The public have more in common with CEOs than you might think

Author: Suzanne Snowden, Director, Global Thought Leadership Suzanne

Over the years, the issue of public trust has been climbing steadily up the agenda of global CEOs. Indeed, it was one of the biggest risers on the list of possible threats to business growth in our 20th CEO Survey, with 58% admitting that the deterioration of trust in business was either somewhat or extremely concerning. 

In light of this increased emphasis on trust, we decided that for this year’s survey we needed to learn the opinions of the public – as well as CEOs – on issues such as growth, jobs and technologies. So we asked 5,351 members of the public, in 22 countries, the same questions that were answered by the 1,379 CEOs that we polled. The interviews were conducted in December 2016 using an online survey of global consumers.

Since both consumers and CEOs experienced a tumultuous year in 2016, I was surprised and also a little worried to discover that a higher proportion of consumers were more optimistic than business leaders about the economic outlook of their country. Over a third (34%) of people felt that their national economy would improve over the next year, compared with 29% of CEOs. However, in our most recent confidence check CEO’s confidence in their organisation’s short term growth prospects is up in the first half of 2017.

But, most interestingly, was the different public view on growth itself.  More than half of the consumers we polled were not convinced that economic growth matters that much to them or their family’s well-being.  This leads me to wonder why governments feel so under pressure to deliver it.  I happened to spot a new book by Lorenzo Fioramonti from the University of Pretoria this week on this emerging area of research.

Although, for the most part, consumers and CEOs don’t see eye to eye, they did come to similar conclusions in some key areas. Both believe that technology will have a big impact on the workforce, with 79% of consumers and 80% of CEOs expecting job losses as a result of greater use of automation and technology. This issue will become more pressing as new technologies continue to evolve and threaten to disrupt both business models and taxation systems. Also, consumers and CEOs agreed that the biggest threat to trust in business today is data privacy and ethics. CEOs were more acutely concerned about this in light of recent cyber attacks and data breaches.

Another area where consumers were in broad agreement with CEOs was around the benefits and pitfalls of globalisation. On the upsides, both agreed to some or a great extent that globalisation has helped to facilitate trade and enable universal connectivity.  On the downsides, both felt that globalisation had ‘not at all’ helped to bridge the gap between rich and poor. And, worryingly, in terms of the role of ‘the market’ in alleviating the risks of climate change and scarce resources, nearly a quarter of consumers and well over a quarter of CEOs agreed that globalisation had done nothing at all to help in this respect.

Consumer poll

I was impressed to find that business leaders were realists and, in some areas, more thoughtful about the impacts of globalisation on citizens and society than the public. Still, consumers aren’t blind to the trade-offs and they understand that open markets make it easier to move capital, goods and information around the globe. Inevitably, citizens from different countries had different perspectives on the role of business in society. Nevertheless, the need for businesses to increase their focus on operating in a way that takes people and communities into account drew the largest response from consumers.

Finally, as the world has changed hugely since we did our first CEO Survey back in 1998, we threw in a question about how CEOs are coping with technology in their own lives.  Perhaps it's an age thing – the average CEOs in our research is 55 – but on the surface it seems as if CEOs have some catching up to do. Consumers are way more active on social media than CEOs, more likely to purchase goods online and more likely to have a robot in their homes than CEOs and…, more likely to be active gamers (perhaps the ‘corporate Frank Underwoods’ were a bit evasive here!). The one area CEOs out-scored the consumer in terms of being tech savvy was in their consumption of content online.  Here’s to hoping CEOs are more likely than the general public to read this blog.

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Suzanne is Programme Director for PwC's Annual Global CEO Survey and Global Director, Thought Leadership at PwC. She has a passion for scanning the horizon for the latest trends and issues that impact global business. She pilots PwC's network of thought leaders engaging in the creation, development and presentation of PwC's research and insights.


Banking on disruption: how the BCM sector can turn change into a competitive advantage

Author: Kevin Burrowes, Clients and Markets Leader, PwC UK Kevin Burrowes

The banking and capital markets (BCM) sector is being rocked by some of the biggest disruptive challenges that exist today. Its growth is under threat from over-regulation, rapid technological change, shifting customer behaviour and the arrival of ambitious market entrants that are contesting its hegemony. No surprise, then, that our 20th CEO Survey revealed that BCM was one of the three sectors most affected by disruption and change – surpassed by only insurance, and entertainment and the media.

Of course, disruption and change are not necessarily bad news. I know that BCM leaders are conscious that today’s marketplace presents as many opportunities for their organisations as it does threats. In particular, they have the opportunity to reinvent themselves as leaner and nimbler operations that can form more personal relationships with their customers and better respond to their needs.

