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Ceo survey belgium 2012 final
1. www.pwc.com/ceosurvey
Delivering results
Growth and value in a volatile world
Country summary: Belgium
A Belgian perspective on
PwC’s 15th Annual Global
CEO Survey
2. Introduction
The 15th Annual Global CEO Survey is based on a total of
1,258 interviews with CEOs in 60 countries, carried out between
22 September and 12 December 2011. 291 interviews were done in
Western Europe, of which 34 in Belgium, compared to 17 in France,
38 in The Netherlands and 49 in Germany. None were carried out
in Luxembourg. The Belgian CEO interviews were spread across a
range of industries: asset management; banking and capital
markets; insurance; entertainment and media; healthcare;
industrial products; retail and consumer products. Additional
insight into what is underpinning CEOs’ outlook, quotes from their
interviews and more extensive extracts, as well as responses by
sector and location can be found at www.pwc.com/ceosurvey.
ii PwC 15th Annual Global CEO Survey
3. How is 2012 shaping up?
The year 2012 is unfolding with wide But businesses are not on the Rather CEOs are manoeuvring to
disparities in potential outcomes in defensive. Despite uncertainties, CEOs outpace: they are three times more
many economies, and little prospect are taking deliberate steps to stretch in confident in their own capacity to
for a coordinated turnaround: just markets they believe are most generate growth in their business than
15% of CEOs believe the global important for their future. As a result, they are in global economic growth.
economy will improve this year. close to 40% are ‘very confident’ in Here Belgian CEOs surveyed are
Belgian top executives are significantly prospects for revenue growth in their surprisingly upbeat: they are four
more pessimistic: only 3% believe in companies in the next 12 months. times more confident in their own
recovery, whereas 62% of Belgian Again, Belgian CEOs are less bullish: growth potential than that of the
CEOs think the global economy is set only 12% share this view. Strategies no world at large. Correspondingly,
to decline further. Only the Dutch are longer rely on riding economic Belgian business leaders predict more
more pessimistic, with 68% expecting updrafts – or even riding out volatility. significant change to their strategies
a worsening economic climate. than others: 26% compared to 13%
globally, and only 4% in Germany and
The Netherlands respectively. The
main drivers of strategic reorientation
in Belgium are competitive threats, the
“CEOs are very concerned about economic impact of government debt, changes in
uncertainty and the pace of recovery. The risk tolerance and the availability of
optimism that had been building talent.
cautiously since 2008 has begun to recede.” The optimism among Belgian business
leaders in their ability to generate
Karel De Baere, growth also reflects the tough choices
Chairman, PwC Belgium made and hard work done since the
crisis began in 2008. With stronger
balance sheets, improved cost
structures, and a greater awareness of
global risks, CEOs have a renewed
sense of preparedness when facing
today’s challenges. Belgian CEOs are
focusing on innovation in products and
services for growth in 2012, compared
to their Dutch and German neighbours
who are focusing more on M&A and
increased market share respectively.
Key findings in Belgium 1
4. Difficult conditions in the near term However, this frugality shouldn’t Over the next three years, CEOs will
have CEOs paring down ambitions in suggest a lack of appetite for the right be reconfiguring their business models
response to disappointing recoveries in investments. Operational for a world where risks and
Europe and the US. Over two thirds of improvement remains on the agenda, opportunities are increasingly
the Belgian CEOs interviewed said the even after three years of crisis. 66% of interconnected, yet where sources of
ongoing sovereign debt crisis in CEOs worldwide plan to implement a growth are often very much local and
Europe has had a direct financial cost cutting initiative in 2012 – and in may be outside the familiar terrain.
impact on their company. Many CEOs Belgium 85% plan to do so. Belgian The rise in investment and commerce
are holding back their cash reserves as business leaders also plan more to and from emerging economies is
a buffer against an economic outsourcing and divestment than their fundamentally altering approaches.
