KPMG recently released their annual list of what Australian executives say keeps them up at night. But if it is intended to be a list of real-life crisis risks it falls far short.
Executives should be kept awake at night by the risks of organisational crises which immediately threaten their reputation, their operation, their share value and the security of jobs. Yet those don’t seem to be the risks they are reportedly worried about.
So, what are Top 10 issues which KPMG say business leaders think will keep them awake in 2020?
- Digital transformation
• Global political and economic environment
• Regulation and regulatory environment
• Innovation and disruption
• Sustainability and climate change
• Public Trust
• Leadership capability, accountability, stability
• Customer and citizen centricity
• Political paralysis and effective government planning and response
• Workforce upskilling and transformation
Public trust and leadership accountability are general enough to cover a multitude of problems, but the list overall doesn’t seem to focus on the risks which generate real-life nightmares.
Now take a look at what crises have actually dominated the headlines, damaged companies and really demanded executive attention in Australia over the last year or so.
• Product recalls
• Allegations of price rigging
• Food contamination scandals
• TV exposes of industry shortcomings (think horse racing, aged care, gambling)
• High profile defamation claims
• Executives charged with stealing and fraud
• #MeToo and claims of sexual harassment and discrimination
• Costly payouts over statements by employees (think Alan Jones and Israel Falau)
• Prosecutions for wage theft and underpayment of employees
• Financial institutions “fees for no service” and a host of other malfeasance
• CEOs forced to resign over personal or company misbehaviour
• Massive data breaches and IT failures
That’s just a sample and, rather incredibly, cyber-security/data privacy was on the KPMG list last year but has somehow dropped out of the top ten. HOWEVER the Australian executives were not actually asked unprompted what they thought would keep them awake at night. KPMG told me the participants were asked to rank a list of areas provided by the company in terms of concern.
And despite a torrent of damaging headlines which spell out the impact of a crisis on reputation, brand, share value and the chances of corporate survival, the survey list appears to suggest that crisis preparedness is not a priority.
No-one would question when KPMG said issues such as climate change, trade wars, the rise of China, political instability and over-regulation should be “on the agendas of Boards and CEOs.” But are these really the issues which “keep them up at night”?
The latest PR News/Crisp survey of public relations professionals shows that more than 20% said their CEO was “not really” or “not at all” willing to invest in strong crisis preparation, and 30% said their company never or rarely conducts a risk assessment of potential reputation threats. And a Harvard study in 2018 monitored CEOs over a three month period and found they spent just 1% of their time working in crisis management.
Maybe that’s what should be giving business leaders nightmares.