Australian executives fear that their businesses will still be feeling the effects of COVID-19 in a decade’s time, according to a major global survey released overnight.
Some of those effects – such as remote working and the shift to online shopping – will continue to present risks as well as opportunities for Australian businesses, according to more than 1,000 executives interviewed for the ninth annual Protiviti Top Risks Survey.
Worries about shifts in consumer behaviour linked to COVID ranked No.2 in Australia among the 36 risks identified in the survey – although executives globally are not so worried about the lingering effects of the pandemic. They ranked the same issue 12th overall, a result mirrored among US-based executives.
The survey canvassed the views of 1,081 board members and C-suite executives from eight regions around the world.
Protiviti Managing Director Garran Duncan said that considering Australia’s effective response to the pandemic – particularly compared to the US – the local survey results were surprising.
“The supply chain of many Australian companies was seriously compromised by the pandemic, and we believe that ultimately affected the way Australian executives voted,” Mr Duncan said.
The No.1 risk in Australia was the threat of substitute products and services. But while this was ranked No.1 in Australia, it placed only 8th among executives globally and 6th in the US.
The No.1 risk globally was the move to digital technologies requiring new skills or significant efforts to upskill existing employees. Australian executives saw much less concern in the need for new tech skills, which did not make Australia’s Top 10 risks.
Mr Duncan said that although Australia is blessed with relatively strong IT skills, greater investment will be needed in the near term to lure greater digital talent to the country, utilise the latest business technologies, and reinvent business models to sustain organisations’ relevance over the next decade.
“This reality is triggering a related strategic concern that companies will not be able to keep pace with the rapid speed of disruptive innovation,” said Mr Duncan. “Facing the future with confidence requires a commitment to position the organisation for a disruptive future.”
There were several major differences between Australian executives and their overseas counterparts:
- Working from home or the office and its effect on running a business was ranked 5th in Australia but 31st globally and 28th in the US.
- The threat of not being able to adapt business models to embrace the evolving “new normal” was ranked 7th in Australia but a lowly 34th globally and 33rd in the US.
- Growth opportunities through acquisitions/joint ventures may be more difficult to identify and implement – an issue ranked 8th in Australia, but 24th globally and 27th in the US.
“Unfortunately, some organisations continue to manage risks the way they have for many years, even though the risk landscape is changing dramatically as businesses and entire industries are transformed in the digital economy,” said Mr Duncan.
“The need for greater transparency about the nature and magnitude of risks undertaken in executing an organisation’s corporate strategy continues to be high as the expectations of key stakeholders regarding risk management and risk oversight remain strong.”
The one commonality across all executives was the effects regulatory changes might have which affect the way products and/or services are produced or delivered. This ranked No.3 in Australia and No.2 globally and in the US.
Top 10 issues for 2030 of Australian executives
|1||The threat of substitute products or services|
|2||The lingering effects of COVID-19 may impact customer demand|
|3||Regulatory changes may affect how products/services are produced/delivered|
|4||Resistance to change in our culture may restrict our ability to adjust|
|5||Ongoing demands for working remotely|
|7||Unable to adapt business model|
|8||Difficult in identifying growth opportunities|
|9||Challenge to attract and retain top talent in a tightening talent market|
|10||Slow to upgrade digital capabilities|
Top 10 issues for 2021 compared to 2030 of Australian executives
|2021 Rank||2030 Rank||Risk|
|1||14||Pandemic-related policies and regulation impact business performance|
|2||7||Adapting to the “new Normal”|
|3||2||Impact to customer base due to the market conditions imposed by and in response to COVID-19|
|4||5||The impact of working from home and the office|
|5||3||Regulatory changes and their impact on how products or services will be produced or delivered|
|6||8||The difficulty to identify and implement growth opportunities through acquisitions, joint ventures|
|7||12||The difficulty in sustaining customer loyalty and retention|
|9||16||Economic conditions constrain growth opportunities|
|10||21||Not prepared for a crisis|
The “Executive Perspectives on Top Risks for 2021 and 2030” report from Protiviti and North Carolina State University provides respondent details broken out by company type, size, industry, geographic region, and respondent role. The report, along with an infographic and a podcast about the survey results, is available for complimentary download here. Protiviti will host a one-hour webinar with a panel including Beasley, Bozzella, DeLoach, Scott, and Manisha Shah, a Protiviti managing director and leader of the privacy practice, to discuss the implications of the survey’s findings on February 24, 2021, at 11:00 a.m. PST. Attendance is free with registration here.