contraction: fewer CEOs are planning neighbours in Germany and The
a ‘major change’ to capital investment Netherlands in 2012. In terms of In response, CEOs are concluding that
strategies this year than in 2011, while investing directly in growth, over a their businesses need to pivot across
38% are making no change at all. quarter of CEOs, both globally and at their priority markets, both developed
Belgian level, anticipate a cross-border and emerging, to embrace
acquisition this year. Belgian CEOs are opportunities in markets they may be
focused on France and Germany as the less familiar with. They are facing
countries they consider most several challenges in this regard.
important for growth abroad, followed
by China and Russia. Dutch CEOs are
above all focused on Germany as their
most important export market.
Graphic 1: Do you believe the global economy will improve, stay the same, or decline over the next 12 months?
Base: All respondents (1258; 49; 38; 34)
2 PwC 15th Annual Global CEO Survey
5. Making it happen
In past economic downturns, the world CEOs believe the forces of global How CEOs are able to succeed in this
has experienced rises in protectionism. integration will stay on track: 45% interconnected world, with a
But this time there has been progress believe the world will become more potentially slower and more volatile
on bilateral and regional levels in open to free international trade (with global economy, will hinge on how
fostering cross-border commerce and 31% dissenting) and 56% are well they master the three execution
investment. Alliances continued to convinced cross-border capital flows challenges mentioned below.
evolve into late 2011 with the US- will not come under new constraints.
Korea free trade pact and the proposed The Belgian CEOs surveyed are
Trans-Pacific Partnership. Free-trade similarly optimistic about capital flows
purists might argue that preferential (50%), but only 26% believe openness
deals are a form of protectionism. But to free trade will increase.
the reality is that trade and cross-
border capital flows have rebounded
since the downturn began. Belgian
CEOs are much less concerned about
protectionism, exchange rate volatility
and corruption than CEOs globally,
perhaps due to their focus on growth
in neighbouring France and Germany.
The tax advantage
Market opportunity, natural resources, talent – all of these factors matter
when companies decide where and how to locate operations. But tax may
be the most significant: 44% of CEOs worldwide (and 47% of Belgian
CEOs) say tax policies are a ‘significant factor’ in their decision-making on
cross-border locations. CEOs are paying close attention to changing tax
conditions as a result of high debts and deficits in developed economies.
Governments continue to reform their tax systems to help businesses grow.
Over the past seven years more than 60% of economies made paying taxes
easier with 244 reforms, according to Paying Taxes 2012. Globally, the
total tax rate has fallen by 8.5% since 2006; the time required to comply
with taxes declined by more than one day per year; and the number of tax
payments required dropped by five.1 Belgian business leaders are much
more concerned about the increasing tax burden than their colleagues
in Germany and The Netherlands. 53% see increased taxes as a potential
threat to the business, compared to 33% and 18% in Germany and
The Netherlands respectively.
1
http://www.pwc.com/gx/en/paying-taxes/index.jhtml
Key findings in Belgium 3
6. Build or buy? Acquisitions always
have a role to play in growth plans.
Responses indicate the potential of a
modest pull-back on international
deal-making over the next 12 months:
28% of CEOs globally plan to complete
a cross-border deal in 2012 (29% for
Belgian CEOs), a decline from the 34%
1. Worldly wise, locally savvy last year. The pool of potential buyers Segmentation is at the centre. CEOs
is becoming more diverse, however. place high importance on adapting to
Developed and emerging economies Firms from China, India and elsewhere local customer preferences. Four
alike are considered destinations that have emerged as major international billion people live in countries where
CEOs believe are critical for their investors in recent years. Acquisitions the per capita income is US$ 1,000-
organisations. Over 60 different are always risky. Yet, our research 4,000 per year, for example, an
economies were named by CEOs as key suggests that acquisitions in emerging ‘emerging middle class’ that is
overseas markets, some adjacent to markets – exactly the type of prompting business leaders to
their home market and others on the acquisition that appears to be more fundamentally rethink business
other side of the world. A sensible popular today – are particularly risky, strategies. It’s not only products that
strategy for globalisation today means with lower chances of success even for must be adapted or built anew, but also
more than building cheaply in one proven deal-makers. Acquirers will production, distribution and
location and selling in another. CEOs need to learn new post-merger marketing capabilities – entire
are investing to build fully-fledged integration competences to make these business models. Success involves
operations in their priority markets to deals work. understanding customer segmentation
build relationships with their and the dynamics driving it.
