Home Analyses Regional CEOs ‘Very Confident’ in Business Prospects, But Challenges Lie Ahead

Regional CEOs ‘Very Confident’ in Business Prospects, But Challenges Lie Ahead

By Kamran Gasimov


Regional business leaders remain optimistic about business growth despite economic and geopolitical uncertainty. This was one of the main findings of PricewaterhouseCoopers (PwC)’s 20th Annual Global CEO Survey. Olga Grygier-Siddons, the Chief Executive Officer of PwC Central and Eastern Europe (CEE), and Movlan Pashayev, the Country Managing Partner of PwC Azerbaijan, discussed the survey results and what they revealed about the global and regional business climate at a press event in March.

According to the 2016 survey, 38% of business leaders in the Central Europe and East Asia are “very confident” in their business’s growth potential in the next 12 months. This is on par with the global percentage of business leaders who are very confident in their 12-month revenue prospects, and reflects a 3% increase from the previous year. PwC Central and Eastern Europe CEO Grygier-Siddons remarked how impressive this statistic was, given the ongoing economic and geopolitical instability in the world.

To give some historical perspective on global confidence levels, Ms. Grygier-Siddons pointed out that at the peak of the financial crisis in 2009, only 21 percent of CEOs reported feeling “very confident” about their businesses growth potential. This measure of confidence has since recovered, and has remained relatively stable (between 35-39%) over the past 5 years. “It’s actually surprising that in this really turbulent time, that confidence is staying at that level,” remarked Grygier-Siddons. In 2016, emerging markets experienced shocks due to the large drop in oil and commodities prices. Developed markets also experienced shocks related to the unpredicted Brexit decision and the outcome of United States’ presidential elections, and are now facing increasing uncertainty in Europe surrounding the 2017 elections in France and Germany. Yet, according to PwC, CEO confidence levels remain relatively strong.

Ms. Grygier-Siddons posited that this could be due to businesses becoming more used to the uncertain economic environment and learning how to seize opportunities from the changes taking place.  She added, “I think it also shows that one-off shocks, strangely enough, have a bigger impact than continued adversity, because in continued adversity people focus on the things they can control. Whereas, if something external unexpected happens, they go, ‘Wow, are there going to be more of those?’ Now we know there are going to be more of those; and therefore, we have kind of learned to move beyond that.”

Of course, as people in Azerbaijan and the region know, many businesses did not fare so well during the past year. One reporter pointed out that Azerbaijani people pride themselves on being excellent sales-people, and so it was a shock to them when their businesses failed during the economic crisis in Azerbaijan. “When you have shocks in the system there are always winners and losers,” said Ms. Grygier-Siddons. “Some companies, just like individuals, are just better and make the most of the situation. Other companies struggle more.”

For companies in Azerbaijan that were wounded, but not put out of business, the next few years will be especially important. Grygier-Siddons pointed out that it is important to look at these shocks within the context of several years of data. “It is how they move forward, not in the perspective of 12 months, but 3 years or 5 years, that is a true measure of how resilient they are,” said Grygier-Siddons about companies recovering from a shock.

Country Managing Partner of PwC Azerbaijan, Movlan Pashayev, agreed that looking at the longer term recovery was important. He also stressed the importance of strategic planning. He stated that strategic planning was a key deficit in the business community of Azerbaijan. “For example, if we look at the Soviet times, we were given, from the top, the strategic plan for 5 years,” explained Pashayev. “But now it is very seldom we have local companies that will look forward and do their planning strategically for the years ahead.”

In addition to CEO confidence, Grygier-Siddons pointed out some other significant trends in global business revealed by the Global CEO Survey. The survey reaffirmed the importance of technology to business leaders, but exposed some changes in the way CEOs think about technology. While companies are still looking to automate many of their standard practices with technology, they are now even more interested in using technology to attract new customers or reinforce customer relationships. Worldwide, CEOs are becoming increasingly worried about cyber-threats and the cyber-security of customer data. Interestingly, CEE region CEOs did not follow this last trend. They were not as concerned about cyber-threats and did not believe they were at risk. However, Grygier-Siddons pointed out that PwC strongly believes everyone is at risk for cyber-attack and that all businesses should think about their cyber-security.