To reach this place, however, BCM organisations need to be more proactive about boosting innovation and customer intimacy, while driving down costs. They also need to look at how they can build the workforce and develop the technological capabilities that will get them to where they need to be in future.

Understandably, given its far-reaching impact on both our economy and society, technology is a major preoccupation for BCM leaders. The vast majority (84%) of BCM CEOs who responded to our survey believe that technology will completely reshape, or at least have a significant impact on, competition within their industry over the next five years. This presents them with a major challenge in terms of living up to customer expectations. Banking is a notoriously complex business where security is of paramount concern, yet customers still expect banks to provide the same easy and intuitive online experience as retailers and tech companies.


RegTech is another important driver of change. Global demand for regulatory, compliance and governance software is expected to reach US$118.7 billion by 2020, according to fintech insights provider Let’s Talk Payments. With a plethora of RegTech products to choose from, BCM leaders must work out how they can best boost their organisation’s competitiveness by using technology to cut the cost of regulatory compliance.

CEOs recognise that they need to make changes – this comes through very clearly in the discussions that I have with them. In practice, however, they are holding back from taking the decisive action that is needed to harness the power of disruption for their organisation.

Our survey found that BCM CEOs cite digital and technological capabilities as the area they would most like to strengthen so that they can exploit new opportunities. Yet, puzzlingly, just 40% of BCM CEOs are considering the impact of artificial intelligence (AI) on their future skills needs, with a mere 6% doing to a great extent. This is despite AI already having a big impact on trading desks through the automated switching of algorithms and it being set to transform the way in which organisations interact with their customers in future.

On a final note, data is undoubtedly one of the greatest assets that BCM organisations typically have at their disposal – and it is the envy of most other sectors. In my experience, however, they are not using this data to their advantage. Most are not investing in predictive modelling, machine learning and other advanced analytical capabilities that could help them to sharpen their customer targeting and create more personalised and relevant services. Since they are only capitalising on a fraction of their data’s potential, they risk being overtaken by competitors that are more adept at exploiting customer intelligence.

BCM faces the same stark choice as virtually every industry sector right now – disrupt or be disrupted. CEOs must make sure that their organisation chooses the former option and there is no better time to start than today.

Kevin is a partner in PwC, the world’s largest professional services firm.  He is PwC's Clients and Markets Leader in the UK and the Global Banking & Capital Markets Leader.

During his career he has primarily focused on advising, leading and delivering projects for Investment Banks across a broad agenda from strategy to process efficiency, Front Office to HR, globally and locally.  His clients have included JP Morgan, UBS, Deutsche Bank, Barclays, HSBC and HM Government.   He has previously worked at IBM, Credit Suisse and The Royal Bank of Scotland and has been based in London, New York and Frankfurt.  He is a member of the Institute of Chartered Accountants in England and Wales.


Tomorrow’s world isn’t too far away: Investors expect a technological transformation

Author: Hilary Eastman, Head of Global Investor Engagement at PwC Hilary

“From every angle, it comes back to data and technology.”

So said one investment professional interviewed as part of our 2017 Global Investor Survey. I have to admit I agree with him. And it’s clearly not just him – this year 75% of investors surveyed said they think technology will either have a significant impact or completely reshape the industry they’re covering over the next 5 years (perhaps not surprisingly, the highest are in technology (90%) and financials (82%)).

So it’s not rare to hold this opinion; over the course of history there have been many revolutions. Agricultural, industrial – the information age is only the latest. And yet, as with those that preceded it, we’re facing a titanic shift in the way companies operate and in the way management make decisions. Automation, software robotics, artificial intelligence – all offer the power to enable or disrupt companies in a big way.

Yet some companies don’t seem to have grasped that this disruption has already begun – and that they need to plan now for how technology will change not only how they do business, but also how they interact with stakeholders.

Communication with stakeholders is fundamental, and in a world of increasing connectivity it’s becoming more vital that companies do it well (or at least not mess it up). So I’ve laid out below two big areas where I think technology will change how companies interact with stakeholders, including their investors, and what steps they need to take for a smooth transition.

Acknowledging the benefits and costs of automation

There are many benefits to automation: lower labour costs, less wastage, more efficiency, greater scale. So it’s not surprising that companies would want to take advantage of implementing a robotic workforce, and many investors believe they will, with 85% of them saying they believe automation will reduce headcount in the companies they follow.