customers, innovate, take advantage of Less global export, more local
local talent and brands, reduce risk, rapport. How businesses achieve the Innovating on multiple fronts.
improve access to capital, and right mix to leverage global Improving the effectiveness of
strengthen supply chains. Building capabilities while servicing distinct innovation continues to be a major
manufacturing capacity, for example, local needs is a defining question for strategic priority. Three out of four
is important for many CEOs in each of growing in dissimilar markets. The tilt CEOs – at both global and Belgian level
their key markets and China faces is towards decentralising, and creating – plan to change R&D and innovation
increasing competition as CEOs reach localised products. Substantial capacity in 2012. CEOs in insurance,
further afield. CEOs are making deeper proportions of CEOs, between 20% asset management and retail are more
commitments to priority markets, and 36%, say they are designing new likely than those in other industries to
guided by domestic customer demands. products specifically for local markets. emphasise innovation in new business
models – often taking advantage of
new technologies. Those in industries
with a historical dependence on
“ he good news is that the long cycle of the
T innovation are among the most likely
slowdown has given CEOs greater to change approaches. Pharma and life
sciences, for example, has been in the
experience of managing their businesses forefront in shifting some research
with ever greater efficiencies. 59% of resources to faster-growing economies.
Belgian CEOs are confident they can While primary RD is still largely
conducted in home markets,
deliver revenue growth despite the businesses are shifting capabilities to
difficult conditions.” their priority markets, partly to seek
footholds in fast-growing economies,
Karel De Baere,
but also because of improved scientific
Chairman, PwC Belgium
capabilities.
4 PwC 15th Annual Global CEO Survey
7. CEOs that were financially impacted by the
sovereign debt crisis in Europe
56%
Belgian CEOs
79%
2. Expect the unexpected
Global risks often have local sources sheets have improved, cash reserves
and last year was no exception. 56% of have been built up, and supply chains
CEOs were financially impacted by the have added redundancies. These types
sovereign debt crisis in Europe (79% of of solution – financial buffers, supply
Belgian CEOs), another 29% by the chain redundancies – point towards
earthquake and tsunami in Japan, and one way to approach risk: less
21% by the political upheaval in the emphasis on the probability of events,
Middle East. Yet, CEOs report that they and more on how business can be
are less likely to focus on risk disrupted. When the focus is preparing
management than on areas ranging for consequences, discussions are more
from technology investments to likely to occur across functions
reorganisation. Significant defensive involved in strategy, operations, risk
steps have already been taken: balance management and business continuity.
Finding growth away from home
With CEOs looking for growth outside of their home markets, risk practices
will have to adapt. Companies cannot control or predict the economic,
social and political risk factors influencing their operations in priority
markets, but prudent risk managers are getting a better understanding of
how these forces can help or hinder their plans. Ongoing risk monitoring
and incorporation of new information into business models can allow savvy
businesses to pivot away from known risks, plan for unknown risks, and
capitalise on opportunities. Risk resilience involves constantly returning
to the question, ‘What should my business model be, given the way the
political, economic and social conditions are changing in this country?’ 56%
of Belgian CEOs intend to change their approach to managing risk in the
next 12 months, and 56% state that a change in risk tolerance is driving a
change in their strategy (compared to only 34% at global level).
