CEOs around the world today operate in an environment characterised by multiple simultaneous challenges: the impact of climate change, global conflicts, protectionism, economic and geopolitical uncertainties, human resource shortages and disruptive technologies.
What strategies are CEOs using to successfully navigate their organisations through this complex environment? This is what we investigated in our survey for the CEO Outlook 2023. We surveyed 1,325 CEOs of large companies worldwide, including 125 CEOs in Germany. Below you will find some core results.
We will publish a more detailed presentation of the responses of the CEOs of companies we surveyed in Germany shortly. You can already pre-order this analysis here:
Economic outlook between uncertainty and confidence
Despite the circumstances, the majority of CEOs continue to be confident: 80 percent of the CEOs surveyed in Germany express confidence in the development of the global economy over the next three years. With regard to Germany's development, 75 percent of the CEOs here express confidence. However, this is four percentage points less than in the CEO Outlook 2022.
Confidence in their own company has also declined somewhat. Although 80 percent expect growth for the next three years, the figure is 10 percentage points lower than in the previous year.
At the same time, 80 percent of CEOs in Germany agree with the statement that rising interest rates and a more restrictive monetary policy could prolong a possible recession.
Mattias Schmelzer
CEO, Chairman of the Managing Board
KPMG AG Wirtschaftsprüfungsgesellschaft
Challenges due to current framework conditions
CEOs in Germany surveyed by KPMG identify disruptive technologies, geopolitics and climate change as the three most important risks to their company's growth prospects.
Which of the following risks poses the greatest threat to your organisation's growth over the next three years?
Risks from new disruptive technologies
Geopolitical uncertainties
Environmental risks and climate change
Regulation
Generative AI has top priority for investment
In companies, generative AI (GenAI) is rated as an important competitive advantage for the future. 76 percent of the CEOs surveyed in Germany make this new technology one of the most important investment priorities. 43 percent expect the investment to pay off in the next three to five years, 37 percent expect it sooner. 19 percent expect payback only after more than five years.
The most important benefits of generative AI cited by CEOs are increased profitability (26 percent), followed by higher efficiency and productivity through automated processes (21 percent).
At the same time, CEOs are concerned with a number of challenges in connection with generative AI. These include implementation costs in particular, but also ethical issues, technical capabilities for implementation and insufficient regulation. 59 percent are of the opinion that the extent of regulation of GenAI should be oriented towards climate commitments.
84 percent of CEOs in Germany see GenAI as a double-edged sword: while it could help detect cyber attacks, it could also bring new dangers through new attack strategies for attackers. This is worrying in view of the fact that only 55 percent of CEOs consider their company to be well armed against cyber attacks.
ESG investments will only pay off in a few years' time
ESG issues are becoming more and more standard in companies. 77 per cent of the CEOs of German companies we surveyed have fully integrated ESG into their business to generate value - globally, the figure was only 69 per cent. However, the majority expect it to take another three to five years before they see a return on their ESG investments.
Around one in two German CEOs agree with the statement that failure to adopt climate change and natural disasters and extreme weather events can impact company results in the medium term.
The complexity of decarbonising supply chains and a lack of internal governance mechanisms to implement the strategy are cited as the biggest hurdles to achieving net zero or similar climate targets.
ESG covers three broad areas of sustainability: environmental, social and governance. However, only a minority of companies invest equally in all three fields (18 percent), our survey of CEOs of German companies shows. Priority is given primarily to governance (30 percent) and ecology (29 percent). Only 22 percent prioritise their investments in programmes around social issues such as diversity and inclusion.
CEOs expect return to the office
68 per cent of the CEOs surveyed in Germany expect their employees to return to the office completely within the next three years. Only 25 per cent expect hybrid work. 77 per cent believe that they are likely to reward employees who make an effort to come to the office - for example, with preferential assignments, salary increases or promotions.
56 per cent agree that talent will negatively impact their organisation's wealth over the next three years, compared to 68 per cent globally.
Get your copy of CEO Outlook 2023 now, with analysis of the results from our survey in Germany. Pre-order it here:
