Yezdi Nagporewalla, CEO, KPMG in India
CEOs today are operating in an uncertain, challenging environment, with overlapping risks and crises.
As a CEO, I am constantly looking for new ways to drive growth and momentum for my organisation, and I am sure, many of you are too.
Unsurprisingly, an anticipated recession is a dominant theme in KPMG’s 2022 India CEO Outlook, although a much lower proportion of CEOs in India (66 per cent) compared to 86 per cent of their global counterparts believe there will be a recession. But most of these senior executives, globally and in India, are anticipating it to be a mild and short recession, disrupting growth in the short to mid-term. The long-term outlook continues to stay positive.
The KPMG 2022 India CEO Outlook also indicates that economic factors (like interest rates, inflation, and the anticipated global recession) and reputational risk (including misalignment with customer/public sentiment) are pressing concerns for CEOs in India. Newer and agile ways of working (post pandemic) continue to be the biggest concern for senior executives in India.
Businesses continue to remain cautiously optimistic, staying focused on long term sustainable growth brought on by the promise of three core themes – technology, talent and ESG.
Similar themes dominated the dialogues at the World Economic Forum at Davos last month, with innovation and technology as a constant in determining solutions to the world’s most pressing challenges. India took center stage on the back of a resilient economy, the Digital India vision and its role in the transition to a cleaner, safer and more inclusive world.
Transformational growth opportunities
Looking at the next three years, CEOs in India should look at advancing digitisation and connectivity across the business, as one of their top operational priorities to achieve growth objectives. Also, an aggressive digital investment strategy, intended to secure first-mover or fast-follower status will be crucial to drive digital transformation at a rapid pace in their competition for talent and customers. Insights-led digital transformation will create new opportunities in the marketplace.
Employee expectations on the hybrid work are evolving, and so, it’s important for CEOs in India to develop optimal working structures aligned to the needs of their people and organisational goals. Even if the labour market shifts in favour of businesses (giving managers more scope to insist on being in office), purposeful interactions and meaningful people initiatives will continue to remain integral to the success of a business. How do CEOs define what an optimal structure looks like? Now is the time to experiment and see what works best. Active listening, empathetic conversations, transparent communication and a commitment to finding the right balance over the long term will be key to engaging, retaining and hiring new talent.
ESG as a watermark
ESG will soon be a watermark running through an organisation’s DNA. Whether it is the environment footprint, well-being and people initiatives, caring for communities, or the extended vendor and supply chain network, success is increasingly being defined and measured, beyond just numbers and profits.
With growing stakeholder activism, and purpose being rediscovered, ESG will dominate agendas and investments of Boards and management, and rightly so. Clear metrics and reliable information will demand robust ESG frameworks, resulting in transparency to enable informed decision making on leading issues.
A theme which clearly stands out, in the survey and from the points above, is the sheer complexity which the Indian C-Suite are having to manage; CEOs in India are slowly starting to understand that the current issues they face are ‘increasingly inter-connected and difficult to disentangle’. The inter-connected world is getting more complicated to navigate, as also discussed extensively at Davos this year.
It is for this reason, that businesses should re-visit their business model, and often, and evaluate how it can remain functional and thriving in a way that’s most effective in meeting customer needs. Being integrated across many disciplines in today’s digital first world is imperative – it means that our success, and the success of our customers, cannot be achieved in a split, siloed, or separated operating environment.
Finally, we are operating in an uncertain economic environment, which means business strategies must remain agile and leaders must prepare in advance for an anticipated recession. At the same time, they should also consider investing in transformational opportunities that will position their businesses for future growth. Strong headwinds, both from an economic perspective and numerous other risks could pose challenges, but leaders, especially in India, remain optimistic in the resilience of their businesses and long-term growth prospects of the India story, that is still unfolding.
(Note Data mentioned in the article is basis KPMG’s 2022 India CEO Outlook - Growth prospects in uncertain times)
A version of this article appeared in The Times of India Online on February 24 2023- Focus on long-term, sustainable growth in complex and uncertain times