Yet there’s a risk with how automation is perceived, both internally and externally. In a world focusing primarily on maximising shareholder value, a company making thousands of employees redundant may be seen as benefitting shareholders and therefore would be accepted, even applauded. But does it really benefit shareholders? Taken to its logical conclusion, shareholders only gain when the business is operating efficiently and effectively – and sustainably. Over time, the short-term benefits of fewer staff may wear off. Investors are increasingly pushing companies to behave responsibly, with companies equally wanting to be seen to do the right thing. So perhaps instead of a straight replacement, companies should be thinking of finding a balance between human and machine, investing in training programmes for employees now to move them into new roles created as new technologies are implemented.

After all, until we develop AI that can duplicate our very human soft skills like leadership and emotional intelligence, we’ll still very much be in the picture. Communicating the rationale for moving towards more automation in an open and clear way will be needed to remove uncertainties and help stakeholders (employees, investors, customers and others) see the benefits that management see.

Panel 4

Focusing on the need for cyber governance

In our increasingly digital world, it’s no surprise to find that investment professionals see cyber security breaches, data privacy breaches and IT outages and disruptions as having the most negative effect on levels of stakeholder trust – not to mention the risk of social media. Trust is hard to build and keep when everything the company does can be broadcast around the globe within seconds, and it can be lost in a single breach. So it’s crucial for companies to know what data they hold, what systems it’s held on, and how secure they are.

But looking a bit further ahead, in the future as we explore technologies like AI we’re also going to have to think about how we can ensure technology is doing what it’s intended to do, and that those intentions are good. Companies are responsible for ensuring that any technology they create is doing the ‘right thing’, and that there are safeguards in place to prevent misuse. I think governance for technology, especially AI, will become a more important issue going forward, as even a minor change to an AI algorithm could potentially cause chaos. No-one needs a self-learning AI going rogue, especially one with access to vast amounts of personal and financial (read: confidential) data.

As with all other aspects of running a company, a proper governance structure needs to be in place, and building this from the ground up as technology evolves will save companies a headache in the long run.

There is clearly a lot for companies to think about, and that’s just for the two topics above. There are a raft of new technologies being developed that will disrupt traditional ways of working. One thing that won’t be disrupted? The need for clear and timely communication. And, I think success for companies will always come down to this: they need to be sure that if (or more likely, when) something happens, positive or negative, they explain the situation openly and quickly – and adapt.

To see more CEO and investor views from this year’s survey, visit our website.

Hilary Eastman is PwC’s Director of Investor Engagement, with responsibility for managing the firm’s relationships with the investment community in the UK and globally. In her role, Hilary works with investors and analysts to get their views on a variety of corporate reporting and governance matters to help companies improve their reporting to the capital markets. She also seeks their views on matters that affect the accounting profession. 


How to build trust in a digital age

Authors: Olivier Sueur, PwC Advisory, Netherlands and  Helene Katz, Banking and Capital Markets , US

The writing on the wall has never been clearer: There is a real crisis of public trust in business, institutions, government and non-governmental organisations. In PwC’s 2017 Global CEO Survey, 69% of CEOs noted it’s harder for businesses to gain and retain people’s trust in an increasingly digitalised world. Technology today amplifies errors and makes misdeeds more visible, fanning cynicism and eroding public confidence in the ability of organisations to behave reputably to achieve their strategy. In an age of instantaneous public judgement, companies that have actively built consumer – and employee – trust perform better in general and in times of crisis.

It has become routine to see brands elevated or broken by a single 10-second video or 140-character tweet. Rolling out corporate statements after the fact has little impact. The 2017 Edelman Trust Barometer — a study of 30,000+ people across 28 countries — reveals confidence in CEOs is at rock bottom. Only 37% surveyed agreed that CEOs are credible as spokespeople, a 12-percentage point drop from 2016 and an all-time low since the survey began in 2001.


Peer-to-peer influence wields the most trust power today. Consumer-generated messages about company activities have greater velocity, persistence and reach. Now, more than ever, organisations must harness that power to accumulate savings in the bank of public trust and goodwill. Organisations with a credit balance — earned through affirmations of its good works — are better positioned to weather a crisis than organisations with no trust equity.

How do businesses build up their balance? High-trust organisations are rigorous at six levels, and consider risks at each of them:

First, they have a strong corporate purpose and are clear about their values and accepted behaviours — whether in the boardroom or online. Since trust is the expectation of consistent, positive actions and outcomes, there must be a shared understanding, commitment and projections of purpose, core values and strategy. Fostering a clear organisational culture enables consistent decision-making, enhancing trust both internally and externally. 

