CEOs are preparing for a future where more employees will work virtually: KPMG U.S. Chair and CEO

Paul Knopp, KPMG U.S. Chair and CEO joins the On the Move panel to discuss KPMG’s latest study of 100 CEO’s and their outlook on business and the impact of COVID-19 on the economy and business industry as a whole.

Video Transcript

JULIE HYMAN: US CEOs are getting more confident about the economy. That's according to a new survey of 100 US CEOs from KPMG. 43% of them are more confident in the growth prospects of the domestic economy compared with the beginning of the year.

Paul Knopp is joining us now. He is KPMG US Chair and CEO joining us from Texas to give us a little more perspective here on this. And it's interesting here that this is-- that they're more confident than the beginning of the year because the beginning of the year, things actually looked pretty good before coronavirus came upon us. And so it's interesting that they feel pretty confident about the economy right now.

PAUL KNOPP: Hi, Julie. Really is interesting. You know, 60% of CEOs feel more confident about the growth prospects for their own company, even more so than the domestic economy and the global economy.

I think it's really about CEOs meeting the moment. So many CEOs went into this crisis with earnings momentum. Their companies did. They were making strategic investments around digital technology, transforming operating models and transforming business models.

And then it's just also about resiliency. You know, many CEOs have managed through difficult economic cycles before, and the financial crisis is a great example of one of those where they have been planning for various kinds of crises. And it's really about meeting the moment that we're in today.

DAN ROBERTS: Paul, Dan Roberts here. It's tempting to focus right now on the pandemic and on how these encouraging results might appear, as Julie mentioned, to fly in the face of the fact that the pandemic is very much still ongoing. I mean, you're coming at us from a state that has had more cases recently.

And yet I think we'd be remiss not to also look to two months in the future and talk about the election. And I just wonder how much politics come into play here and how much confidence might or might not be affected by what happens come November, especially because so many pundits that come on our live programming are convinced that, you know, a Biden presidency would at first mean a potential pullback for stocks.

PAUL KNOPP: Hey, Dan. I think that the CEOs I speak with and organization, we're planning for a future that is going to, you know, transform what we do with our digital platforms and, you know, manage toward the purpose of our organizations. And it's going to be not relevant, you know, to some degree who's in the White House or which party is in the White House. And we think that we can manage through the cycles that might present themselves in the future.

And, you know, companies have been through these changes in administrations before. So I think that companies plan for various scenarios, and they're more focused on, you know, what lies ahead in terms of the immediate priorities and ensuring that they're operating very efficiently and effectively during this crisis.

Or it's really, you know, three crises, Dan, as we look at it. It's a crisis around health, a crisis around economics, and a crisis around social justice. So there's a lot that CEOs are facing into right now. So I think that's what's paramount and top of mind for them.

MELODY HAHM: Paul, of course the common thread in looking through the findings of your study is they're all large companies of all pretty well capitalized firms, right? So often we speak to small-business owners, people who do not have the resources to even think about staying afloat or never mind thriving or forecasting for 2021.

How do you kind of bridge those two narratives? Because I think that chasm has only grown larger in the year 2020. At KPMG, are you kind of allocating resources or trying to come up with best practices to help perhaps mom-and-pop shops or family-owned businesses? Would love to hear sort of your thinking around that.

PAUL KNOPP: Melody, that's a great point. The survey that we did was of large companies. So roughly half of the companies were more than $10 billion in revenue and another third between a billion and $10 billion. And so it's really important to acknowledge that there's a lot of economic dislocation right now, and many people are suffering. And as you said, many small businesses have closed and permanently closed, and many of those small businesses are customers of our clients, which are larger clients for the most part, but also some smaller companies.

I think that the continuation of monetary and fiscal stimulus will be really important. So we know that policymakers have talked about keeping interest rates near zero for some long period of time, upwards of two years. But also, you know, fiscal stimulus-- I think that while Congress right now is struggling to come up with a package of fiscal stimulus, there is some optimism that they will come up with stimulus. And, quite frankly, targeted stimulus for those that are really in need is going to be really important to this economy as we move forward.

JULIE HYMAN: Paul, finally I want ask you about sort of what the office is going to look like because 68% in your survey said they are going to downsize their office space. And so as you talk to these CEOs and advise them, what's sort of the biggest concern about that transition?

PAUL KNOPP: Yeah, So certainly the survey revealed that CEOs and companies are very focused on putting digital collaboration tools, digital workspace tools, digital automation tools in the hands of their employees to prepare for a future where many of us will work more virtually or remotely. So that inevitably will put some pressure on commercial office space.

I do think that it will be a hybrid model going forward where we have people that go to offices-- maybe not every day of the week, but, you know, we will have continue to have offices. And that hybrid model will probably involve more collaborative space and teaming space in those historical offices that we've visited. But it's definitely going to be the case that many more employees will work virtually as we move into the future.

JULIE HYMAN: Just like us right now. Paul Knopp is KPMG US chair and CEO. Thank you so much for joining us, Paul. Appreciate it.

PAUL KNOPP: Thank you for having me on your program today. Thank you.

JULIE HYMAN: Thanks.