- Business transformation is top priority as 68% of leaders expect to transform their business with technology and 62% expect sustainability-related transformations
- 75% plan to increase investment in sustainability initiatives, yet funding and complexity remain barriers to ESG investment
- Leaders plan to increase investment in attracting and retaining talent due to fierce competition
Mazars, the international audit, tax and advisory firm, today releases its C-Suite barometer, which took the pulse of over 1,000 executives around the world to understand their concerns, gain first-hand insights into their markets and understand the opportunities and challenges they see ahead.
Conducted at the end of 2021, the Mazars C-Suite barometer shows leaders overwhelmingly expect to transform their business, with technology and sustainability-related transformations at the forefront.
Over two thirds (68%) expect their business to go through a technology transformation in the next three to five years, followed by 62% expecting transformation in their sustainability strategy. Both have increased sharply from last year’s figures (18% higher in both cases), making them clear areas of focus for businesses moving forward.
Commenting on the C-suite barometer, Mark Kennedy, Partner & Group Executive Board Member, said: “As businesses look forward, there will inevitably be challenges. Our respondents have a sense of confidence and resilience: with the ongoing impact of the pandemic and the far-reaching consequences of the horrifying invasion of Ukraine, these are qualities that are likely to be tested once again this year.”
Technology and sustainability are at the heart of business transformation
The report reveals technology is at the core of business growth and it is likely to remain a priority focus for businesses for many years. Nearly all leaders (94%) believe trends in technology and innovation will have the biggest impact on their business in the coming years, with 82% planning to increase investment in maintaining and evolving IT systems. But alongside that, the risk of cyber-crime is growing, with half (54%) believing cyber risks have increased within the past year, and over a third (35%) expecting a significant breach within the next year. Yet, the majority (68%) remain confident their data is completely protected.
Kennedy continued: “Tech has been a priority focus for businesses for many years, and it’s likely to remain so for the foreseeable future. That is in part because we are seeing a shift and acceleration in digital strategies. It also reflects that most clients and consumers expect to be able to interact with all organisations in a digital way, and organisations need to keep focusing on technological enhancement if they don’t want to get left behind. Crucial to this will be investing in and retaining the best tech talent, bringing technologists into the boardroom, and developing a digital strategy that sets out how you address the issues around cyber-related risks.”
The C-suite barometer also revealed that environmental, social and governance (ESG) factors are now a clear priority for leaders and are playing an increasingly central role in C-suite decision making. Nearly half (46%) of large companies ($1bn+ revenue) and 43% overall see ESG as essential to their long-term growth. Over half C-suite executives (58%) say Covid-19 has sharpened their focus on ESG and in large companies ($1bn+ revenue), 70% say this has increased. Three quarters (75%) plan to increase investment in sustainability initiatives over the next 12 months, and more than half have already made public commitments on a range of ESG issues.
However, the big challenge remains as to how to turn the intentions and commitments reflected in the barometer into achievable strategies. For example, fewer than half (47%) have made a public commitment to achieving Net-Zero. Kennedy continues: “It’s not a surprise to see such a big increase in the proportion of businesses planning to transform their sustainability strategy, but it also reflects the explosion of awareness, concern and expectation across society as a whole. ESG is not just a marketing initiative, or even a regulatory compliance issue – it has become a core strategic issue that needs to be considered in every aspect of the business and turned into a plan that is followed through on a daily basis.”
Reputation and customer expectations top the list of reasons to invest in ESG, according to business leaders in Europe, CEE and Asia Pacific. Nearly half (46%) of large companies and 43% overall see ESG as essential to their long-term growth. However, funding and complexity are still considered the most significant barriers to ESG investment. This is particularly true for smaller companies ($1m - $100m) as 58% are held back by funding and 54% by complexity vs 45% and 46% respectively for large businesses ($1bn+).
Leading business through transformation
The study reveals the most important leadership skills and qualities the C-suites believe they need for the coming three to five years are: strategic vision and planning, analytical thinking and problem solving, innovation and creativity and the ability to work with emerging technology. Nearly all leaders (88%) believe their leadership team has the skills their organisation needs for the next three to five years, while nearly two thirds (63%) of executives say Covid-19 has changed the future leadership styles their organisation needs.
Kennedy continued: “It’s interesting to note that many leaders still appear to value traditional leadership qualities over more progressive ones such as a sense of purpose, emotional intelligence, strong ethics and drive to lead responsibly and inclusively, as well as humility and open-mindedness. With technology identified as the biggest external trend and the main driver of transformations in business, it makes sense to see the skill of working with emerging technologies is reflected in the leadership skills businesses feel they need in the years ahead.
“When it comes to people, sourcing new talent is one of the top three biggest areas of increase in investment by leaders. “Attracting and retaining top talent can be challenging and businesses need to understand what employee’s value today. As business prepare for the changes ahead, they mustn’t overlook the importance of engaging people in a meaningful way. Businesses that can demonstrate their values through their actions, and in doing so, attract, retain and develop the best people, will be at a considerable advantage.” Kennedy concluded.