AI: The inevitable plunge
CEOs worldwide are stepping up investments in AI, especially Generative AI, to gain a competitive edge. Although they believe that the cost of implementing AI technologies will be significant, many expect to see a return on their investment in 3-5 years. Indian CEOs too, like their global counterparts, believe that these technologies will open unprecedented business opportunities in developing new value propositions, servicing customers, driving efficiencies and reducing cost. However, like most technologies, AI too is a double-edged sword. For example, while AI can help organisations detect cyberattacks at speed, it can also enable cyber criminals to develop new attack strategies.
There are also risks related to ethical issues, unknown boundaries, and regulations, to name a few. Organisations need to work towards building more transparent and responsible systems. As the scrutiny of AI increases, the governments are likely to develop new regulations. While there are no AI-specific regulations in India currently, several other countries have started developing laws to regulate AI. In the recent years, the Indian government has managed to strike a good balance between governance and innovation. Continuing with the same principle will require a non-traditional approach and creative governance mechanism.
Defining and walking the ESG pathMost CEOs believe that ESG will shape the agenda for their companies in the future. However, there are many who view ESG as a burden and an impediment to “business as usual”. I think there is nothing “usual” about business anymore; one must constantly adapt to the global environment and contribute to making the world a better, more livable place. ESG is the means to do that. It nudges us to look at new ways of making the business more resilient and capable of delivering long-term growth even in the face of geopolitical and economic challenges. However, data suggests that not all CEOs have fully incorporated ESG into their corporate strategy yet.
Furthermore, although CEOs are, by and large, well aware of ESG requirements, majority of them admit that the pace and progress of their ESG initiatives falls short of expectations. Moreover, there is a huge talent gap in ESG-related roles. Organisations should try and close this gap at the earliest – either by hiring ESG-certified talent, or by training their workforce.
Building a culture of hybrid working and Inclusion
One of the biggest challenges for organisations today is to find the best balance between working remotely and working in office. Most CEOs in India believe that the workforce will return to the pre-pandemic mode of working within the next three years. Almost 89 percent said they were considering the idea of encouraging office attendance by linking it directly to rewards, raises, or promotions. I would advise caution on this front, though. There is evidence to suggest that several categories of workforce prefer a hybrid mode of working. Trying to force or entice a complete return to office may prove counterproductive.The other big workforce-related challenge is hiring. Finding the right people for the right roles is more difficult than it appears. CEOs largely agreed that they sought to hire the best talent, irrespective of location. They also said they were mindful of the need to foster Inclusion, Diversity, and Equity (IDE). Curiously, although CEOs widely acknowledge that gender equity will help them achieve business growth, they also believe that IDE implementation has moved slower than they would have liked. This calls for urgent attention because the IDE performance of organisations is likely to come under increasing scrutiny in the coming years.
Seldom in the past have CEOs operated in as agile and as challenging a business environment as the one we have today. Despite all these challenges, the Indian CEOs see growth potential for their companies. But then, that is precisely their job – to find a way around obstacles and to make the most of opportunities that emerge. It is their outlook, more than that of any industry observer, that ultimately matters.
(Data Points mentioned in the above article are from KPMG’s 2023 India CEO Outlook)
The writer is, Partner and Head, Clients and Markets, KPMG in India
