The COVID-19 pandemic has disrupted almost every aspect of our lives today and for CEOs it has redefined leadership. These individuals at the helm of large organizations have had to lead through adversity and manage a level of uncertainty that few will have ever experienced.
In an effort to bring some clarity to the complex world we find ourselves in, KPMG interviewed hundreds of CEOs from many of the world’s largest companies, first in January (as part of our annual global CEO Outlook) and then again in July and August, to get their perspectives and to understand how their priorities have changed since COVID-19. This is the first year that CEOs based in Qatar have been surveyed as part of the global report and shared their viewpoints. We asked about their confidence in the future and examined how they are responding to the pandemic.
Renewed sense of purpose
At the beginning of the year, we found that CEOs in Qatar were less likely than their global counterparts to see the primary objective of their organization as purpose-led/societal.
Only 12% agreed that their primary objective was to improve society, while 40% saw the organization’s overall objective in narrow ‘managing for shareholder value’ terms.
Post-COVID-19, Qatar CEOs showed a marked shift in their perspective – with 80% saying they have had to re-evaluate their purpose as a result of COVID-19 to better address the needs of stakeholders.
As Chart shows, purpose has helped CEOs all understand what needs to be done to meet the needs of stakeholders during the crisis, from employees to communities.
While we saw a decline in international air travel of almost 95 percent,Qatar Airways quickly adapted to this new reality and rose to the occasion with resilience as we continued to take people home safely and reliably in the midst of constantly changing entry restrictions around the world
His Excellency Mr. Akbar Al Baker
Group Chief Executive, Qatar Airways
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 Qatar chief executives 40% have had their health, or the health of a family member, 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.
All the CEOs who were personally affected by the health implications of the crisis made some change to their approach to the pandemic. A majority 75% changed their strategic response to some degree and the other 25%, while not changing their strategy, did pay more attention to the human aspect of the pandemic.
Championing diversity & inclusion (D&I)
At the beginning of the year, we found that Qatar CEOs were increasingly prepared to personally lead the way in tackling society’s major challenges 74% said they had a personal responsibility to be a ‘leader for change on societal issues’. They were also more likely than their global counterparts to see building a diverse and inclusive leadership as an important part of protecting their reputation. Given that Qatar is a highly diverse country that draws on talent from across the world, it is no surprise that CEOs here are realizing the benefit of diverse and inclusive leadership across all levels of their organizations. Being able to draw on a diverse spectrum of talent is critical to addressing the unique challenges of the pandemic.
This year also saw people across the world galvanized in support of anti-racism, which compelled companies to take a more proactive stand in addressing inequality in society. When surveyed in July, 8 out of 10 Qatar CEOs said that their companies were planning to publicly declare new antiracism measures.
Earlier in the year, 80% of Qatar CEOs agreed that the scrutiny of organization’s diversity performance will continue to increase over the next three years and 92% agreed that progress on D&I has moved too slowly in the business world. At the same time, Qatar CEOs said that they felt significant pressure fromemployees and consumers to take action to address issues such as gender inequality, income inequality and sexual harassment and discrimination. Further, 92% agreed that CEOs needed to build greater understanding and awareness of diversity based on disability.
Growing in adversity
The survey finds that the COVID-19 crisis has shaken CEO confidence in global economic growth. Only 20% of Qatar CEOs said they were confident about the growth prospects for the global economy over the next three years. Qatar CEOs were less optimistic than their global counterparts, a third of whom said they were less confident in the outlook for the global economy.
Earlier in the year, Qatar CEOs expressed equal levels of confidence in the outlook for their country, industry and companies (84%), but were less confident about the global economy (64%) and were roughly in line with their global counterparts. Following the COVID-19 crisis, Qatar CEOs said they are most confident about the growth prospect of their country (60%) than they are about the prospects for their companies (50%) or industries (40%). Qatar CEOs are generally more optimistic about the outlook for Qatar, than their global counterparts are about their respective countries.