Second, their leaders promote alignment between the core values, strategy, business model and risk appetite of the organisation. The CEO’s short-term decisions align with a longer-term vision, and actions today are consistent with those of yesterday and tomorrow. In a digital age, it takes only a few clicks to point out inconsistencies between past and present messages.

Third, highly trusted organisations understand who their direct and indirect stakeholders are, as well as their needs. Technology can be a significant tool to cultivate these relationships.

Next, they manage risk by embedding purpose, values and stakeholder orientation in all processes. To do so doesn’t require a whole-scale culture shift. Companies that successfully build a currency of trust identify specific behaviours that demonstrate the organisation’s purpose, values, and ethics, and create specific goals and incentives in key areas to help achieve them.

High-trust organisations also have robust risk monitoring frameworks to assess whether the way they are working actually leads to the desired outcomes. Sophisticated technologies are available to support monitoring to meet compliance obligations. It is worth noting, however, that risk culture must look beyond the goal of regulatory compliance if it is going to achieve lasting transformation and public trust.

Finally, high-trust organisations demonstrate accountability to all stakeholders and show they are committed to wider social values in addition to the bottom line.

There is no question that technological change has increased business complexity. But it can build or erode trust; ultimately, it is up to business leaders to decide how to leverage technologies to have a beneficial impact on their organisation. An organisational culture that adheres to clear values, is underpinned by a strong risk framework, and successfully leverages digital advancements will achieve greater public trust and ultimately better business.

Olivier Sueur_002

Olivier is a director within PwC Advisory in the Netherlands, based at the Amsterdam office. He focuses on aligning compliance, integrity and culture to enhance the performance of organisations and has extensive experience in working with financial institutions, regulators, organisations in transport & logistics and professional services firms. Olivier has held several management positions with both financial regulators in The Netherlands: the Dutch Central Bank (DNB) and the Authority  for the Financial Markets (AFM). He started his career as a lawyer at the Amsterdam bar. 

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Helene Katz.pptx

Helene is a Director in the PwC Banking and Capital Markets team based in New York, specialising in helping organisations develop, implement and execute their enterprise risk management frameworks. Working with her clients, she has focused on developing material risk identification and assessment programs, risk appetite frameworks, scenario analysis and regulatory stress testing programs as well as risk reporting. Helene is currently a member of the PwC project team responsible for updating the 2004 COSO Enterprise Risk Management – Integrated Framework.

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Bringing digitisation to the factory floor and beyond

Author: Reinhard Geissbauer, Head of PwC’s Industry 4.0 Practice, EMEA Reinhard Geissbauer

Last week the world’s largest industrial trade show, the Hannover Messe, took place in Germany. With 6,500 exhibitors from 70 countries, every industrial technology you can imagine was on display, and there was real energy and optimism.

I lead up our European Industry 4.0 practice for PwC, so for me the Hannover Messe – and especially the Executive Lunch and Think Tank events we host there -- is a great time to find out more about what my clients and other companies are thinking and doing, share some research that we’ve done recently and have some intense discussions about the future of manufacturing.

This year, many executives have confirmed that their companies have made some real progress with regard to digitisation. With that comes increased realism.

Making digitisation a priority for the long-haul

For our recent study, Digital Factories 2020: Shaping the future of Manufacturing, we interviewed decision-makers in Europe and found that digitisation is high on their agenda -- nearly all of them are making investments in digitising production. Overall they are quite bullish on the prospects for Industry 4.0 to drive growth and are willing to wait for it. While in past years, many survey respondents were expecting payback times measured in months, that’s no longer true. Most respondents this year expect to see a return on investments over the next 2-5 years. Companies are in it for the long-haul: they want to increase their long-term competitiveness, not look for a quick fix.

Choosing the right technologies

The biggest motivation for further investments in digital factories is efficiency – 98% expect it to improve. Some of the technologies they are relying on to get there include connectivity technologies, using sensors and Manufacturing Execution Systems, and a whole range of data-driven approaches, including predictive maintenance and process improvement, visualisation and optimisation. For these technologies, usage is expected to double over the next 5 years.

Grafik_12                         Source PwC, Digital Factories 2020: shaping the future of manufacturing

Building digital savvy one step at a time

Still, with so many different technologies out there, I often hear from clients (especially middle market companies with fewer resources) that they are reluctant to chase after every new technology trend. That makes sense – implementing individual technologies for their own sake can fall far short of generating the value that you can gain from developing a comprehensive digital strategy, including an understanding of how different technologies can help you achieve your business goals. But sitting back and waiting too long can mean falling behind, which is why I often encourage executives to begin small, with a clearly defined pilot project. One good example is predictive maintenance, where sensors and data analysis can help companies understand in advance when to take machines out of production for maintenance. These types of systems can often bring clear results that help encourage companies to think more broadly about the value they can gain from digitisation of their production process.

