Charting a course through complexity
While CEOs maintain confidence in the future of the global economy, their views on what constitutes a risk to their business have shifted significantly. The persistent flux in global politics, trade dynamics and international relations has required a new level of resilience from CEOs. They are reassessing their strategic priorities, focusing on the rise of generative AI, talent management and high stakeholder expectations in addressing environmental, social and governance (ESG) issues.
East Africa CEOs remain optimistic, but confidence in the long-term growth prospects for their companies is slightly subdued due to disruptions, structural shifts in the economy and regulatory risks.
Majority of the global and East Africa CEOs expect their local economies to grow. With confidence, East Africa CEOs expect to exploit the economic growth, with 92 percent of them expecting their companies to grow by at least five percent over the next three years. However only two percent expect to grow by more than five percent.
CEOs face shorter-term barriers to delivering growth over the next 12 months. While they rank regulatory risks as the top threat to their organizations’ growth over the next three years, they remain wary of political uncertainties, rising interest rates, climate change, operational risks and technology risks, underscoring the impact of increased disruption and the challenges of navigating long-term structural change.
An overwhelming majority (nine out of ten) of CEOs in East Africa agree that disruptive technology (e.g., generative AI, machine learning, blockchain, robotics) will negatively impact their organization's prosperity over the next three years.
Despite the headwinds of global economic uncertainty, digital transformation leaders that are committed to their innovation priorities continue to realize value at pace. By aligning investment in technology with their strategic ambitions, these organizations are upholding momentum.
CEOs agree that advancing digitization and connectivity of all the functional areas in the organization will be the top operational priority to achieve growth objectives over the next three years. Businesses want to manage initiatives intentionally to get the highest returns possible. This means looking at how to bring people and technology together more closely. In East Africa, CEOs are placing their capital investments both in technology (36 percent) and in developing their workforce skills and capabilities (64 percent).
Being intentional means being clear on the value you intend to generate from the technology you deploy. And this value needs to be quantifiable in some way, be it monetary or some other measure of efficiency. When you are not intentional about the returns you intend to achieve, technology projects can drift aimlessly, becoming protracted and continuing for far too long.
It is important to remember that AI provides a way to drive value from many other investments in technology, particularly in the data arena. When asked about the top benefits of implementing the use of generative AI, CEOs cited increased profitability, personalized services / customer engagement, fraud detection and cyber attack responses. Other benefits include increased innovation and faster data analysis.
Majority of CEOs surveyed, both globally and in East Africa remain consistent with their last year’s position of full return to the office for roles traditionally office-based over the next three years.
After working remotely for the past couple of years, employees can easily make compelling arguments to continue working from home. If your organization wants people back on-site, leaders must engage in meaningful conversations about the transition and explain the advantages to be gained particularly as pertains to how the change provides the opportunity for a better experience and engagement. Managing this change requires empathy and flexibility, as well as timely and clear communication. Through that communication, employees should be made aware of how to address concerns they may have together with the resources and wellness programs that are available to support the transition.
Exploring opportunities for growth
Disruptive technology and generative AI
Embrace generative AI in a way that is ethical, makes the most sense for your business and keeps the needs of your employees and clients at the forefront.
Stay up to date with cyber-attack strategies so you and your employees do not expose the business to risk.
Talent
Take a long-term view when it comes to employees’ desire for hybrid or remote working to ensure that talent is nurtured and supported.
Set the tone at the top. Senior leadership should make IDE a stated priority, set real targets, fund initiatives and appoint management to lead programs with clear accountability.
ESG
Position ESG as a driver for value creation when it comes to business growth, rather than as a risk to be managed. New avenues open when ESG is considered in the growth conversation.
Stay attuned to shifting ESG regulations to help maintain your business’s brand reputation and client relationships.
Focus ESG investments on areas in line with your values and those of the business.
Methodology and acknowledgment
About the KPMG 2023 CEO Outlook
The ninth edition of the KPMG CEO Outlook—which surveyed 1,325 CEOs between Aug. 15 and Sept. 15, 2023—provides unique insight into the mindsets, strategies and planning tactics of CEOs globally.
50 CEOs from Kenya, Uganda, Tanzania, Uganda, Rwanda and Ethiopia participated in the survey.