- Innovation poses a threat to organizations’ growth if they can’t keep pace.
- That’s what 400 US CEOs said in a new survey by KPMG.
- One way CEOs are trying to keep their organizations relevant is by giving employees freedom to experiment without fear of failure.
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Agility is survival.
That’s according to a new US CEO survey conducted by Forbes Insights on behalf of the professional-service firm KPMG.
Of the 400 respondents, 68% agreed that if their organization moved too slowly, it’d eventually be bankrupt. In 2018, just 14% of US CEOs said the same.
All of these execs helm companies with at least $500 million in annual revenue.
"Agility" is more than a corporate buzzword.
The KPMG report defines it as "a capability that starts with reading and interpreting the signals of change, decision making about investing in a portfolio of new initiatives to create change, and democratizing innovation."
The report highlights Walmart as an exemplar of an agile organization. As Business Insider’s Áine Cain reported, the company has been buying up online retailers like Bonobos and Modcloth in an effort to appeal to millennials.
The KPMG survey found that 23% of US CEOs said emerging and disruptive technology pose the greatest risk to their organization’s growth. Other top risks include those stemming from climate change (17%) and cybersecurity (16%), both issues thought to require agile responses.
The report also highlights a "disruption dilemma": While most leaders agree that their growth depends on their ability to challenge business norms, fewer leaders than last year said they’re taking a proactive approach to disruption.
Some CEOs simply may not want to replace long-standing company processes. As many as 39% of CEOs surveyed said the best way to remain resilient in an uncertain business climate was to protect their core business.
The line between technology and human capital is increasingly blurred
Interestingly, the growing spotlight on digital technology may have obscured the importance of human capital. The report indicates that 68% of US CEOs said they’d invest in buying new technology over developing their workforce.
But the people/technology divide may not be so black-and-white.
The report quotes Jonas Prising, the CEO of ManpowerGroup, who argues that today’s leaders should focus on retraining their employees to succeed in an age of digitization and automation. In fact, a 2019 Manpower analysis predicts that automation will lead to more, not fewer, jobs across the globe. Prising said companies can "upskill" their workforce so they can "perform new and complementary roles to those done by machines."
In an email to Business Insider, Claudia Saran, the chief culture officer at KPMG, described the reskilling of employees as "updating" people the same way you’d update technology.
Ultimately, it’s more about adaptation than replacement.
In the KPMG report, Saran cites "a high comfort level with disruptive technologies" as a key driver of an innovative culture. Many leaders seem to agree: Ninety-two percent of US CEOs said they wanted their employees to feel empowered to innovate without worrying about backlash if their initiatives fail.
To that end, Saran wrote to Business Insider that leaders should measure and celebrate "attempts," as opposed to merely "wins."
"Instead of overreacting or making the person or team feel reprimanded (especially publicly), which will stop innovation in its tracks, leaders should overtly focus on the learnings from that failure, and how those learnings can specifically be applied to try again or try a different approach," she added.
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