Arun Kumar, Chairman and CEO, KPMG
Arun Kumar, Chairman and CEO, KPMG India, shares his views on the CEO landscape in the country and the challenges confronting these head honchos
Running a business in India is a major challenge for company CEOs, who have to confront various issues that can be quite daunting. Besides intense competition, both from the domestic and international markets, there are government regulations, matters related to the public and a host of other issues that need to be tackled.
How do CEOs manage all these challenges and ensure that their companies are at the top, generating revenues, churning out profits and keeping shareholders happy?
Arun Kumar, Chairman and CEO, KPMG India, has been monitoring the CEO landscape in the country and is aware of the challenges confronting these head honchos.
His firm recently brought out the third KPMG CEO Outlook report for India, based on the inputs of over 130 Indian CEOs. It provides insights of their expectations for business growth, the challenges they face and their strategies to chart organisational success over the next three years.
"Indian CEOs today are increasingly compelled to think in fresh ways about the disruptive forces challenging their business," Kumar told this correspondent. "In the face of new challenges, they feel the urgency to 'disrupt and grow'."
The top executives are still optimistic about the prospects of their companies, as well as the national and global economy they operate within, he avers. "Our CEOs appear buoyed by ongoing reforms in India and their enabling impact on the business environment," adds Kumar.
"Reforms such as the Real Estate Regulation and Development Act, 2016 (RERA), Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code, 2016 (IBC) are seen as positive auguries. The economy is heading in a positive direction; our survey showed 88 per cent of CEOs being confident of the growth prospects in India in the next three years."
The KPMG India chief says that in the 2016 report CEOs believed it was "Now or Never" to transform their business. "This year we see the CEO emerge as a positive disruptor, recognising the challenge to better lead their business to success in a rapidly changing world."
Despite uncertainties, CEOs remain cautiously optimistic and are focusing on their core strengths while seeing innovation and disruption as key priorities for the future, he points out.
Interestingly, what came across as a huge positive is that 80 per cent of the CEOs view disruption as an opportunity than a threat.
"Growth in 2016 appeared to be inward focused with CEOs opting to consolidate business, streamline internal processes, and restructure organisations," explains Kumar. "This year, CEOs are looking at inorganic growth to help businesses penetrate further in the existing markets and new verticals. They say they are taking the necessary steps for their business to be a disruptor, rather than be disrupted."
So, what are the factors that make these CEOs upbeat about the growth of the Indian economy, which is expected to expand at a rate of 7.2 per cent in 2017 and 7.7 per cent in 2018, according to the latest World Bank estimates?
"In recent months, the government has undertaken a slew of reforms which we believe will be hugely beneficial for the country in the long term," says Kumar. "The roll out of the GST as well as moves to address the bad debt problem and strong action against tax dodgers will set the stage for Asia's third-largest economy to expand towards its full potential."
Higher productivity, efficiency gains in business operations, greater investment, reduction of interstate tax barriers and enhanced tax compliance are just some of the benefits that India will reap in the coming years, he adds.
All of this, along with a focus on ease of doing business and a good investment environment are making India an attractive destination for FDI.
"This we believe was the reason for as many as 90 per cent of the CEOs surveyed being confident about the growth prospects of their companies," explains Kumar. "A second reason that Indian CEOs are upbeat is due to their capabilities for expansion, for instance through M&As, high revenue growth activity and innovation capabilities to exploit new opportunities."
One of the key points of the survey is that 88 per cent of CEOs believe in better growth prospects for India compared with the global economy in the medium-term. "It is obviously a positive observation on India," he points out. "Having said this, companies today must be ready to evaluate and re-think growth plans so as to become resilient to potential risks."
CEOs are willing to look beyond short term economic volatility, to develop strategies that have patience and flexibility, he explains further. Some also have a clear focus in identifying and building on core capabilities while remaining flexible to ride out political and economic road bumps.
"Those who have displayed the resilience to traverse uncertain times have more likely succeeded than others," adds Kumar. "We believe Indian companies by and large possess the capabilities to overcome such uncertain periods."