The rapidly changing technological climate presents key opportunities, but also key challenges for businesses. According to the PwC CEO Survey, business leaders are excited about the efficiencies brought by new technologies but also see shortages in the skills they need in the era of tech. As Grygier-Siddons put it, for business leaders, “It’s not black and white. They need both talent and technology.” Business leaders don’t just need people who know how to use new technologies, they need people with “skills that cannot be coded” and the ability to “translate data into ‘real value’ for your business,” according to Grygier-Siddons. But, CEOs see a large deficit of leadership, problem-solving, and emotional capital skills in the candidate pool.

One solution to this problem is to focus on recruiting from the full 100 percent of the potential workforce and find ways to attract and retain female employees. “There is a deficiency of leadership skills, of problem solving skills, of skills that bring people together, good communication. These are all skills that women are really good at. Can we really afford to leave 50 percent of that talent out of the market?” asked Grygier-Siddons. “And that’s really the plea that we have to the business leaders, to the policy makers: just make sure that you use all of the talent that we have.”

In both the CEE region and across the world, there is still a large disparity between men and women in high level leadership positions in business. Grygier-Siddons thinks one important key to closing the gap is by helping women to get through middle-management. “Women are challenged by lots of things: family, work, etc. In work, middle management is the worst possible place because you have pressures from the bottom and pressures from the top,” she said. “The higher up you go, paradoxically, the easier it gets. So we need to help women to push through that middle management to get to the top.”

Another challenge facing businesses is how to address the ways technology and globalization are changing the job market and global and local economies. Ms. Grygier-Siddons was firm about the necessity for businesses to work together with academics and governments to tackle these issues and create an environment for economic success. But, she admitted this can be challenging, especially in today’s divisive world.

She gave the example of disparities in the perception of new technologies between the private and public sector. “Businesses see new technology as an opportunity,” Grygier-Siddons explained. “Governments, on the other hand, often see changes brought by technology as a threat to future jobs for their citizens.” These two sectors need to find common ground to both protect the work force and benefit from new technologies.

Education is also an important challenge in this new era of globalization and technology. Schools are not producing graduates who have the right skills for the ever-changing modern work environment. As one reporter pointed out, when students graduate from their four year undergraduate degrees, the technologies they learned in their first year will no longer be relevant. Grygier-Siddons again pointed to the need to focus not only on “facts” in education, because with technology “human memory will be increasingly less important”, but on skills like thinking, interpreting data, creativity, and innovation. This will require a shift in the education system. In order to create schools that adequately prepare youth for employment in a modern business environment, academia, scientists, policy makers and businesses must collaborate.

Grygier-Siddons also warned against putting too much focus on the negative aspects of globalization and losing sight of the bigger picture. She explained that many people blame global companies for the challenges caused by globalization and come to the extreme conclusion that the solution is to go entirely local. “To jump from one extreme to the other, I strongly believe wouldn’t be good for us,” said Grygier-Siddons. She conceded that globalization hasn’t narrowed the gap between the rich and the poor, but emphasized that it has succeeded in lifting 1 billion people out of poverty in developing countries.  Instead, she called for global leaders in business, government and diplomacy to “work together to solve those challenges.”

“There are some strong pressures that I see around the globe to divide us, to look at things in a very extreme way and to see things either in a black or white way,” she said. “And actually all the challenges, all the problems that we have to solve require us to work much better together.” She warned that businesses, governments and diplomats should “not corner themselves and try to come up with independent solutions.” These complicated challenges require the best minds from different sectors of society – from business leaders to policy makers. They also require collaboration between governments. Her final words were a call to action to businesses and to policy makers, “Please work together and collaborate, because it is really important for all of us to solve these challenging problems.”


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