Bringing your people on board

When we spoke to executives for our study, and also during my conversations in Hanover, another topic kept coming up again and again: people. We believe any digitisation programme can only succeed if companies engage with their employees throughout the process and support them in managing change. And I have seen many companies that have already taken that message to heart. In our research, we found that companies are already anticipating the need for more training, including lifelong learning for employees. Encouraging was that most also believe the extra costs will be covered by the increases in efficiency.

And while some jobs – particularly those that can be easily automated – will certainly disappear, entirely new types of work will take their place. I believe that the net impact – especially here in Europe’s heartland – looks set to be positive. Our study suggests that survey respondents agree: 90% told us that they believe digitisation offers more opportunities than risks for their company.

Dr. Reinhard Geissbauer is the Head of PwC’s Industry 4.0 Practice in EMEA and a member of our Global Operations Leadership team. As a partner in our Munich office, he specialises in Industry 4.0, Procurement 4.0, Smart Supply Chain and Smart Manufacturing projects for leading industrial companies. Besides Industry 4.0 strategy development, he advises his clients on implementing digitisation pilots ranging from supplier data analytics to logistics digitisation or automating key purchasing processes. Read more


Diversity vs. familiarity. Where is your leadership team on this spectrum?

Author: Jim Woods, Global Risk Assurance Leader Jim Woods

It was August 1995. I figured this would be a great time, professionally and personally, to broaden my career and pursue a new experience outside the UK. Ultimately, Hong Kong prevailed, and I was immersed in a rich diversity of culture - at work and play!  

Similar to my own case, CEOs are actively putting themselves in diverse environments and seeking new experiences throughout their career. According to PwC's 20th CEO survey 53% said that they have spent a year or more working outside their home country. Indeed, 20% were born in a country different to that in which their company is headquartered. In today's world, this international exposure and geographic diversity are more important than ever.

Jim Woods diversity infographic - FOR BLOGIn my discussions with CEOs about the war for talent, there is increasing emphasis on recruiting from as wide a talent pool as possible. Not only is diversity enabling innovation in the here and now, CEOs are seeing it as future-proofing their business at a time when the opportunities and risks of expanding into new markets have never been greater. A diverse team has a much greater ability to connect to, empathise with and understand a heterogeneous mix of stakeholders, resulting in deeper relationships and a stronger brand. It also translates into more informed decision-making processes by reducing the risk of group think.

Diversity is about so much more than age, ethnicity and gender. It also encompasses a wide range of skills, philosophies and life experiences. I’ve seen this first hand, as part of a leadership programme in Peru with other PwC partners for three months in 2008. Our task was to assist a local NGO in securing its sustainability. Ultimately, this project benefitted hugely from the diversity of the team - none of us were alike! It brought home just how different our national cultures really are, under the surface of apparent harmony and sameness.

This appreciation of the subtleties and strengths of multicultural and diverse teams has significantly changed my own perspective and leadership style.

Diversity for the digital age

Business is truly a global affair, but it can feel as though some companies have failed to grasp this when it comes to their own people. More than ever, CEOs need talent in this age of digital disruption. How are they addressing the skills gap? With more than three quarters of CEOs concerned about the availability of key skills:

  • 88% said that they are increasingly promoting diversity and inclusiveness;
  • 74% are seeking the best people - no matter who or where they are; and
  • 77% are moving employees to wherever they’re needed.

A key component to creating a well-rounded and agile workforce is appointing executive teams that reflect the diversity of your employee pool, customer demographic and other stakeholders. This depth of insight, perspective and experience goes a long way in making your company more adaptable to change.

I occasionally hear the (cynical) comment that diversity is all hype. Some board directors I talk to believe that they have always followed a policy of recruiting the best and brightest, and that that approach will naturally result in an optimum outcome. My view is that, in many of these cases, there is a lack of awareness of their own unconscious bias. Maybe that's because it is, after all, unconscious! But, seriously, in my experience of working closely with many of the world's pre-eminent companies, I'm strongly of the view that companies that have a CEO that lives and breathes diversity, makes it a strategic priority and builds it into the company's DNA, have a significant competitive advantage.

What’s your experience?

