What challenge do CEOs expect to have the most impact on their companies during the next three years? Is it the economy, globalization or regulations? In fact, CEOs point squarely to technology as the factor they believe will most change their companies, according to IBM's latest survey of CEOs released this week in Kenya. Specifically, technology that helps creates connections.
"Because company leaders realize that they are reaching an inflection point. Their ability to create connections is expanding at a dizzying clip, one that CEOs know is an opportunity, but that also presents major risks", says Tony Mwai, the Country General Manager of IBM East Africa.
IBM recently announced the largest face -- to -- face CEO study; the company spoke to over 1,700 CEOs to discover their priorities, concerns and plans for the future. These results were published in May 2012. Now in its tenth year, IBM's bi-annual Global CEO study paints a fascinating portrait of the evolution of CEOs' thinking during this extremely dynamic and challenging period.
Innovation has been the topic in every organization; however the study reveals that CEOs think that organization values will drive more of this with the help of technology.
The study reveals what these executives are thinking and planning, and point to emerging trends including: How CEOs are responding to the complexity of increasingly interconnected organizations, markets, societies and governments, what changes they plan to make to their organizations to excel to address this complexity, and where will they focus to differentiate and lead amidst the external forces garnering their attention.
Social media, collective intelligence, and analytics of the big data these interactions are rapidly becoming the make or break foundations for getting business done, keeping employees productive and happy, and courting customers. In 3-5 years 55% of CEOs will engage social media as growth market mechanism to engage more customers.
CEOs know how to adapt to tech transformations. But what's different about their connected era is how profoundly it's winding its way throughout entire businesses, how fundamentally it's reshaping the dynamics of what it means to do business, to engage with customers, to innovate. The new 2012 Global Chief Executive Officer study by the IBM Institute of Business Value pinpointed three main strategies leading CEOS are taking to tackle these challenges:
Engage customers as individuals
Organizations have always observed and researched their customers. What's different now is all the data people are dishing up about themselves on social networks, apps or Web sites. Customers used to fit into segments, such as "Soccer Moms between the ages 30 and 40." Now each individual is a demographic of one.
Mwai says due to the availability data, every customer now has an individual identity. Consumers are providing data about what they want how they shop, their tastes, their lifestyle and ambition, providing an opportunity to form closer relationships with favorite brands that recognize and get what makes each individual unique.
That's why CEOs are investing more in customer insights than any other area: more than operations, competitive intelligence, financial analysis, or even risk management. Every business needs to understand each of their customers more intimately.
Promote openness internally
In today's new connected era, it's impossible for CEOs to gauge the employee skills they'll need next three or four years down the road because the market is changing so rapidly and dramatically.
That's why the leaders are focusing on recruiting employees who are collaborative, communicative, creative and flexible. And they're reinforcing those traits by taking steps such as developing unconventional teams that mix specialties and expertise and providing ways for employees to develop diverse networks of contacts inside and outside the company. At the same time, CEOs aren't delegating the championing of collaborative innovation to HR. Instead, they're leading by example. Though social media is uncharted ground for many of them, they realize they have to reinvent themselves.
Bausch & Lomb, for instance, created a system that lets employees collaborate over social media and mobile platforms. The idea is simple: By getting more information to and from the field to employees when and how they want it -- basically mimicking how people use cell phones outside of the office -- the eye care company can spur productivity.
Partnering is at an all-time high. So what changes can companies make in how they approach partnerships to differentiate themselves? To propel innovation, CEOs are expanding how they use collaboration technologies with partners and integrating data even more deeply to make it easier to work across borders and time zones. They're expanding their partnerships beyond just an innovation stage to include sales, marketing and even human resources. And they're figuring out how to share control over the parts of innovation, such as funding, that are typically dominated by one partner.
Technology is reinventing the connections with and between employees, customers and partners. The result? Connectivity can't be viewed as some new competitive advantage for a company. It's the status quo.
Silos, top-down control and one-way communication. Those are the hallmarks of the past. Every aspect of today's successful company is increasingly based upon inclusion, collaboration and transparency.
CEOs realize they need to figure out how to navigate this change or get left behind. And that's why, these days, technology is the biggest issue on their radar.