2012 IBM CEO Study

The 2012 IBM CEO Study is now available: IBM CEO Study -2012.  This study provides further evidence that the world is shifting to what Geoffrey Moore has termed “Systems of Engagement”. This quote from the report would indicate that CEOs see the writing on the wall: 

“The view that technology is primarily a driver of efficiency is outdated; CEOs now see technology as an enabler of collaboration and relationships — those essential connections that fuel creativity and innovation. Simply put, technology is reinventing connections with — and among — employees, customers and partners.” 

This study underscores my long time premise that collaboration and analytic excellence is required to be successful in this new systems of engagement era. Those that think this is just another cycle or a passing fad are greatly mistaken. We are at a unique point in history – driven by a perfect storm of innovation as highlighted by this quote: 

“Today’s CEOs are in a position few of their predecessors have faced. Although there have been many eras of technology disruption in the past, several factors make this period different. First, a number of new technologies are rippling through society at the same time, and they’re being adopted much faster. In addition, disruptive technologies of previous eras almost always originated in business or government, and then spread to consumers. But recent advances are flowing in the reverse direction and are being absorbed more rapidly by the younger generation.” 

The study identifies three key tenets of the new CEO agenda:

• Empowering employees through values. Companies must inspire collaboration on a massive scale. The digital employee will collaborate both internally and externally. They will be enabled by social technology and informed through analytics. The open culture required for success will drive companies to align employee and company values in a way that encourages value-driven decision making – not control-driven.
• Engaging customers as individuals. This finding furthers the notion that context is king. Personalization will require a company to tap into insight about customers that extend beyond their four walls. Interactions with customers will increasingly be informed interactions, and this will place a premium on analytic excellence. The report states that after more than a decade of talking about “markets of one” and “mass customization,” the means are finally catching up with the rhetoric. The report also highlights a key finding that I hear consistently in my discussion with customers – the enterprise is not ready for this level of analytic excellence.
• Amplifying innovation with partnerships. To enable sustained innovation, companies will increasingly leverage a broader ecosystem of partners. Partner relationships must be integrated through the use of collaborative environments that bring partners deeper into company processes. Companies must have the agility required to onboard new value-added partners quickly. 

These tenets support the movement towards The Digital Enterprise and I believe Geoffrey Moore’s vision for Systems of Engagement represents the manifestation of this new enterprise. I believe this study supports the notion that competitive advantage is enabled by collaboration and analytic excellence, and highlights the characteristics of The Digital Enterprise represented in prior Blog posts: 

• Sustained innovation
• Engagement and insight-driven
• Mobile first
• Context-aware
• Business Technology NOT Information Technology
• Relationship-based
• Flexibility in operating and business models
• Experiential versus transactional
• Prescriptive

One of the survey questions provides a very telling look into the catalyst for accelerating disruption: Technology is now driving more organizational change than any other force — even the economy. When asked where they felt technology would impact their organizations the most, CEOs felt an overwhelming focus on changes in how people engage with the organization and with each other. They see technology creating new ways of connecting innovators across a broad ecosystem.

The impact cannot be understated, as this dynamic will alter organizational composition, structure and span of control. The report states that traditional hierarchies must be blown up. I’ve said for some time that new organization structures are coming – and I don’t think companies grasp the magnitude of the change that lies ahead. A very good question posed in the report: “How do I run an open organization?” 

Some other key messages from the report:

• Collaboration is the number-one trait CEOs are seeking in their employees, with 75 percent of CEOs calling it critical.
• To engage customers as individuals, CEOs are building analytical muscle to respond with relevance and immediacy. More than 70 percent of CEOs are seeking a better understanding of individual customer needs and improved responsiveness.
• Over half expect social channels to be a primary way of engaging customers within five years.
• Extensive partnering is providing the edge CEOs need to take on radical innovation. More than half of all CEOs are partnering extensively to drive innovation.
• Instead of settling for simply creating new products or implementing more efficient operations, they’re more likely to be moving into other industries or even inventing entirely new ones.
• By empowering employees to act on their own ideas, CEOs are building employee accountability, initiative and loyalty. And by equipping employees to work in an open environment, they are arming the people who represent their brands to the world.
• Across industries and geographies, CEOs consistently highlight four personal characteristics most critical for employees’ future success: being collaborative, communicative, creative and flexible
• The traditional approach to understanding customers better has been to consolidate and analyze transactions and activities from across the entire organization. But to remain relevant, organizations have to go much further. They must piece together a more holistic view of the customer based on how he or she engages the rest of the world, not just their organizations.
• CEOs are also contemplating different management systems and organizational structures. “In a rapidly changing environment, we must foster free communication and eliminate layers to maintain speed.”
• Currently, social media is the least utilized of all customer interaction methods. However, CEOs predict it will push past websites, call centers and channel partners, and become the number-two way to engage customers within the next five years

Those who have seen my presentation on The Digital Enterprise know that I believe there is a fine line between innovation and chaos, and believe we are entering a period of chaos. The report seems to support this notion in the following statement: “CEOs see greater organizational openness ahead. But as rules are refined and collaboration explodes, how will they avoid chaos, protect the business and deliver results?” In effect, how do we manage two polar opposites: openness and control? The report states that tight control will give way to more openness, putting an emphasis on organizational values. It suggests that in order to avoid chaos, employees must internalize an organizations values and mission. 

Bottom line: The ecosystem is being rewired, as technology reinvents connections with and among employees, customers and partners. The train is leaving the station – are you on?