Key findings in Belgium 5
8. Graphic 2: How concerned are you about the following potential business threats to your growth prospects?
Base: All respondents (1258; 49; 38; 34) - Respondents who stated ‘extremely’ or ‘somewhat concerned’
6 PwC 15th Annual Global CEO Survey
9. Regional concerns reveal regional • Western Europe: Outlook for • Latin America: Underdeveloped
risks. The risk of global economic taxes, sovereign debt crisis, infrastructure
volatility is a common threat for all financial market stability
CEOs. Yet, comparing how CEOs • Middle East and Africa: Skills
perceive other threats to their business • North America: Constrained state shortages and corruption
offers some insight into the risks that spending, skills mismatches
are top-of-mind in different regions.
• Asia Pacific: Currency volatility,
energy costs
Graphic 3: How concerned are you about the following potential economic and policy threats to your business growth prospects?
Base: All respondents (1258; 49; 38; 34) - Respondents who stated ‘extremely’ or ‘somewhat concerned’
Key findings in Belgium 7
10. 3. The talent challenge The reality is far different. Shortages Hiring talent. Worldwide, 43% of
are evident everywhere. More CEOs CEOs across industries say it’s become
Theoretically, finding good candidates are changing talent management more difficult to hire. In Belgium 62%
should be a near-frictionless exercise strategies than are adjusting of CEOs surveyed say the situation has
today. There have never been as many approaches to risk: 23% expect ‘major worsened, 38% say growth at home
educated people in the world, nor has change’ to the way they manage their was impacted by talent constraints,
it ever been as easy for employers to talent. Skills shortages are seen as a and 59% said talent expenses rose
tap this vast pool online. Highly- top threat to growth. And talent more than expected. The challenges
skilled talent is also highly mobile but shortages are impacting profitability are acute in both knowledge industries
just in case, networking advances now. One in four CEOs said they were such as pharmaceuticals and life
mean many more tasks can be handled unable to pursue a market opportunity sciences, and technology, and heavy
remotely or outsourced. or have had to cancel or delay a industries such as industrial
strategic initiative because of talent. manufacturing and automotive
One in three is concerned that skills sectors. In Belgium increased difficulty
shortages will constrain their in hiring is attributed to a deficit of
company’s innovation. skilled candidates, in particular for
production workers (according to 59%
of Belgian CEOs surveyed). Even
industries that have retrenched
workers in large numbers like banking
are still struggling to get the right
people. Developed market banks are in
“ EOs say they are having difficulty
C competition with one another but also
finding and retaining skilled people in with increasingly ambitious and
their industries. Belgian CEOs think that well-capitalised local competitors in
faster-growing economies.2 Twice as
creating and fostering a skilled workforce many banking CEOs plan to expand
should be a top priority for government.” workforces than to cut them in 2012.
Strikingly, 32% of Belgian CEOs
Karel De Baere,
surveyed said they will move their
Chairman, PwC Belgium
operations within 3 years because of
talent availability.
2
PwC, “Securing the talent to succeed: Making the most of international mobility in financial services,” Nov. 2011
8 PwC 15th Annual Global CEO Survey
11. Making talent strategic. CEOs are Developing talent. Frequent job- The Belgian CEOs surveyed are better
determined to take a more strategic hopping is endemic to many markets, informed but hungry for more: only
approach to how they manage their at all levels. This is a trend many CEOs 12% say the information they receive
workforce today and plan for future would like to counter. Two-thirds say on the cost of employee turnover to
needs. A longer-term, strategic view is it’s more likely that senior talent will their organisations is not adequate but
needed if they want to close the gap come from promotions within their 56% want more information on top of
and map how talent needs will change. companies over the next three years. what they currently receive. To better
As part of this effort, CEOs are closely While outsiders bring benefits, the develop talent, however, companies
integrating HR with business planning loss in productivity and time when a will need to understand what works in
at the highest levels of the company: valuable employee leaves, as well as one market might not work in another.