Accelerating digital growth
While digital transformation has long been a focus area for CEOs, the pandemic led to a shift in the pace and urgency of change in organizations worldwide. With commerce increasingly taking place online because of factors such as physical distancing, companies are having to rethink what customers want and how to deliver. We found that 80% of Qatar CEOs say the pandemic has accelerated the creation of a seamless digital customer experience as well as new digital business models and revenue streams, with 50% of those saying progress “has sharply accelerated, putting us years in advance of where we expected to be”.
The key learning from this experience is to diversify channels and sources, to be able to secure the continuity of supplies of basic goods such as food and medical supplies during times of crisis. As a country, Qatar handled the impact on the supply chains pretty well, being a high-importing country, we were already dealing with the whole world and had diversified supply sources.
Abdul Salam Abu-Issa
Chief Executive Officer, Salam International Investment Limited
As they plan their path to long-term growth, business leaders recognize that there have been new challenges to contend with during the lockdown. In January, Qatar CEOs ranked supply chain risk behind eight other risks to growth.However, since the start of the pandemic, supply chain risk has risen to be named as the most significant threat to their businesses ahead of a return to territorialism and regulatory risk. For their global counterparts, talent risk rose to become the most prevalent risk to growth and supply chain risk accelerated up the agenda to occupy the second place as a major strategic threat.
The worldwide lockdowns as a result of COVID-19, disrupted supply chain continuity for many companies, which brought this risk into sharper focus.Building resilient, flexible supply chains – ones that can withstand shocks and offer the agility to pivot to new opportunities – will be critical for organizations to drive growth and build a competitive advantage post-COVID. This will be particularly important in a world where CEOs are aware that increasing territorialism could make the transfer of goods both more difficult and more costly. We look further into this issue later on in this report, in the ‘Customer-centric supply chain’ section.
Future of work
COVID-19 has effectively forced many organizations to experiment radically with how work is done. For many organizations, virtual working kicked in literally overnight.
With the pandemic transforming the world of work, 90% of Qatar CEOs say they will continue to build on their current use of digital collaboration and communication tools, and 70% believe that remote working has actually widened their available talent pool
Leaning in to ESG
The pandemic has created what will be a career-defining economic challenge for most CEOs. Given the scale of that challenge, many were worried that chief executives would be forced to relegate the importance of environment, social and governance (ESG) themes. However, our research shows that CEOs are still very much engaged with this issue, and in particular the ‘S’ of ESG. Close to two-thirds (63 percent) said that their response to the pandemic has caused their focus to shift to the social component of their ESG program.
That is not to say that CEOs are being deflected from the ‘E’ of ESG either. Chief executives are more than aware that climate change also offers a significant economic and humanitarian threat over the coming decades and that there is a need to rebuild organizations in a way that supports a new and sustainable economy.
70% of Qatar CEOs say they want to lock in climate change gains that have been realized during the pandemic
Customer-centric supply chain
In terms of the future operating model, supply chains have also been hard hit: 80% of Qatar CEOs say they have had to rethink their global supply chain. However, CEOs are using this opportunity to ask how their supply chain can become a competitive advantage in the new reality that emerges. When we asked CEOs to say what was driving this supply chain reevaluation, the top-ranked reason was to ‘become more agile in response to changing customer needs’.
Many companies, particularly those with complex supply chains, were likely focused on continuity issues and managing ongoing uncertainty and disruptions.However, as they look to the future, a number of areas are expected to become critical: stripping complexity and cost out of supply chains, building end-to-end visibility, investing in automation and other advanced technologies, and building agility into the network of suppliers and partners.
In a time of great uncertainty, when the future is unclear, CEOs are having to make important decisions with longterm consequences.
They are having to do their utmost to protect their people while facing massive economic pressure that could potentially threaten the future of their business. And they are having to reconsider their entire supply chain approach, at a time when movement of goods and people are restricted.
As they answer those questions, and look to build a successful post-COVID future, it is very clear from the research – as well as discussions with leading chief executives – that they are using purpose to guide their decisions. In the midst of both an economic and humanitarian crisis, they are putting people first: their employees, their customers and society as a whole. The COVID-19 crisis is redefining what good corporate leadership looks like.