KPMG: Companies Blame Disruption, but Internal Gridlock may be the Bigger Threat

New York, July 30, 2026 – KPMG’s second Adaptability Pulse survey, released today, which finds that the biggest threat to organizations’ ability to respond to disruption isn’t market conditions, but internal realities. Leaders today recognize the need to future proof operations for an era of constant change; however, they may be getting in their own way—ignoring strategies that may make them more adaptable over time.

The report found the top barriers impacting organization’s ability to protect and grow value in the next year are short-term financial pressure (39%), slow decision-making (37%), and a lack of critical talent (33%). Market uncertainty ranked near the bottom. The report also found organizations are largely focused on extending or strengthening their current business model, not restructuring their business for long-term success.

These findings echo the real-life discussions of 250 corporate leaders gathered in Deer Valley for KPMG’s ninth annual Tech and Innovation Symposium. The event convened the brightest minds shaping the future of technology from AI, quantum computing, and robotics, to advanced manufacturing, energy, computing and digital assets. Discussion kept turning to one major theme: how companies can adapt to a rapidly changing environment.

On stage, Atif Zaim, Deputy Chair and U.S. Managing Principal, KPMG LLP, issued a call to action: “Leadership is defined by what we choose to do when conditions change. Adaptability is less constrained by ambition and more about how you master the internal challenges: a proliferation of competing priorities and slow decision-making.”

Speakers on stage at the Symposium pointed to edge operations, a strategy of innovating at the organizational edge before integrating successes into the enterprise, as one of the most impactful ways to spur transformation within a company, and others noted the criticality of shifting supply chain strategies for success in today’s changing environment. Yet, the Adaptability Pulse showed that only one in three organizations said they have no plans to establish edge operations, reposition within the value chain or reshape their portfolio.  Similarly, only 22% of leaders said they were committed to regionalizing operations and supply chains in the next 2-3 years.

“You can never do disruptive innovation in the core. One way we’ve seen organizations be successful at disruptive innovation is to take them to the edge of the organization,” said Salim Ismail, Co-Founder & Chairman, OpenExO, Inc. from the stage. “From the edge, you can start moving workflows over one by one, rewriting the overall organization little by little without threatening the mothership. It’s a simple mechanism that allows you to see the performance before you scale.”

Building adaptability in the face of disruption is a shared priority across the C-suite, but senior leaders are divided on how to achieve it. When asked how their organization is planning to stay competitive over the next 2-3 years, CEOs most commonly (42%) are committed to deepening customer relationships while CFOs (47%) and COOs (46%) are focused on accelerating innovation. CTO, CIO and CAIOs (52%) were more likely to commit to improving delivery and operating model efficiency versus 38% for both CEOs and CFOs and 41% of COOs. The report also found CTO, CIO and CAIOs are more likely to reach for experimental tools first to disrupt their organization from within, including separate KPIs or incentives for new growth activity (40%) and edge teams and ventures (32%).

Ultimately, many leaders recognize the AI era is as much about technology as it is about people, and experts on the stage reinforced culture and trust as critically important to building a creative workforce that is willing to take risks and try new things. Perhaps that explains one bright spot in the Adaptability Pulse data: companies are choosing to develop rather than cut their workforce. One in five leaders are not reducing their workforce at all, and 34% are reducing only in limited areas.