The KPMG 2020 CEO Outlook COVID-19 Special Edition offers a unique lens on evolving attitudes as the pandemic has unfolded. KPMG initially surveyed 1,300 CEOs in January and February, before many key markets were beginning to feel the full impact of the lockdowns. Then, in July and early August, we conducted a follow-up survey of 315 CEOs to understand how thinking has evolved.
Last 15 September 2020, we shared some key insights from the survey such as the observed increased talent risk, digital acceleration and focus on ESG (Environment, Social and Governance).
In this article, I want to focus on discussing one of the key themes that emerged from the survey – purpose.
A renewed sense of purpose
At the beginning of the year, we found that most CEOs were seeing the primary objective of their organization shift from purely profit to also consider their purpose in society. Less than a quarter (23 percent) saw the organization’s overall objective in narrow ‘managing for shareholder value’ terms, with 54 percent taking a broader, purpose-driven approach focused on multiple stakeholders. Furthermore, one in five (22 percent) say that their primary objective is to improve society.
More recently, purpose has helped CEOs understand what needs to be done to meet the needs of stakeholders during the crisis, from employees to communities.
Purpose has become a central pillar for CEOs: 79 percent say they feel a stronger emotional connection to their corporate purpose since the crisis began. At the same time, however, the massive disruptive impact of the pandemic has caused many CEOs to question whether their current purpose really meets the needs of stakeholders. In fact, 79 percent say they have had to re-evaluate their purpose as a result of COVID-19. As Chairman and CEO of KPMG in the Philippines where purpose has always been an important aspect of our business, I encourage an open and ongoing dialogue with different stakeholders to ensure that our purpose remains relevant.
From empathy to action
This increasingly personal and emotional connection to purpose during the pandemic reflects the fact that CEOs face similar health and family challenges as their people and communities. In fact, well over a third of chief executives (39 percent) have had their health, or the health of one of their family, affected by COVID-19.
The pandemic will be remembered by many as a defining moment for this generation. CEOs are clearly determined to learn from the pandemic and their own personal experience to recalibrate and make not only the best-informed decisions, but also the most authentic ones. Out of those who were personally affected by the health implications of the crisis, only 4 percent made no change to their approach to the pandemic. In all, 55 percent changed their strategic response, either completely or to some degree. Another 40 percent, while not changing their strategy, did pay more attention to the human aspect of the pandemic.
Trust will be a very big component in the new reality. This means CEOs must build trust with their clients, colleagues, and teams by empathizing, collaborating, and engaging with them during this time of crisis.
Accelerated social awareness
At the beginning of the year, we found that CEOs were increasingly prepared to personally lead the way in tackling society’s major challenges. Around two-thirds (65 percent) said that the public is looking to businesses to fill the void on societal challenges. At the same time, 76 percent said they had a personal responsibility to be a ‘leader for change on societal issues’. During the pandemic, there are numerous examples of companies playing a significant role in their country’s response, from developing products and services for front-line workers to financial contributions.
Reflections for the new reality
While the pandemic has given companies the opportunity to demonstrate how they can make a real difference to society, scrutiny of corporate actions has also never been stronger.
With leaders now being accountable to the community, purpose-driven policy recommendations and donation drives have become more powerful and relevant than ever. To thrive in the new reality, leaders must widely establish that their organizations and its stakeholders make a difference –not only to succeed, but more importantly to lead with increased purpose and impact to our society.
For some, this will mean moving from generic purpose statements to more specific and measurable approaches. Carefully listening to different stakeholders, and encouraging dialogue, will be an important element of making adjustments and managing any trade-offs that need to be met between different stakeholders. The pandemic has shown the power of purpose. However, it must be integrated into the fabric of the organization in order to succeed and the CEO must lead from the front to ensure it actually delivers.
Sharon G. Dayoan is the Chairman and CEO of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International.
This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International or KPMG RGM&Co. For comments or inquiries, please email ph-kpmgmla@kpmg.com.