KPMG Report: Inaction Costs Companies Dearly, as Proactive Firms Achieve 4.4 Times Higher Shareholder Returns

NEW YORK, February 18, 2026 – A new report from KPMG reveals a stark "transformation divide" between organizations that act decisively and those that hesitate, with proactive companies achieving dramatically superior financial results. The research finds that in the post-pandemic era, companies that pushed forward with transformation efforts saw 4.4 times higher total shareholder returns (157% vs. 35.7%) and triple the revenue growth (20.9% CAGR vs. 6.6%) compared to their more passive peers.

The report, which surveyed 400 C-suite executives and analyzed the performance of over 1,800 public companies, argues that in an era of constant volatility, the greatest risk is not moving too quickly, but failing to act at all.

The High Cost of Hesitation

"There’s more at stake than missed opportunities. It's about a tangible loss of capability, momentum, and competitive edge,” said Jeanne Johnson, Principal, Advisory, KPMG US. “With the right vantage point based on a broader understanding of collective efforts, organizations can move confidently with speed and intent and make more focused moves with more transformative outcomes. Our research shows that the real risk today isn’t a lack of ideas; it’s often scoping and execution timing gap, where strategy stalls before it becomes reality.”

The data highlights a critical "execution gap" within many organizations. A notable 60% of executives admit their companies have strong ideas but struggle to execute them effectively. This failure to translate vision into action leads to tangible costs, including inconsistent ROI from initiatives that fail to scale, lost momentum that creates organizational fatigue, and missed opportunities as more agile competitors capitalize on market volatility.

The Competitor Misconception

One of the most dangerous assumptions leaders can make is that their competitors are also slowing down in the face of uncertainty. The data proves this is a critical misperception. A clear majority of organizations (65%) are actively advancing their transformation efforts, while only 17% report pausing or scaling back. Despite this, one in three executives wrongly believe their peers are hitting the brakes, creating a strategic blind spot that allows more aggressive firms to pull ahead and capture market share.

The People & Culture Imperative

A successful transformation is ultimately a human endeavor. Companies with satisfied employees outperform their competitors by 20%. However, with 76% of employees involved in three or more transformation workstreams simultaneously, burnout is a significant risk that leaders must manage.

Organizations are shifting their focus from short-term cuts to building long-term capabilities. According to the report, the focus on upskilling and reskilling critical talent is set to rise from a priority for 34% of companies to 40%, signaling a strategic pivot toward investing in people.

“Transformation is about what work matters and how work gets done that aligns to expected outcomes,” Jeanne added. “It means evolving and innovating products and services while making deliberate choices about performance, risk, and tradeoffs. The work to plan and scope change is fundamentally human and one of the most important management capabilities. Our data shows that organizations that prioritize their people are the ones that execute and thrive through disruption.”

Market volatility will continue to become a challenge for companies. From geopolitical shocks, economic changes due to the advancement of AI, leaders are expected to be able to make the right decisions for long-term growth. “Now is the moment for leaders to challenge assumptions, close the execution gap, and build the capabilities that allow organizations to move confidently into the next wave of disruption,” Jeanne closed.

For more details about the report, click here.

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