CEOs are worried about disruption – but not about innovation

By on July 22, 2015
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By Rachel Savage 

Innovation is low on CEOs’ priority lists, despite their apparent worries about upstarts.

Peer into the minds of top global CEOs and their nightmares are filled with ‘Ubers for X’, as new technology upends their business models. That’s if you believe KPMG’s Global CEO Outlook, anyway. The survey found disruption was number one on the list of boss’ concerns, yet innovation was some way down their priority list.

Almost three quarters of the 1 276 CEOs surveyed, from 10 of the world’s biggest economies, said new market entrants disrupting their business model was among their top concerns. That was 5% more than cited the traditional worry of competitors in general stealing away market share. In a world of Airbnb et al disturbing entrenched leviathans through clever use of technology, bosses are clearly worried about who’s coming for their bacon.

But merely being asked to tick a box next to a list of concerns doesn’t necessarily mean CEOs are focusing all their energies on second-guessing the next Big Thing to emerge out of Silicon Valley. Indeed, top of a list of areas they’re devoting capital to in the next three years was the traditional growth area of global expansion. Only new product development can feasibly be seen a strategy to anticipate disruption.

Of course, by its very nature disruption is nigh on impossible to predict. And CEOs aren’t necessarily a bunch of ostriches: their top strategic priority was developing new growth strategies.

But fostering innovation (although a fuzzy concept) and increasing speed to market were both lower down leaders’ priority lists, despite both surely being necessary to respond to disruptive new competitors. No wonder that only 30% of the original FTSE 100 were still in the index when it celebrated its 30th birthday last year.

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