Australian chief executives are taking a more conservative approach to growth than their global peers, with the focus on efficiency and reducing costs rather than overseas expansion, according to a new KPMG survey.
The KPMG 2015 Global CEO Survey, released yesterday, surveyed 1,278 global chief executives including 52 bosses of large Australian companies.
When asked about their organisation's top three strategic priorities for the next three years, Australian CEOs were more concerned about 'strengthening their client focus' and 'reducing cost structure' than global CEOs.
Furthermore, only 19 per cent of Australian CEOs listed geographic expansion as a strategic priority – whereas 29 per cent of global overseas were looking outside their home country.
Commenting on the results, KPMG's Australian chairman Peter Nash said the lack of interest by Australian CEOs in expanding overseas caused him "a level of angst".
"We’re really quite conservative investors for growth. We see more opportunities for growth within our own borders than we do at a global level," Mr Nash said.
He believes the predominant focus of Australian CEOs is on how to draw more profitability and more activity out of their existing businesses.
Colloquially, Australian bosses are looking to "sweat their existing assets" rather than acquire new ones.
The focus is on customers' and clients' experience and the products and services they want.
Reducing the cost structure of a company is another "classic sweat the assets strategy", Mr Nash added.
"But [Australian companies have] been reducing cost structures for a couple of years now, so I wonder how much opportunity is left in that particular area," he said.
Much of KMPG's consulting work over the "last few years" has been focused on "getting cost out of businesses" – but there is an "endgame to that", Mr Nash continued.
"At some stage you have to start looking to how you grow the top line to achieve profitability, not keep shrinking the cost base," he said.
Despite the focus on reducing costs, the majority of Australian CEOs are still expecting to increase the headcount of their companies over the next three years, according to the survey.
They are also more confident about growth prospects than their international peers.
Forty-eight per cent of Australian bosses are 'significantly more confident than last year' when it comes to growth and 37 per cent are 'somewhat more confident than last year' – compared with 25 per cent and 36 per cent for global CEOs, respectively.
"That’s not consistent with some of the rhetoric we see around the market that corporates are holding back on investment decisions because they are concerned about volatility and the nature of the marketplace at the moment," said Mr Nash.