Jim Woods leads PwC’s Global Risk Assurance practice, a specialist network of more than 12,000 staff who deliver risk solutions to clients across all industry sectors. He is also PwC's Global Assurance Markets Leader and a member of our Global Assurance Leadership Team. Based in Hong Kong, Jim’s career spans 25+ years, where he has worked on assignments in every country across the Asia Pacific region and many other global projects.


From Global Power Shift to Power Dispersion

Authors: Dennis Chesley, Global, Asia Pacific and Americas (APA) Risk Consulting Leader and Alexis Crow, Lead, Geopolitical Investing Practice

In a 2016 strategy + business article, we outlined how a new world economic order had taken hold—one defined by complex and continuously shifting economic relationships. Today, we’re seeing that play out as key countries look to concentrate on domestic growth and consumption. A global leadership vacuum has emerged and power isn’t shifting from one economy to another--it is instead dispersing across emerging economies and sectors. Although it’s possible for these different economic systems to coexist harmoniously, the new multipolar global economic order will add friction to multinational business operations.

Corporate leaders are acutely aware of this reality. In PwC’s 20th CEO Survey, uncertain economic growth topped the list of CEO concerns at 83%, with geopolitical uncertainty ranking fourth at 74%. CEOs overwhelmingly see a world marked by regional, rather than global, priorities. This complex environment is hard to read; a single geopolitical event could trigger a need for a complete or partial overhaul in corporate strategy.1-02

How can businesses—particularly those operating across borders—thrive in this uncertainty? To position their organisations to seize opportunities for long-term growth, CEOs should take these three steps: First, focus on market fundamentals and long-term economic objectives; second, build trust and market connectivity at the local level; finally, have a strategy that adapts to future threats and opportunities.

Stick to the basics:  As Melanie Butler, Partner PwC UK and PwC’s Global Crisis Centre Leader, noted on March 20, economic scenarios are challenging long-held assumptions, confounding multiple stakeholders. CEOs must not be moved by short-term headlines. A long-range mindset positions organisations to be nimble and agile, rather than reactive, which opens windows for growth and investment.

Whereas 20 years ago, CEOs saw emerging markets as the best opportunities for expansion, today they see the greatest growth coming from the US (43%), China (33%), Germany (17%), and the UK (15%). It is important, however, for business leaders to identify the key fundamentals that make a geographical market attractive—what have others missed in pricing an opportunity? Is there a resulting window for investment? PwC Global Economy Watch recommends businesses to look at emerging economies as they seek to grow their international footprint—specifically Vietnam, Poland, Colombia and India.

Plan globally, act locally.  Multinational corporate leaders should also critically examine how to keep their business edge as local competition increases. Identify the messages, mediums and allies that can help win over local populations and their unique preferences. More than ever, companies must communicate how they contribute to the region’s economic empowerment – both of individuals and communities. The majority of CEOs in the PwC survey identified collaboration with government as the best way for business to help spread the benefits of globalisation. Indeed, staying close to the changing roles of governments in this new environment will also better position companies to identify and evaluate new windows of opportunity.

Resilience is key.  The most effective way to thrive in an uncertain world is to have a forward-looking, risk-aware strategy. CEOs must embed their strategy into performance goals and day-to-day operations. And, perhaps most importantly, they must foster a resilient organisational culture that can anticipate and adapt to the threats this politically and economically fragmented world may throw at them.

One thing is clear, in this shifting environment, international growth strategies need to be well-designed to anticipate disruption and adapt to changes. CEOs who operate businesses across borders must think proactively about the risks  associated with power dispersion and their impact on strategy and performance. There is a strong sense that crises are inevitable in cross-border business, but adhering to these steps will help multinational organizations find ways to thrive in the new global economic order.


Dennis Chesley is a Principal in PwC's Advisory practice with more than 25 years of experience serving public and private global entities with a focus on risk consulting. Currently, he is Global Leader of Risk Consulting, Co-Leader of the US Risk Consulting practice, and a member of the U.S. Advisory Leadership Group.

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Dr. Alexis Crow leads the Geopolitical Investing practice at PwC, helping leading companies and asset managers to capitalize on dislocations in order to profit and expand around the globe. Prior to joining PwC, Dr Crow taught at the London School of Economics, and worked at Chatham House (The Royal Institute of International Affairs) in London, and G2, a New York-based investment group. 

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The fourth industrial revolution: it's not all about machines

Author: Bob Moritz , Chairman, PwC International Ltd. Bob Moritz

Truly dramatic transformation is a rare phenomenon. But that’s exactly what we are in the midst of with the current shockwave of technological transformation. The World Economic Forum has termed it nothing less than the fourth industrial revolution.  Advances such as robotics, machine learning, 3D printing, the Internet of Things, and blockchain are changing not just the way industries work but, in many cases, the business models they are based on.

