KPMG Releases Adaptability Index Showing 81% of Executives Facing Higher Board Expectations

# KPMG Releases New Adaptability Index KPMG released a new index on organizational adaptability, based on surveys of 300 C-suite leaders, analysis of earnings calls from 177 publicly traded companies, and capital data across six industry groups. The index measures strategic, cultural, and operational adaptability. Fortune reported on the findings.

81% of executives reported that boards have raised expectations for their organizations’ adaptability. Only 30% of executives said their organization’s structures, roles, and processes can reconfigure quickly as business needs change.

Less than half of executives say they find technology very effective at improving adaptability. Only 24% of executives identified more dynamic talent deployment as a key change made over the last year. Just 9% of executives identified increased psychological safety as one of the behaviors their organization changed most in the past year.

Industry Hiring Declines and Sector Scores Four out of six industry groups in the index recorded year-over-year declines in hiring.

Manufacturing and energy sector scores the highest strategic adaptability at 71 out of 100 in the index. Healthcare leads the overall index at 53. TMT sector scores 41 on cultural adaptability in the index.

Transformation Outcomes and Priorities 57% of leaders said improving performance and efficiency was a top priority last year. Fewer than 10% of leaders said developing stronger workforce training programs was among their primary objectives last year.

46% of executives report burnout and change fatigue as an unintended consequence of their adaptability efforts. 81% of executives say their boards or owners have raised expectations for organizational adaptability.

Related Economic Insights Morgan Stanley economists published an AI disruption tracker on April 13.

Young workers in high-AI-exposure occupations have seen unemployment rise more sharply since 2023. A Federal Reserve Bank of Richmond survey finds that CFOs expect AI’s biggest impacts to fall on decision speed and accuracy, output per worker, and time spent on high-value tasks in that order. KPMG is more than 150 years old.