Cocktail function: KPMG chairman Ahmed Jaffer talks change and business - #findaba16
How should smart leaders position their organisations for change? That was the central question in a through-provoking keynote from KPMG chairman Ahmed Jaffer at the firm's cocktail function on 13 October 2016 at the Finance Indaba Africa. The event was one of the highlights of #findaba16, with the who's who of CFOs and corporate South Africa enjoying the entertainment, food & drinks and networking.
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"2016 has been a tough year for South African businesses. Many factors are to blame, ranging from external conditions such as a strong US and weak Chinese economy to internal factors that we simply cannot control. A slump in global commodity prices, the crippling drought, rising local interest rates, an ideologically confused government, and headline campaigns like #ZumaMustFall, #FeesMustFall, #GuptaGate, #StateCapture, and #PravinGordhan highlight this precarious position."
Commenting on #FeesMustFall, Jaffer said:
"These protests have a massive economic effect; for us at KPMG, as well as professional services as a whole. If accounting students can't write exams, they can't graduate, and if they can't graduate, we can't take new trainees in."
Jaffer strongly believes that the protests have nothing to do with fees anymore. "It's turned into a power game now. It may have started with a plea to drop high tertiary education fees, but I honestly think they lost sight of their original goal a long time ago."
It is, however, not all doom and gloom. Despite the many challenges in the local economy, Jaffer said that South African business leaders remain optimistic about the country's growth prospects.
"The 2016 KPMG CEO Outlook highlights that South African business leaders are well aware of their many challenges and they are reasonably bullish about the future of the country. And although they are confident that their industry and companies will grow over the next year, their growth expectations are quite modest."
Interestingly though, according to the survey, South African business leaders are also clearly seeing an acceleration in the rate of technological change and the convergence of industries.
"This theme of unprecedented change comes up in every conversation we have with you. It's not just the rapid pace of technological change, it's also the disruption it brings. Of course, this cuts both ways. Most business leaders are optimistic about their own opportunities to harness technology and convergence to improve the business. The other aspect of this technological change is the impact it has on customer expectations. Many customers are of a different generation and their expectations around technology and the experience they want to have is significant as well."
"Leaders in established markets with established products and services recognise that their customers may be changing faster than they are and that those customers may not always be there. Combine the change happening in markets with what is going on in the regulatory landscape - just think of Brexit and the possibility of mandatory audit firm rotation being the latest examples - and it's clear that we are facing increasing uncertainty. It really does lend itself to the perception that this time things are different. At the same time, business leaders are still confident they can navigate the myriad of concerns and risks and uncertainties they see ahead of them but obviously it's going to require some new ways of running a business. For many older businesses, this is a particular challenge. They know they need to change, collaborate more and embrace new technologies. But they admit that change is difficult."
So how are smart leaders positioning their organisations for change?
"The best leaders begin with an environment that embraces and rewards change and innovation. The top strategic priorities that came out in the KPMG CEO Outlook speak to areas where business leaders view change as important: A stronger client focus and a better understanding of the customer; creating a culture of innovation; and the development and management of talent. Personally, I also believe the more significant findings in this transformational age are views around collaboration. If you're not collaborating with third parties then you've misunderstood the game because you can't really go at it alone in this environment where things are changing so dramatically. In this environment of disruption and business unusual."