79% of CEOs say the chief human the expense related to retraining, are Mentoring programmes, for example,
resources officer is a direct report. better appreciated: 21% say the work in some countries but fail in
information they receive on the cost others, because of how coaching is
They are also seeking a better of employee turnover to their received in different cultures.
understanding of the scale and organisations is not adequate and
effectiveness of their investments in 47% receive some information but
talent. For many CEOs, the want more.
information they receive tells them
how the business is performing
today, but not how investments in
employees will generate future
growth. Such measurements can’t
More comprehensive reporting on employee engagement
isolate skills gaps and struggle to
identify the pivotal jobs that drive Employee engagement analysis can give business leaders a clear link
exponential value; they do not between engagement and improved performance measures like retention
measure employee engagement or and discretionary effort. Forward-looking businesses are coupling a clear
team performance. These are much view of the pivotal roles within their business – the roles that create (or
harder to measure, which is one destroy) disproportionate business value – and applying data mining
reason they’ve been neglected. and predictive modelling to gain insight into retention, recruiting or
productivity analysis. For example:
• a retention score for each employee, which measures the probability that
an employee will leave in the next year;
• use of engagement studies to identify barriers to high performance
within specific groups of employees, as well as the tangible
improvements that can drive both engagement and business
performance; or
• a focus on the direct market-facing impact employee engagement has
on measures of business performance such as customer satisfaction or
product quality.
Key findings in Belgium 9
12. Holding the organisation together. Moving talent. Across all industries, Foreign multinationals remain
High-potential middle managers are more CEOs would rather local desirable employers, but top talent in
the employees more CEOs fear losing leadership run local business units. India and China, among other
the most (53% at global level Today, 29% of senior managers are economies, has many more options
compared to 38% in Belgium). These transferred from their headquarters with domestic multinationals today,
operational managers are often the country to newer markets; in an ideal which can offer opportunities to run
closest to changing customer demands world, only 18% of CEOs said they growing, global businesses and can
and the ones charged with executing would continue to move their senior increasingly match Western
the strategic direction. This is one leaders from headquarters (12% in compensation packages. While 53% of
reason why formal succession Belgium). This is becoming CEOs expect to move experienced
planning in some companies is starting increasingly hard to do in fast-growing people from the home market to newer
to go deeper into the organisation. economies. markets to fill skills gaps (65% in
Efforts to identify talented managers Belgium), reverse transfers involving
earlier in their careers, and to moving top performers in emerging
specifically devote development markets into developed markets for a
resources to them, are being made in short period of time to gain
more organisations. ‘credentials’ can also be effective
retention and development measures.
Investing in workforce development
Skills constraints are going away and governments are responding. India
and China have invested heavily to upgrade skills and widen access to
education, and are cultivating their substantial diaspora of students and
entrepreneurs to encourage their return. Singapore and Malaysia are taking
comprehensive, long-term approaches to attract highly-skilled foreigners
to enhance their economies. In short, policy-makers are seeing the effects
of talent mobility on economic competitiveness and acting to attract and
retain talent. This is likely to encourage more global talent mobility, which
will impact business talent management strategies.
Leading companies take the long view and are partnering with their
governments to invest in workforce development. Most CEOs believe
business has a role upgrading skills outside of their own companies and
78% say they are making direct investments in workforce development.
The Belgian CEOs surveyed are even more proactive, with 85% investing
directly in workforce development. This is part of a wider trend of
businesses reaching back further into the talent pool and seeking to ‘grow
their own’ with employer-led universities.3
3
‘Taking responsibility: Government and the Global CEO’, PwC Dec. 2011.
10 PwC 15th Annual Global CEO Survey
13. What’s next
The following questions are distilled from CEOs’ many approaches to resolving the execution challenge, and their insights into the
constraints in 2012, and can help business leaders achieve the balance they’ll need to grow their businesses in these volatile times.
