The majority of CEOs in the UK are frustrated by short-termism and the pressure from their boards to deliver results on multi-year digital transformation projects, according to a new study of some of the country’s largest businesses by KPMG.
As a result, tensions are starting to appear between CEOs, boards and management teams with three quarters (72 per cent) citing unreasonable expectations for return on investment related to digital transformation.
Instead leaders want their boards to take a long-term view of tech investments, with the study finding that two thirds (64 per cent) advising the company would only begin to see a return on investment (ROI) in artificial intelligence (AI) in three- to five years after the initial outlay.
Similarly, more than half of the 150 CEOs interviewed for the KPMG study (52 per cent) agreed on the same ROI time scale for process automation technologies like robotics.
Meanwhile, half of CEOs expressed doubt in the skills of their wider management team, confessing they were not confident their immediate team had the right experience to oversee the radical change the organisation needed.
This finding chimes with recent research from Rialto Consultancy which showed two fifths of business leaders (41 per cent) don’t believe that the culture within their organisation is supportive of transformational leadership.
Worse still, the Supercharge your leadership skills for the future report found just 16 per cent of leaders ranked a “digital transformation mindset” as one of the three most important skills required by leaders of the future.
“Digital transformation is no longer a choice, it’s an essential driver of revenue, profit and growth,” said Lisa Heneghan, partner and digital transformation lead at KPMG UK.
“Business leaders need to move away from simply fulfilling client needs, in sometimes laborious ways, to using technology to achieve results with more depth, efficiency, and decrease the probability of error.”
Despite its challenges, the disruption is welcomed by UK CEOs. The vast majority of the CEO cohort (95 per cent) agree that it is more of an opportunity than a threat, but 86 per cent are overwhelmed by the time needed to make progress.
“The reality is that digital transformation isn’t a simple change that can be implemented overnight and deliver results straight away. It requires embracement of innovative breakthrough technologies, investment in digital skills, and retraining the existing workforce,” continued Heneghan.
“This change is needed and for some it is a major turning point, especially for those that have engrained processes, to make the change otherwise there is a real possibility of being left behind by technology first businesses.”