IBM’s 2008 CEO Study revealed some surprising and not so surprising insights into the goings on in the minds of CEOs. Its quite an impressive study : 40 countries, 32 different industries with 19% of the companies with more than 50,000 employees and 22% with less than 1000 employees. It involved 1130 CEOs and public sector leaders. It is a study with sufficient breadth and width.
The not so surprising finding is that the CEOs are all in unison in voicing the need for their organization to successfully undergo effective change. The surprising finding though is that 75% of the CEOs admitted that their organizations’ approach to change is on a ad hoc basis! There is more, 8 out of 10 CEOs said that they are expecting their organization to undergo substantial change in the next 3 years. Two-thirds are implementing extensive innovations to their business models. More than half of the CEO sample said they plan to drastically change their organizations’ capabilities, knowledge and assets with 71% planning to collaborate with others to get some of their operational work done (read outsource).
The CEOs have also identified 3 factors that they deem will provide the greatest impact to their bottom-line : Market factors (48%), people skills (48%) and technology (35%).
Finally (these are only some of the findings, there are more actually) 66% of the CEOs plan to use M&A as their expansion and global integration strategies.
The study have also identified the kind of enterprises that can survive the future. These enterprises with the following characteristics:
1. They are hungry for change
2. They are innovative beyond customer imagination
3. They are globally integrated
4. They are disruptive in nature
5. They are more than just generous; they are genuine.
Basically, the successful enterprises of the future will those which are continuously changing and looking for opportunities to change the way they do business and the products and services they offer. These continuous change is also reflected in the way they interact with customers and how they keep delighting customers with innovative services and customer experiences.
The successful enterprise of the future will also be globally integrated because more and more of them will have a global footprint. This global footprint will not stop them from being nimble in changing and adapting to local and regional needs. In fact they will disrupt their competitor and their industry by continuously changing the way the game is played.
The successful enterprise of the future will do all the above while maintaining a sense and purpose of genuine ownership of the environment in which they function in and the people whom they serve and also for those who work for them.
And, Guess what? This IBM study also set out to understand the differences in response between those CEOs whose organizations are out performing their rivals financially and those who are under performing financially. The verdict : The former is braver, more nimble, more change welcoming and more daring in changing the status quo!
In summary, the major findings of the study can be listed as below ( I am taking the following verbatim from the report) :
1. Organizations are bombarded by change, and many are struggling
to keep up.
2. CEO s view more demanding customers not as a threat, but as an
opportunity to differentiate.
3. Nearly all CEO s are adapting their business models — two-thirds are
implementing extensive innovations.
4. CEO s are moving aggressively toward global business designs,
deeply changing capabilities and partnering more extensively.
5. Financial out performers are making bolder plays.
NOTE : Some quotable quotes from the study :
1. The consumer’s concept of quality will no longer be measured by only the physical attributes of a product — it will extend to the process of how the product is made, including product safety, environmental compliance and social responsibility compliance.”
Victor Fung, Chairman, Li & Fung
2. “ Simply put, we want significant share in markets growing faster than others, which for us is more than
25 percent.”
Ron Logue, Chairman and CEO, State Street
3. “ We have seen more change in the last ten years than in the previous 90.”
Ad J. Scheepbouwer, CEO,KPN Telecom
4. “The key to successful transformation is changing our mind-set. For large companies, it is easy to be
complacent — we have to change this. Our company culture must have a built-in change mechanism.”
Masao Yamazaki, President and CEO, West Japan Railway Company
5. “ In a growing market, strong product functionality is most important to customers. However, in a mature market, we must also appeal to customers’ feelings and emotions. It’s critical to find the ideal balance of both.”
Motoki Ozaki, President and CEO, Kao Corporation
6. “ We must redefine our value proposition to customers.
Information and advisory content are becoming even more valuable than traditional drivers.”
H. Edward Hanway, Chairman
and CEO, CIGNA Corporation
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