So as CEOs, how do you prepare yourself to navigate, play a role in, and succeed in this time? In a new article on Strategy+Business, we’ve outlined 10 principles that can help you do just that. I want to share a few of those with you in the hopes of spurring how you are reimagining the possible for your company, industry, and stakeholders. In doing so, I want to emphasize that while technology is spurring these big changes, it is human insights and human decisions that will the ultimate determinants of success.

First, let’s look at technological acumen.  No matter what industry you’re in, you live in a programmable world, and software will be key to your competitiveness. This is not just a matter of recruiting people with software skills. It has to do with raising the overall technological acumen of people at your company. They need not just the technical training to use digital tools, but insight into the patterns of technology: for example, how to create an operations footprint that can take advantage of the industrial internet, or how to accumulate the type of data that can foster machine learning. Noname

The importance of insight brings me to my second point: designing for customers.  Because the next industrial revolution is driven by large-scale digital technology, it’s easy to overlook the way it could affect human relationships. The new infrastructure is a web of connections among people: producers and consumers, in particular, are much more closely connected than they used to be.

Through smartphones and social media, consumers can connect directly to producers and services. Through sensors and data analytics, producers can be thoroughly attuned to the needs, habits, and long-term interests of consumers. As a designer of the new platforms, or a business leader participating in them, you have an unprecedented opportunity to build a customer-centric enterprise, one that connects with what people genuinely want and need from your company, thus generating commitment that will last a lifetime.

Third on my list is rethink your business model.  We have all become accustomed to disruption. In industry after industry, we see that those who cling to old business models lose ground. This next industrial revolution will accelerate this sequence, especially in manufacturing, by reducing costs and improving efficiency at a broad scale.

If your company is falling into the trap of thinking that it can be profitable following its traditional business model, it risks losing out to more flexible competitors. You are not in the same industry that you were in before; soon, that industry may not even exist. Your path to profitability is different. Your opportunities for raising capital have changed. Your circumstances are probably different from those of any other company, so you need to look freshly at them, without relying on an industry playbook, and rethink your business model accordingly.

Finally, in a world of robotics and automation, don’t fall into the trap of putting machines before people. If people are shut out — of jobs, creative opportunities, income, and customer satisfaction — then embracing technology will backfire. As the next revolution advances, it is imperative to keep working on the understanding of how people are interacting not just with the technology but also with its consequences, such as the issues of transparency, trust, privacy. Business, in particular, will thrive in this new world only if its leaders understand the place of human values. So, set up your enterprise to foster better connections among people, to encourage humane behavior, and to build the capabilities that overcome technological isolation.

You can read the rest of the 10 principles by checking out the Strategy+Business website.

From 2009, Bob led PwC US as its chairman and senior partner. During his tenure, the US firm focused on increasing quality service and enhancing its brand and reputation by developing and retaining key talent and expanding its capabilities across all areas of the business. Bob speaks widely on, and is a champion for, diversity and inclusion in the workforce as well as being an advocate for workplace flexibility. Read more


Competition in the TMT industry isn’t what it used to be: Key insights from our CEO Survey

Author: Brad Silver, Global TMT Leader
Brad silver

As software and new technology become the lifeblood for all companies, CEOs are keenly aware of the challenge to sustain prominence in their own fields. Nowhere is this more evident than in the Technology, Media and Telecommunications (TMT) sectors.

Fifty-four percent of TMT CEOs (compared to 27% of the global cross-sector average) in PwC’s 20th Annual Global CEO Survey say that technology has completely reshaped competition in their sector in the past 20 years. Nearly half (47%) say technology has completely reshaped competition in just the past five years (compared to 20% across sectors).

This evolution isn’t slowing down anytime soon and we can see the effects throughout the industry. For instance, Mobile World Congress—the mobile industry’s largest annual event—is no longer all about mobile devices, and companies will need to adapt. As Mike Butcher of TechCrunch pointed out, this year’s event had an increased emphasis on connectivity innovations and the services that will run our connected future.


Is there a sequel in the works?

The next five years could be pivotal, particularly across the TMT sectors, according to PwC’s CEO Survey. More than four in 10 TMT CEOs surveyed see technology once again completely reshaping competition in their sectors within the next five years. This is approximately double the cross-industry average of CEOs who shared this belief.  

