Mumbai: CEOs in India are undertaking compensation cuts and have realized the importance of purpose-driven leadership after their earnings outlook was challenged by the current crisis.
More than a third have had to re-evaluate their purpose as a result of Covid-19, according to KPMG’s latest ‘CEO Outlook’. It interviewed 100 CEOs from leading business houses in India to gauge how their strategic priorities have changed over the last six months.
It’s no longer about just delivering results, but also ensuring the values are adhered to. The survey said 62% CEOs altered their own compensation as part of the broader objective of cost-optimization to sail through the pandemic. According to the findings of the report, shared exclusively with TOI, only 42% of CEOs have faith in their company’s growth. At the beginning of the year, 84% CEOs were optimistic in their growth prospects. About 19% CEOs in India expect the earnings of their companies to either remain flat or decline.
What’s also changed is the risk landscape. Over the years, CEOs in India have consistently cited climate change, digital disruption, operational risk, volatile geopolitical scenarios and cybersecurity as the primary threats impeding organizational growth. While digital disruption continues to be a major threat for companies, supply chain risk, which was not a predominant concern prior to the pandemic, has emerged as a critical threat. On the other hand, reputational risk, which was growing in terms of priority before the pandemic, now figures at the bottom of the graph.
KPMG in India chairman & CEO Arun Kumar said, “CEOs in India believe that the pandemic challenges them with a formidable test of their leadership abilities and personal resilience. Confidence in their companies’ future earnings is impacted. They are concerned about their people’s health and of the effects on society in general. TheIR responses include holistic road maps that factor in the evolving dynamics of increased digitization, diversified and flexible supply chains and remote working paradigms. Alongside, there is an increasing focus on the environmental, social & governance (ESG) dimensions of their businesses. Seeing that digital technologies are imperative to maintain customer trust and keep remote workforces connected, they are priortising investments in new technologies.”
Dabur India CEO Mohit Malhotra said the company has transformed itself as an organization by becoming more “aggressive and fearless”. “We have also enhanced our risk-taking ability, encouraging our employees to become more entrepreneurial. To support this attitude, trusting people and accepting failures is also important, which is what we are doing,” said Malhotra.
In addition to bringing agility in supply chains (64% CEOs are reassessing their global supply chain approach, with 44% focusing on developing customer-centric supply chains), a majority of them are enhancing ESG programmes. These trends, said Kumar, could actually reshape a better and more sustainable future for several companies as they work through the recovery phase.
The view that the pandemic has accelerated digital transformation was endorsed significantly (95%) by CEOs from FMCG, retail and BFSI sectors. Similarly, 80% CEOs in India stated that they have fast-tracked the progress in creating next-generation digitized operating models during the pandemic.
With remote working becoming the norm, 77% CEOs believe they have access to wider talent pools and 48% said they will consider downsizing their office spaces. Such thinking is dominant among FMCG and retail sector CEOs.