Insights from the Global Chief Executive Officer (CEO) Study, by IBM

Previously, CEO’s recognised the need for business model innovation, but today they are struggling to find the requisite creative leadership to produce such innovation. In the past, they told us they needed to be closer to customers; today they need to go much further and bring customers inside their organisations.

In addition to this, while global integration is not a brand new goal, CEO’s are realising they must take it a step further and think in terms of increasing overall operating dexterity.

One CEO referred to the economic environment of 2009 as ‘a wake up call’ and the general theme was that they operate in a world that is substantially more volatile, uncertain and complex then ever before. Many shared the view that incremental changes are no longer sufficient in a world that is operating in fundamentally different ways.

Decisions must still be made and many consider the information explosion to be their greatest opportunity in developing deep customer insights. Decisions need to be even more considered than previously, because as we have become more interconnected, the consequences of any decision can ripple with unprecedented speed across business ecosystems the way the recent economic crisis has impacted nearly every market.

It is no longer sufficient, or even possible, to view the world within the confines of an industry or a discipline or even a nation. Yet the emergence of advanced technologies like business analytics can help uncover previously hidden correlations and patterns and provide greater clarity and certainty when making many business decisions.

Four primary findings arose from the conversations with CEO’s:
1. Today’s complexity is only expected to rise and more than half of CEO’s doubt their ability to manage it. 79% of CEO’s anticipate even greater complexity ahead. However, one set of organisations (we call them ‘Standouts’) has turned increased complexity into financial advantage over the past five years.

2. Creativity is the most important leadership quality, according to CEO’s. Standouts practice and encourage experimentation and innovation throughout their organisations. Creative leaders expect to make deeper business model changes to realise their strategies. To succeed, they take more calculated risks, find new ideas and keep innovating in how they lead and communicate.

3. The most successful organisations co-create products and services with customers, and integrate customers into core processes. They are adopting new channels to engage and stay in tune with customers. By drawing more insight from the available data, successful CEO’s make customer intimacy their number one priority.

4. Better performers manage complexity on behalf of their organisations, customers and partners. They do so by simplifying operations and products, and increasing dexterity to change the way they work, access resources and enter markets around the world. Compared to other CEO’s, dexterous leaders expect 20% more future revenue to come from new sources.

This study is the fourth of its nature by IBM. The findings have been derived from interviews with 1,541 CEO’s, general managers and senior public sector leaders, who represent different sizes of organisations in 60 countries and 33 industries.