What do Asia-Pacific CEOs view as the biggest opportunities?
While the onset of the Covid-19 pandemic presented numerous challenges for businesses worldwide, it also created an opportunity for leaders to push their organizations toward capturing new growth opportunities and strengthening their competitive position, writes Ignatius Tong, Asia-Pacific Head of strategy consulting firm EY-Parthenon.
Some business leaders are taking initiatives to reframe their strategy and drive towards long-term value through pandemic shock, recovery and beyond. To do so, CEOs should initiate a purpose-led strategic reset in order to better capture the upcoming economic rebound, thus laying a strong foundation for the next phase of their transformation.
In our latest ‘Global Capital Confidence Barometer’, we studied 1,000 CEOs globally to help identify the key attributes of an effective leader in this new context. The research found that 87% were categorized as “pragmatists,” leaders who recognize the need to reorient to the post-pandemic landscape, but are fully aware of the fluidity of the current situation.
Flexibility and adaptability seem to be the new keywords to watch in their strategic planning process, whereby an iterative process overtakes a “pick-a-path” mindset. In addition, the “pragmatists” place higher value on new information and different viewpoints.
In this period of uncertainty, it will be for management strategists and consultants to step in and help clients to think through their existing business models carefully, and act or implement decisively, thereby bringing “real world strategy” to life.
Beyond the short-term financial metrics
Today, societies demand greater responsibility from the organizations they work for, buy from and invest in. According to Edelman’s 2021 Trust Barometer, business is now the most trusted institution globally and 86% of the public believe CEOs must lead and speak up on societal issues. Having a broader narrative to articulate long-term value creation to stakeholders is key for informing robust stakeholder engagement strategies.
In fact, 92% of the Asia-Pacific CEOs who EY surveyed see this as important, if not critical, slightly more so than the 82% of global CEOs that share the same belief.
Major investors have highlighted the shift to investment focus on environmental, social and corporate governance (ESG) as many seek to align the values of companies with their own agendas. Customer expectations around business transparency and sustainability has also increased. In response to this changing environment, companies are looking to place greater emphasis on values beyond the short-term financial metrics for longer-term sustainable value.
A vision for the future
As an example, CEOs in the Asia-Pacific seem to be more aware of the pending climate urgency. Many business leaders in the region are the most ambitious about achieving net-carbon neutrality, with 79% saying that they intend to go carbon neutral before 2030, compared to 45% globally. While circumstances and challenges vary across sectors and companies, most CEOs are under heightened scrutiny and pressure to communicate detailed and measurable plans for ESG-related issues.
To align with these long-term values, CEOs of today will need to adopt additional leadership attributes beyond those in the traditional business domain in order to deliver and implement a purpose-led growth strategy for the future.
The views reflected in this article are the views of Ignatius Tong and do not necessarily reflect the views of the global EY organization or its member firms.