Changing times call for changing mindsets
The trends shaping the organizations of tomorrow are increasingly global and unpredictable in nature. CEO sentiment can be an interesting litmus test to gauge these key trends and challenges.
This year, PwC launched its 23rd Annual CEO Survey in the World Economic Forum in Davos, which surveyed more than 1,500 CEOs across 83 territories. The survey has been conducted since 2008 to understand the issues driving the decisions of corporate leaders, on a global level.
With the frequent shifts and turns in trade, geo-politics, and technology, it should come as no surprise that uncertainty has loomed over CEO sentiment. When asked about global economic outlook in 2020, a record 53% of CEOs anticipated a decline in global economic growth.
This marks a steep from 29% of CEOs from a year earlier. The usual culprits are to blame: Trade war between the two economic juggernauts -- US and China -- has left much of the world’s economy at a standstill. Brexit has brought about an existential crisis for the European Union. Tensions in the Middle East have recently been brought to a boiling point, having implications on prices of commodities and the global economy at large.
Being an export-oriented economy, Bangladesh is vulnerable to the ripples of global uncertainty. If, for example, British consumers and retailers are pessimistic in the wake of Brexit uncertainty, it can ultimately translate to fewer orders for our RMG producers. It is often possible to leverage from uncertainty -- many speculate Bangladesh stands to benefit from the US-China trade war.
However, to be well-placed in the global economy, Bangladeshi CEOs need to be increasingly outward-looking and agile in their decision-making.
They say people are fearful of change and no change has been more colossal than the digital transformation in the recent decades. The Fourth Industrial Revolution has forced us to explore crucial issues like privacy in an increasingly data-driven world, the daunting prospect of automation replacing human labour, and the role of government in all of this.
Regulatory movements in the cyberspace have been the subject of much speculation among CEOs, particularly those in North America. Most CEOs anticipate increased legislation on internet content, the dissolution of “big tech” and the private sector being mandated to compensate individuals for their personal data.
However, CEOs are pessimistic about government’s role. In the survey, they have largely disagreed that governments are designing privacy regulations which both increase consumer trust and maintain business competitiveness.
While data is an extremely valuable asset for organizations, it is easy to forget that it can be an equally troublesome liability, if not protected. As such, cyber-security is shaping up to be one of the primary threats for businesses. Even tech giants like Facebook and Twitter have not been exempt from data breaches. Bangladeshi CEOs should be alert to cyber-threats.
After all, Bangladesh Bank has been the victim of one of the most prolific cyber-attacks. Our financial sector has been particularly at risk with major banks having been susceptible to cyber-attacks. For increased preparedness, data CEOs should be committed to invest in cyber-security systems and the appropriate human capital to implement these systems.
The very nature of work has been undergoing transformation as a result of the Fourth Industrial Revolution and this will lead CEOs to revisit how they approach human capital. Automation technology will replace jobs that involve repetitive work. Instead “new collar” jobs will create demand for digital and technical skills which the pre-existing labour supply might not be able to satisfy, thus creating skills gaps.
The majority of the CEOs surveyed believed that upskilling their employees was the most significant way to cover the skills gaps in their respective organizations. While upskilling can have various definitions, for the purpose of the survey, it has been defined as “an organization’s clear intent to develop its employees’ capabilities and employability, and to advance and progress their technical, soft, and digital skills.”
To ensure the success of upskilling initiatives, CEOs must clearly identify what the workforce gaps of today and tomorrow are and create the necessary operational infrastructure (eg performance management system) for implementation.
Organizational redesign should also have a distinctive place in the CEO’s agenda. In the increasingly global and fast-paced world of today, organizations must be efficient and adaptable to remain competitive. The days where organizations follow strict hierarchical structures may be long behind us. Forward-looking companies are embracing cultural shifts and devising “millennial-minded” organizations.
If we look at the leading companies, it is team-centric models that are taking precedence, where top-down bureaucratic structures are less important. In such organizations, leaders are no longer those who list out directions and hold absolute control, but rather those who collaborate and provide strategic guidance to their employees.
But it should be noted that organizational redesign is not something CEOs should haste into either. Don’t rock the boat too much seems to be still the “mantra.” Leaders should take time to create a clear baseline and assess the current state of their organizations before moving into action.
We should also keep in mind that organizations are ultimately comprised of human beings. Organizational redesign would thus involve some degree of cultural and attitude shift, especially in emerging territories like Bangladesh.
Mamun Rashid is a partner at PwC. Views expressed here are his own.