April 3, 2017 | Written by: Stephen Marshall
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Two years ago, a new phenomenon was dominating the minds of CxOs all over the world. One executive from the U.S. transportation industry described it succinctly as: “the ‘Uber Syndrome’ — when a competitor with a completely different business model enters your industry and flattens you.” Indeed, many business leaders expressed the same fear, that new rivals from outside their industry could easily turn their companies into road kill.
But today, the sentiment is moving in the opposite direction. Despite traditional industry boundaries continuing to erode in the face of digital disruption, CxOs are now saying that future competition is more likely to come from within their own industry.
Business trends are changing constantly, and executives need to remain well informed, well prepared and extremely agile. The shift in CxOs’ perspectives on the competitive environment is the first major change we spotted as we compared new data to the previous Global C-suite Study conducted by the IBM Institute for Business Value in 2015.
Back then CxOs saw a need to prioritize the development of new markets and territories instead of trying to grow existing ones. And, they were looking to external partners for sources of innovation rather than their own internal capabilities.
By contrast, it seems that today’s CxOs are starting to get a grip on the threat of industry convergence. According to our early data, which includes input from about 1,880 executives around the globe, CxOs are moving away from knee-jerk reactions toward more methodical, considered approaches. They are carefully defining their go-to-market strategies while reassessing with whom they go to market. Instead of turning all of their attention to new, unproven markets in the search for growth, they’re looking to find a more even balance.
In what might be viewed as an encouraging sign for research and development investment, executives are telling us that they expect more innovation to come from within their businesses in the near future. It remains to be seen whether this shift in CxOs’ mindsets is driven by internal financial and operational constraints, or reflects external factors such as increasing geopolitical uncertainty, the elimination of free-trade agreements or a tightening in the regulatory environment.
Why are we seeing such dramatic reversals of opinion in such a short time? Was the threat from digital invaders overblown, or was it just a matter of time before industry incumbents began to reassert themselves?
The IBV Global C-suite Study program will continue to explore business leaders’ response to change and, throughout 2017, we will highlight interesting and sometimes unexpected insights.