The 3 focus areas of outperforming CEOS to help ensure success in 2021
IBV reports learnings from over 3,000 CEOs
While 2020 was filled with disruption, the year also pushed chief executives worldwide to accelerate their digital transformation and reflect on their current strategies. How can they not only ensure growth, but also continue to deliver value for clients in such a chaotic time?
A new IBM Institute of Business Value (IBV) report, spanning 49 countries and 28 industries, shows what 3,000 global CEOs learned in 2020 and how they adapted. The results also provide key insights into where the outperformers—who continue to thrive despite the disruption—are focusing to ensure future success.
With so much digital transformation, what does the future hold?
According the report, the rising scrutiny around privacy, data, trade and public health—combined with the accelerated pace of digital transformation—made technology and regulation the top two external forces predicted to affect business in the years ahead. To navigate these factors, results indicate that outperformers are differentiating themselves in three key areas:
1. Building flexible and scalable technology foundation
From using technology to enable a remote workforce to improving the availability of ecommerce systems, 60% of c-suite executives reported accelerating digital transformation during the pandemic. Compared to underperformers, surveyed outperforming CEOs identified tech infrastructure as a top challenge at a 2-1 rate.
But with the right foundation in place, organizations set the foundation for success. In 2020, the more tech-savvy organizations outperformed their less tech-savvy peers on revenue growth by an average of 6 percentage points, across 12 industries. As a result of such rapid transformation, many see a flexible and scalable technology foundation as essential to success. Surveyed CEOs anticipate cloud computing, AI and IoT as top technologies that will make critical business processes more intelligent and responsive.
When thinking about what c-suite members will play a crucial role over the next two to three years, surveyed CEOs named their tech chiefs, such as CIOs and CTOs at more than twice the rate of chief marketing officers, chief human resources officers or any other position excluding CFO and COO.
2.Betting on their existing workforce
Despite constant disruption, the report indicated that CEOs are looking for and investing in a truly sustainable workforce that thrives in a hybrid cloud environment. 77% of outperforming CEOs report they will prioritize employee well-being even if it affects short-term business results, compared to 39% of underperformers.
Recognizing that talent is a company’s greatest competitive advantage, there is a more intense focus on supporting not only employee well-being, but also engagement and empowerment. 61% of surveyed CEOs named empowering a remote workforce their most critical challenge in 2020, which ranked higher than all other challenges. To improve engagement, outperforming CEOs identify a sense of purpose as mission-critical for employee engagement at a rate 53% higher than underperformers.
Outperforming CEOs are also focused on building an environment where people feel comfortable bringing their full selves to work. Ongoing IBV research shows that employee expectations have permanently shifted. Organizations now have deeper transparency into the daily juggle of work, childcare needs and other personal stresses. Employees expect organizations to not only provide the training needed to succeed in new ways of working, but also support their physical and emotional health.
3. Partnering to win with open innovation
According to the report, top leaders are providing their organizations greater access to ideas, talent and opportunity. Nearly two-thirds of outperformers stated partnerships have become more important for driving business performance. Only about half as many underperformers said the same.
By 2022, this survey indicates that participation in business ecosystem and partner networks inside and outside their industry will grow by more than 300% compared to two years ago. Looking ahead, CEOs find it essential to rely on an open innovation approach that offers partnerships and ecosystems access to broader ideas, talent and opportunity.
But operations-focused and customer-focused outperforming CEOs have differing opinions on their keys to success. When identifying ways to build trust with customers and meet expectations, operations-focused outperformers rank partnerships at #1 on their list among eight choices. Customer-focused outperformers also cite platforms and partnerships as among the factors most responsible for their performance.