1. How local is your global growth 2. How are you balancing 3. Is your talent strategy fit
strategy? CEOs are shifting global capabilities with local for growth? Cost-focused
away from an export mindset opportunities? CEOs are measurements around talent
to respond more attentively to developing new capabilities in their strategy need to give way to
local markets. Over 70% of CEOs important markets, and tailoring measurements around returns on
are planning to grow domestic approaches to ensure that the best investment, as leaders increasingly
customer bases in their important of their global expertise supports implement new approaches to solve
markets. Competition will be tough, rather than imposes operational their talent shortage problems.
particularly when operating in structures on the local business. Two-thirds of CEOs are seeking
markets that are dissimilar and One in five plan to innovate locally better analysis to make and inform
far afield. The traditional way of in their important markets; and investment decisions around
setting a grand global strategy and over a third expect to expand people. Implementing strategic
pushing it out to operations may internal service delivery. They’ll workforce planning will help
need to give way to a more agile need to find the right scale to leaders look beyond the talent
strategy that can be adapted at local bring the benefits of their global shortages today to align the talent
level. organisation to the local level and needed to fulfil business plans.
maintain profitability.
“ ur strategy is all about
O
going local, because it is a
market hundreds of times
bigger than cross-border.”
Lazaro Campos,
CEO Swift
Key findings in Belgium 11
14. 4. Are your innovations creating 6. Are you responding to the 8. Does your governance model
value for your customers – or needs and constraints of the account for the ways in which
just novelty? When it comes to communities in which you organisations’ and people’s
innovating in and for local markets, operate? CEOs recognise that expectations are changing?
delivering the value customers in sustainable business growth The organisation of the future will
those markets expect is paramount. requires working closely with local likely be accountable to a different
Between a fifth and third of all populations, governments and mix of stakeholders from a different
CEOs say they are creating products business partners, and investing in mix of markets. Governance models
specifically for their important local communities. This can mean need to adapt, beginning with
markets. It will be increasingly creating job training programmes, building a leadership pipeline that
important to get segmentation helping to manage resource reflects potential future demands.
right – at the regional, country, city constraints or contributing to It’s a key area of focus globally,
or even neighbourhood level – and health solutions. Two-thirds plan with 53% of CEOs concerned
to design operating models around to increase investments in the about recruiting and retaining
serving those segments. That means next three years to help maintain high-potential middle managers
looking beyond product design to the health of the workforce, for and a desire to build more diverse
include factors such as production, example. leadership teams. Only 38% of
distribution and marketing. Belgian CEOs surveyed shared
7. Where are the biggest this concern. They are more
5. Do your strategic plans account opportunities for business preoccupied with recruiting
for the macro impact of micro and government to coordinate and retaining skilled production
risks? The range of CEO concerns better? Compliance with a workers (59% vs. 33% globally).
reflects how diverse sources of risks growing body of regulations,
are: 25% are ‘extremely concerned’ particularly when operating in
instability in capital markets will disparate markets, is a complex
impact business, for example. The task for most businesses, which
number of potential risks and their is why CEOs consistently report
inter-relationships makes it very over-regulation as a threat to their
difficult to predict what will occur growth. However, the successes of
where and when, but companies the private and public sectors are
can better deal with uncertainty – increasingly intertwined. Half of
and take a more strategic approach CEOs believe workforce skills and
to risk – by focusing on the likely infrastructure developments are
consequences, no matter the cause. top priorities for their governments.
The Belgian CEOs surveyed are
clearly more concerned about
fostering a skilled workforce
(74%), and much less worried
about improving infrastructure
(32% vs. 53% of CEOs globally).
Eight in ten CEOs say their
business has a role in workforce
development, other than their own
employees. Effective partnership
models – better communication,
improved coordination, and true
collaboration – are emerging
around the world.
12 PwC 15th Annual Global CEO Survey
15. Contact
Karel De Baere
Chairman
Pwc Belgium
+32 2 710 8241
karel.de.baere@pwc.be
Key findings in Belgium 13