So how are industry CEOs taking action now, amid such a radical and rapid transformation of the competitive landscape? This year’s CEO Survey pointed to three key areas that TMT CEOs are tackling now to ensure success:

Convergence and Collaboration: To stay ahead of customer demand and the pace of technological change, the TMT sectors continue to converge and collaborate in order to deliver seamless experiences. About half of CEOs from these sectors are prioritizing a new strategic alliance or joint venture in the next 12 months, and 36% (compared with 28% of the average) are planning to collaborate with entrepreneurs and startups.

Building a new workforce: CEOs from these sectors lead the pack with their plans to strengthen their innovation and digital capabilities, and more than half plan to strategically increase headcount in in the next 12 months. With 86% of these CEOs attributing pending headcount reduction to automation and technology, it is more important than ever to focus on talent with the right mix of problem solving, collaboration, leadership, and creativity/innovation skills.   

Creating a culture of innovation: To supplement this, 73% of TMT CEOs are implementing digital training in their learning programs (compared to 63% of the average). This effort reflects the crucial importance of establishing a culture of innovation, a shared digital language, and a tech-based skillset throughout a company that enables fast and successful transformation.

As TMT companies increase collaboration efforts, transform their workforce through technology, and nurture an innovative culture, there will be important risks and challenges to consider. The uncertainty of global economic growth, as well as cyberattacks on business information and systems, data privacy breaches, and IT outages and disruptions are top concerns for CEOs in our industry – and the majority are taking action now to prevent related crises.

While adapting to near-term transformation, CEOs from across the TMT industry must also keep in mind the long-term impact to their business—particularly because the next 20 years look like they could be just as dynamic as the past 20.

For an in-depth look at the data from PwC’s 20th CEO Survey, check out sector-specific insights for Technology, Entertainment and Media, and Communications.

Brad leads PwC’s Global Technology, InfoComm, and Entertainment & Media practice, a role in which he oversees PwC’s Technology, Media & Telecommunications (TMT) clients across the PwC network. In this capacity, PwC provides services to over 90% of Fortune Global 500 TMT companies.




Is your talent brand fit for the future?

Author: Agnès Hussherr, Global Human Capital Leader Agnes Hussherr

These days, news headlines about the workplace of the future are dominated by advancements in technology, automation and robotics.  There’s no doubt that it’s an exciting time of transformation, opportunity and change for all of us in Human Resources.  Interestingly, at the same time, an organisation’s brand has become more accountable to its people than ever before. 

And with 77% of CEOs seeing the availability of key skills as the biggest threat to their business, it’s easy to see why.  The skills they need most are uniquely human ones; problem solving, creativity, innovation, adaptability and leadership.  These skills are crucial to achieving the balance between technology and talent in the workforce of the future – a balance that will soon be a necessity across all industries.  That’s why 60% of CEOs are rethinking their HR function and a substantial 78% say they have already changed their people strategy to meet this need.

CEO Survey_HC cutIn light of these results, and with so much focus on automation and technology, there are some important questions that organisations need to ask themselves: do your people know and trust that they are your priority?  Are you telling the right story to ensure you’re attracting and keeping the talent you need and building a leadership pipeline?

An organisation’s talent brand has to reflect every aspect of its personality; culture and values – and what it stands for; its purpose.  And in doing so, it must also represent your people; your current workforce, the talent you want to attract and your alumni.  The results of our recent research: Winning the fight for female talent showed that from the outset, female talent want to see themselves reflected in a brand.  Women want to work for a brand that values diversity and has visible female role models that they can relate to.  In fact, the report finds that an inclusive employer brand with a transparent and proactive diversity programme, is now critical to attracting female talent.   

This demonstrates the importance of an authentic, ‘lived’ talent brand.  People must not only trust a brand before they will even consider working for them, they want to see themselves reflected in it.  The age old recruitment phrase ‘a good fit’ now carries much more weight and goes both ways, with top talent asking themselves if an organisation reflects their personality and what they stand for. 

Business leaders in this year’s CEO survey placed human capital second only to innovation as a priority, with digital and technology capabilities coming in third.  Indeed, balancing people and technology in the future workforce is going to be one of the biggest challenges facing businesses across all industries.  CEOs realise that to do this successfully, they’ll need skills that technology alone cannot provide.

So every organisation needs to ask itself: does my talent brand tell a story that will attract and retain people with the right skills to succeed – now and in the future?  Because technology is still only part of the story – a story which stars people.

As Global Human Capital Leader, Agnès drives the people strategy for the PwC Network including the workforce of the future, development, performance and talent initiatives. Based in Paris, Agnès also sits on the PwC France leadership team, as Human Capital & Culture Managing Partner.  As an Assurance partner in Banking & Capital Markets, she retains responsibility for several key clients. Read more