CEO Monthly July 2017

16 CEO MONTHLY / JULY 2017 , Global executives expect economic and financial volatility will be higher in the next 12months than it was in the past year, according to the ‘2017 Views’ from the C-Suite published by A.T. Kearney’s Global Business Policy Council this month. Political Risk and Technology Are Front of Mind for C-Suite Executives focus on the role of technology on both the “opportunities” and “challenges” sides. Executives emphasize the importance of technology in their biggest operational focus over the next 12 months. The principal operating risk they identify is cybersecurity, with 43% of executives pointing to this as their biggest concern; and 85% of global executives believe cyberattacks will become more frequent and costly over the next 12 months. And while 33% of those surveyed view technology adoption as a top challenge, 38% see it as a top opportunity. In addition, 78% of executives believe technological advancements will lead to increased global productivity growth in the coming year. “The degree to which technology and political risk dominate this year’s results is striking. Technology continues to represent both opportunity and challenge,” says Erik Peterson, managing director of the Global Business Policy Council and co-author of the study. “At the same time, global executives are paying much more attention to government actions and identifying risks stemming More than 90% of the C-suite executives and board members surveyed are making or are considering making changes in their supply chains and international footprints due to the current political and economic environment. However, volatility brings both opportunities and challenges from a business perspective. See the full study at www.atkearney.com/VCS. On the ‘challenges’ side, several issues are of special concern to business leaders. Rising political risk is at the top of their list. A close second is worsening tax and regulatory policies—the second year in row that global executives have identified this as a top challenge. Relatedly, roughly three-quarters of executives believe that populist and protectionist policies will gain strength in democracies around the world over the next year. Executives believe that trade is the most likely feature of globalisation under threat from rising populism and protectionism. For the second consecutive year, the C-suite survey maintained a from geopolitical tensions and domestic regulatory and tax policy changes.” Fully 69% of global C-suite executives reported that government policies have a greater influence on their companies’ overall decision making. And almost all executives say they are placing greater importance on employing strategic foresight techniques to manage risk. Business leaders are thus “adapting to disruption” in the current global environment. “These results suggest that the all-too-visible hand of political risk is increasingly driving economic outcomes and business decisions,” says co-author Paul Laudicina, Chairman of A.T. Kearney’s Global Business Policy Council and Partner and Chairman Emeritus, A.T. Kearney. “I would advise business leaders worried about the future to take action to manage risk. The high level of uncertainty in the global operating environment means that increased agility and a heightened awareness of both risks and opportunities are keys to success.” The Global Business Policy Council offers concrete recommendations for businesses wondering how best to thrive in the current global operating environment • Improve cybersecurity defences and protocols. While many aspects of technology adoption and disruption provide business opportunities and challenges, executives’ most crucial priority over the next year should be improving cybersecurity. Recent cyber-attacks have demonstrated shifting and growing (both in scope and scale) threats. And as the C-suite is only too aware, such attacks are likely to increase in the next 12 months. Delaying investments to bolster cyber defences could therefore prove to be very costly. Just as important—if not more so—is the imperative for executives to invest in cybersecurity training for all employees, and then to model good cyber behaviour across the business, including in the C-suite.