Canadian private-company insights from the 22nd CEO Survey
Private companies in Canada are under significant pressure as they face uncertain economic conditions and numerous other challenges. As a result, private-company CEOs are more pessimistic about their growth prospects than they were last year. This risk aversion has the potential to hold back private companies in an era where boldness is what’s needed to move forward.
of global private-company CEOs are very confident about growing revenue over the next 12 months, compared with 38% in publicly traded companies.
Our global Private business trends 2019 report delves into the results of our 22nd CEO Survey to explore how external volatility is impacting the confidence of CEOs of private businesses globally and what they’re doing to position themselves to succeed in an uncertain future.
While global trends are important, private businesses in Canada have their own challenges. Over the next decade, Canadian private companies are expected to undergo a massive generational shift as baby boomers pass the baton to the next generation or prepare their business for sale. According to our Once in a lifetime series, 70% of owners of Canadian private companies plan to sell or pass on their business over the next few years.
This transition, combined with business issues like the availability of key skills and potential cyber threats, will cause upheaval—but Canadian private companies able to embrace disruption could emerge stronger and better able to seize opportunities. To begin their evolution, they need to focus on two highly interconnected factors: talent and technology.
More than two-thirds of CEOs of private businesses are finding it more difficult to hire workers, while one-third are extremely concerned about the availability of key skills. Without the talent required to operate in an ever-changing business environment, private companies will find it difficult to manage innovation, customer demands and their bottom line—all at the same time.
Recruiting the right talent with new skill-sets can make a big difference. But CEOs need to recognize that supporting and training existing talent is just as important. In our CEO Survey, Canadian CEOs chose the education pipeline as their top source of new talent, whereas global executives prioritized upskilling and training programs.
While companies should consider partnerships to facilitate training and upskilling, they can’t rely solely on external organizations (e.g. colleges, universities, government agencies) to address skills gaps. Private companies need to investigate their future skill demands and create a targeted plan for obtaining them. And while 63% of Canadian family businesses have their next-generation employees learning on the job, jobs are susceptible if companies don’t continue to take an active role in retooling their workforces.
Private-company CEOs also need to prioritize training for future leaders. While almost half of family businesses in Canada plan to pass on management and/or ownership of their organization, 27% have not yet involved the next generation in order to prepare them for the shift. In our Once in a lifetime series, we discuss the succession challenges of Canadian private and family businesses and outline ways they can better manage their transition.
For many Canadian private companies, the only way to move forward confidently and cost-effectively despite ongoing uncertainty will be to leverage technology innovations like AI and smart data analytics. Globally, 82% of private-company CEOs agree that artificial intelligence (AI) will significantly change their business within the next five years—a view closely mirrored by Canadian CEOs.
While many Canadian CEOs of private companies recognize the importance of technology to their future success, most have focused their efforts to date on one-off initiatives. To realize the value presented by innovative technologies like AI and robotics process automation, private companies need to approach them more holistically. To do this, CEOs need to create a vision of what they want their business to become and then make sure any technology investments are aligned with this vision and their strategic goals.
Canadian private businesses are uniquely positioned to use disruption as a catalyst for growth, but only if they’re willing to be bold and limit their aversion to risk. Given the upcoming generational shift, they have an unparalleled opportunity to interconnect talent and technology initiatives to forge more competitive businesses that are well-equipped to face any challenge.
We know that being bold can be hard. Our Designed to disrupt conference series is all about helping private companies do all they can to crest the current wave of digital innovation—from understanding how to find and retain the right talent to finding a balance between brains and ’bots. This year, the conference is centred around three main themes: growth, data and analytics and the convergence of AI and talent. [Learn more]
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