Disrupt or be Disrupted

Over the course of 2015, Farland Group has conducted hundreds of qualitative interviews with CMOs, CIOs and CEOs who are members of various advisory groups and engagement programs that we facilitate at major corporations. Across all of these interviews, regardless of country, organization, industry or profession, one theme has come through strongly and consistently: an obsession with disruption.   As one CEO said, “It used to be that I would say to my team: lead, follow or get out of the way. Now I just say: lead or be disrupted. It is really that simple for all of us. In this game, following isn’t an option.”

The newly released 2015 IBM C-suite study, which surveyed 5,000+ C-suite leaders from 21 industries and 70 countries, emphasizes this focus the C-suite has on disruption and shares some very practical approaches for how CXOs are progressing change. A few of the themes in the study that resonated with what we are hearing and seeing when we talk with C-level executives. Below is a summary of key themes that relate to and reinforce the findings in IBM’s newest study.

Redrawing the rules of engagement

For some time, CMOs have struggled to find ways to understand each customer as an individual and to deliver an experience that capitalizes on that knowledge. Today, the individual engagement goal is within reach, and CMOs are taking that understanding to a new level by applying predictive approaches. “Disruption is taking place from everywhere in the value chain,” pointed out one CMO that we interviewed this year. “The underlying asset is data. The company that figures out how to integrate content and context in real-time will create a new playing field.”

Most C-suite executives we speak with agree that data is the foundation of the new playing field, but several advanced CXOs are looking at the role of learning machines or what IBM calls cognitive computing. One Chief Data Officer told us that he saw cognitive systems as the only way to build an integrated, interactive and predictive approach to customer engagement. We can start with traditional analytics but the future is about real time and cognitive. Traditional analytics uses historical data to predict the future,” he said. “Cognitive based systems are real time interactive, intelligent systems. Cognitive brings the right level of intelligence to help customize every part of the dialogue with a customer. It is the information used in response to an experience in real time.”

Leaders cannot go it alone

When companies like IBM and Twitter, and Cisco and Ericsson, are partnering to compete, it is clear that the rules of innovation, collaboration and competition have forever changed. The IBM C-suite study points out that more than half of all CXOs surveyed are looking for innovation from outside sources to help them mount an effective counter-attack to competitors. And they plan to partner more than they have in the past to access that innovation.

While it is true that most CXOs recognize this requirement, our discussions indicate that few are able now to capitalize upon this need in a meaningful way for their businesses. In some cases there is a lack of experience in developing partnerships that will result in advanced innovation, but more often CXOs are uncertain about where to begin. “I can see establishing relationships with very different companies than we have worked with in the past is a requirement for us to access new business models, but we really don’t know how to get started,” A CIO told us. This executive brought a sharper point when he underscored the need to operate in a totally new way. “We are trying to build our ecosystem using the old rules… These cannot be driven through legal or procurement… partnerships with new and startup companies must be done with an agile approach and I fear our company isn’t ready for that.” Those that figure out how to execute sooner rather than later, like this CIO, will win the day.

Customers are future value creators

Many companies today engage their customers in co-creation labs, customer experience journeys, and customer advisory boards. But we see that for many others, customers remain an untapped resource for innovation and evolution, and often very eager to be asked to help. As Zhu Bin, CEO of GuangDong Create Environment & Technology Company, China said in the IBM C-suite Study, “In the future, our customers will create greater value for us. They not only generate income for us, they can also help us evolve.”

“Customers bring a different lens to the questions that are challenging us – they are faster at identifying new trends and because they understand our business we tend to listen to them more readily,” stated a CMO from a large financial services institution. In a time of great change and in a digital-first, mobile-first environment that requires immediacy, the C-suite is clear that every individual, organization and entity that can help them advance should be engaged and brought into the solution.

The rules have changed for businesses, and the C-suite – perhaps more than anywhere else in the enterprise – is feeling this change and along with it the need for speed to respond and gain advantage. Speed in fact may be the new currency for the C-suite. As one executive told us, “Speed is the new metric. This is a world where we have to be satisfied with good enough… no one pays for perfection anymore – we don’t have time. Get it out there and fix it as you go is the new mode of operating.” With speed set as the milestone, the question for large enterprise CXOs is how to move fast enough without losing sight of the ankle biters and disruptors that may be in their blind spot, ready to seize advantage from a lull in attention.

The CXOs we talk to agree with IBM’s most current research about the urgency to take action, and the need for radical change, and recognize that they are in a race against the leaders to disrupt…or be disrupted. The challenge is in doing it now and doing it well.

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