24th Annual Global CEO Survey
What does 2021 hold for private Irish businesses, and what do its leaders see at the end of the tunnel?
While the majority of global CEOs are positive about the prospects for the world economy, Irish private business leaders are more measured when it comes to their expectations for the national economy.
They are clear that the economy will recover, but their caution reflects a level of uncertainty about the resilience of the Irish economy and the timing of recovery. The long-term fallout from the combined impacts and disruptions of COVID-19 and Brexit remains unclear.
As Ireland continues to reopen and deal with the economic impact of COVID-19, Irish private businesses face a defining moment. The fallout from the pandemic and the impact of Brexit will influence the landscape for Irish indigenous business for many years ahead.
The pandemic has been an extraordinary test of resilience for every organisation. Private businesses are rising to meet the challenge.
Business leaders moved rapidly to protect the health of their employees, customers and businesses. Their next set of decisions as we emerge from the wave of rolling lockdowns will speak to their resilience, purpose and values. If they plan now and do this right, it will help define their businesses for a generation.
At a time when the local and global economy can only improve, it's unsurprising to see that three quarters of CEOs are positive about the prospects for the global economy. They are also hopeful of growth within their own organisations. However, their confidence is somewhat tempered in the wake of the shocks that 2020 brought. Only a little over 10% say that economic growth will improve significantly over the next 12 months.
❛❛Over 70% of private business leaders feel that the economy will recover in 2021❜❜
Irish private businesses leaders, like their global counterparts are cautiously optimistic about the world economy, with 74% expecting economic growth over the next 12 months.
Private business CEOs have not lost their belief in their own organisation's potential performance. Organisations have to be resilient and realistic if they are to succeed and grow in the future. This is particularly true in times of disruption and uncertainty.
With most businesses severely disrupted in the last 12 months, one way or another, private business leaders have had to react quickly. They have taken unprecedented steps to protect their employees' and customers' health. Technology has been key to facilitating business as usual and continuing to serve customers. At the same time, businesses are trying to build their resilience for the challenges that still lie ahead.
Businesses that have remained nimble and have adapted in an agile way to the challenges have been best placed to weather the pandemic. They have pivoted to remote working or finding new ways of serving their customers through online sales.
As business leaders have managed immediate issues in the past year, organic growth as the means of controlling your destiny is the clear focus for the year ahead. It's not surprising that Irish private business leaders are focused on growth from within. Internal operational efficiencies, the launch of new products and services, and organic expansion are all seen as key sources of growth for the next 12 months.
❛❛85% of private business leaders are confident about their organisation's prospects for revenue growth over the next 12 months❜❜
Irish private business leaders are confident about their organisation's growth with the majority seeking operational efficiencies to drive the growth.
2020 was a test for everyone, as COVID-19 disrupted lives and livelihoods. The health and safety of people remained top of mind for private businesses. They reconfigured their operations to combat shrinking economies and an uncertain future.
However, the impact the pandemic has had on jobs has been most severely felt amongst private Irish businesses. Those in the retail, hospitality and construction sectors are the worst hit. As businesses continue to adapt and respond, restoring demand and supporting jobs are key areas of focus for private business leaders. More incentives and a continuation of capital and liquidity-related support will help maintain employment and recover lost revenues. In particular, supports that will help with employment restoration, investment, cash flow and measures to stimulate demand are needed to combat the threats that businesses still have to face.
❛❛Private business CEOs believe pandemics and health crises is the greatest threat to their organisational growth❜❜
The continued threat from COVID-19 remains the number one concern but cyberthreats are high on the agenda for private business CEOs.
The focus for many Irish private business leaders has been surviving the last 12 months. However, now is the time to reboot their recovery with a focus on digital.
The pandemic demolished any lingering doubts about the benefits of digital transformation. Some businesses seamlessly transitioned online, while others struggled. Recognising this, 83% of Irish private business leaders are planning on increasing their investment in digital over the next 12 months.
Accelerating your digital journey requires an understanding of the value of data and analytic tools, and a commitment to upskilling your workforce. Transformation must be part of a cultural shift supported by highly engaged leaders. Delivering transformation is dependent on the people in the company. Digital transformation requires operating model change and transcends different teams and functions.
It's imperative that any digital transformation has an employee change programme that embeds new ways of working. The programme should also drive performance in the organisation. Having these key elements in place should realise the benefits of digital transformation.
❛❛83% of CEOs plan to increase their focus on digital transformation in the next three years❜❜
Just 2% of private business leaders in Ireland plan to decrease their focus on digital transformation in the coming years. COVID-19 has accelerated the need to transform organisations using technology. Those who do not invest will fall behind.
CEOs have a critical role to play in solving challenges like the impact of climate change and environmental damage. Progressive leaders are considering how to make climate action central to their business strategy now.
Asking any one industry to save the world is unrealistic. But private business leaders are, in many ways, uniquely positioned to use their strengths, market position and capabilities to generate positive returns locally and globally.
Private businesses have always been able to create value by driving rapid transformation. They can act faster and be more nimble than larger organisations. That means they can turn their attention to decarbonisation and sustainability and make change a reality.
Global CEOs are slightly ahead of their Irish private business counterparts in explicitly factoring climate change and environmental damage into their strategic risk management activities.
Private business CEOs within Ireland need to be aware that investors are demanding greater climate change accountability. Many consumers are demanding more transparent environmental practices. Embracing sustainable business is becoming a must to remain competitive.
Ensuring that climate and the environment are areas of top priority isn't just a responsible reaction, it is now a business imperative.
❛❛40% of global CEOs and 34% of Irish CEOs have explicitly factored climate change and environmental damage into their strategic risk management activities❜❜
COVID-19 has thrust the global economy onto a new trajectory. It is important to learn from the pandemic. Embrace new ways of working and make the changes necessary to emerge stronger and better prepared for the future. Those who are open to rethinking their business have the best chance of setting themselves up for success.
COVID-19 has put a spotlight on how critical the role of technology is within organisations. More investment in digital is needed. With the move to remote working and the surge in online, companies who do not invest will be at a competitive disadvantage.
It's important to ensure that your people have the right skills and a willingness to embrace change. The speed of technological advances has created significant demands for upskilling your workforce. Increased investment in your employees' future skills, alongside a flexible hybrid working model, will help your business attract the best talent and position itself for a successful future.
Climate change is a major threat to our environment, society and economy. Action on climate change is now front and centre for all businesses. They must find ways to make themselves net zero in the immediate future. Working with all stakeholders in the business will speed up this transition.
Private business leaders are moving away from the crisis response seen in 2020 towards embracing opportunities. It's time to change work practices, upgrade digital technology and provide a new value proposition for your people. We are ready to help you as you face the future. Contact us today.