and systems.”
Algorithms are the business advantage
She asks: “What will it take for businesses to invest in talent, capability and skills to help shape the future? When will companies shift from treading water to actively planning for a digitally transformed future? With little over a year until 2020, I would recommend the conversation needs to start now.”
It was great to be invited to comment on the NZ findings of the global KPMG CEO survey. However, it provides further evidence that NZ organizations are caught between knowing what is coming yet too risk adverse to take on the challenge. https://t.co/GShxcJHzFA— Frances Valintine (@francesvnz) August 6, 2018
‘Become agile… from the top’
KPMG says New Zealand organisations can reap major gains by taking a digital approach, using solutions that are appropriate to the market.
“The secret to success is to start with a small investment and clear scope to deliver the first ‘wins’,” the report states.
The report offers three steps organisations can take to navigate the digital economy.
Learn digital: To lead digital transformation, the executive team and board must understand the opportunity, the current possibilities and what is working in other organisations, the report states.
Start by learning through a mix of activities and this must be ongoing, it further advises. “You and your teams can attend formal programmes, receive advice from organisations that are ahead, and from people with war stories of failure. Some of these people will be in your own organisation – engage them.”
Start small and think big: KPMG recommends making small investments in projects with specific scope to make rapid progress and/or to understand the challenges ahead.
“Jumping into a large scale project is ‘old world’ thinking,” it points out. “Successful transformation is a series of incrementally larger projects, each building on its predecessors successes and failures (yes, there will be failures).”
Become agile...from the top: Digital transformation is about people, process and technology, the report states.
“There are likely to be pockets of agile capability in your organisation, but how could that be extended across the organisation to introduce new ways of thinking and acting? Start leading and governing in this agile world. This needs to be led from the executive to enable your organisation to transform at pace.”
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