East African CEOs caught napping under disruption wave: report
East African CEOs are making littler investments in innovation in comparison to their global counterparts, a new report says.
The report authored by the KPMG advisory picks apart the executives’ agility sentiments to expose a number of contradictions in the CEOs’ own outlook.
Executives in the region are for instance well aware of the impending disruption to traditional business models with 46 percent of the 51 surveyed agreeing with the need for deftness in future operations.
Further, chief executives are in touch with the scope for self-disruption under the cloud of change as 76 percent of the surveyed chiefs easily back the trend.
In spite of the notable consciousness to the winds of change, the CEOs’ remain in a deep slumber in comparison to their global peers making the tiniest of investments to adapt to the changing times.
For instance, only 4 percent of the executives have began upskilling their existing workforce to fit the future place of work while only 8 percent of the chiefs have began implementing artificial intelligence (AI) infrastructure in their organizations.
Moreover, 68 percent of East African CEOs have reported overlooking insights from their own data analysis to instead adopt decisions based on their gut feelings.
The precedence on short-term growth to encompass the pursuit of short-lived earnings and proof shocking is largely attributed to the blurred focus on innovation.
“With the shortening of the horizon for the tenure of the CEO, you find that the shareholders will measure the CEO based on the impact they make and therefore heightens the demand for a quick response.
However, the tragedy is that the ignoring of technology and staff up-skilling blurs the organizational vision,” noted KPMG Head of Advisory Gerald Kasimu.
While there is a side stepping feel to the CEOs’ sentiments, the executives still rank operational risks such as fraud and cyber security as their top concerns for the year.
The mitigation of risks does however remain an uphill task defined by the ever evolving threat and the accompanying costs.
“The biggest risk to operations was once robbery and collusion. Today, we are seeing 12,000 to 14,000 hits every month on our firewalls with most of these threats emanating from Eastern Europe.
“The question is, do you have the skills and competences of the global wizards trying to take away from you?” posed Equity Group Managing Director James Mwangi.
In spite of regional executives effectively lagging behind in innovation, the CEOs’ remain the most optimistic for global growth to include the creation of new jobs in the near-term.
SPAT BETWEEN US, CHINA
Kenyan CEOs for instance lag behind only Rwanda in their optimism for economic progress in 2019 scoring at an average 83 percent confidence rate.
The optimism sentiments are further mirrored by a February survey by the Central Bank of Kenya (CBK) which likewise reads into better prospects for both job seekers and entrepreneurs.
The perceived sentiments are despite a downturn in global growth under the cloud of the ongoing trade spat between the US and China which has sent global financial markets tumbling.
In Kenya, continuity to growth has been dented in the first quarter by the delayed onset of long rains, a factor likely to impact on output given the economy’s heavy reliance on precipitation.
Governor to the Central Bank Patrick Njoroge has already identified the setback as a potential disruption to growth predicting a preliminary 0.4 percent cut to annual output.
Kenya’s Growth Domestic Product (GDP) expanded by 6.3 percent in 2019 from a low 4.9 percent in 2017 mainly on an account of improved agriculture productivity.
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