43 percent of CEOs include customers in the development of business strategies, reveals IBM study

by Srikanth RP, InformationWeek, October 7, 2013

IBM recently conducted its in-person analysis with more than 4,000 C-suite leaders by using a global team of business strategists, consultants, data scientists and statisticians. The IBM C-Suite study 2013, reveals how CEOs are opening up to customer influence, fusing the digital with the physical and crafting superior customer experience. Jeby Cherian, Vice President & Managing Partner, Global Business Services, IBM India & South Asia shares more details about the study

Please share some insights from IBM’s C-Suite Study?

According  to  our Global C-Suite Study 2013, the largest of its kind ever, and  tenth  in  series,  conducted by the IBM Institute for Business Value, based  on face-to-face conversations with over 4,000 C-Suite Leaders across 70  countries and 20 industries, CEOs are opening up to customer influence, fusing  the  digital  with  the  physical  and  crafting  superior customer experience.  These  predominant  themes  are  merging to create competitive advantages  for  early  adopters  of  what  we  call the Customer Activated Enterprise  with customers being “new” business advisors. The study reveals that  three  out  of  five  C-suite  leaders look to direct, meaningful and fundamentally  different  view  customers engagement to drive their agendas and  90  percent  of  senior  leaders  expect  extensive collaboration with customers within the next five years.

What change in mindset do organizations need to succeed in this new era?

It’s all about open collaboration and delivering   superior experience.  At  the  core  of  this  lies  a  deep understanding  and focus on the customer as an individual, rather than as a category or a market segment. This is much more than customer centricity and requires a change in mindset, culture to operations that dwells on high level reciprocity and commitment. This goes beyond being trusted partners and being “essential.”

Increasingly, leaders are viewing customers as key stakeholders  in  determining their future and embracing a more dynamic and collaborative  model  of working. Today, while about 43 percent of the CEOs include customers in the development of business strategies, this number is expected to reach 60 percent in the next 3 to 5 years. In search of innovation  and  transparency,  over  half  the  C-suite executives plan to embrace  open,  collaborative  models  beyond  their company’s borders with customers,  and actively engaging customers, - beyond products and services – up to assisting in the development of corporate business strategy.

 Any major business shifts leaders are witnessing?
One of the key shifts leaders  are witnessing is that the intersection between the digital and physical world is fast becoming the leading edge of innovation.  Leaders  are  realizing how important it is to blend these two worlds,   to   win   and  succeed  in  the  new  normal.  While successful organizations are fusing the digital with the physical to transform their organizations, only 36 percent of enterprises have an integrated  strategy in  place.  The good news is large number of C-Suite leaders intend to use
digital channels  more extensively to engage with customers in the future, and they’ve already embraced the shift.

 What role does collaboration play in this new connected era?
Our research  shows  strong correlation between companies that succeed and
their   levels  of  external  collaboration.  54  percent  leaders  believe customers  must  be  understood  and  engaged  as  individuals  rather than categories  or market segments. 76 percent of CXOs hope to understand their customers  much  better  in  the  future.  Some organizations are literally pulling  customers  into  their boardrooms to drive stronger collaboration. Customer  Advisory  boards  are  gaining  popularity  as a means to involve customers  set strategic direction, share best practices, better understand market  segments  and fine tune business models. Increasingly, these boards serve  as  an  instrumental  vehicle  to  provide  direct  input across the
customer  lifecycle,  from defining the customer opportunity to influencing
go-to-market  plans.  To forge customer intimacy, businesses are relying on
digital  technologies  to  boost engagement, create dialogues and provide a
superior experience.

What is the biggest stumbling block for C-suite leaders?
According to  the research, the biggest stumbling block for C-suite leaders is Big  Data  and  social media.  Research indicates there’s a struggle in how  to  strike  the  right  balance among the social, digital and physical worlds.  Lack of a cohesive social media plan and competing initiatives are the two biggest barriers preventing CMOs from implementing their strategies in  an  increasingly  connected  world.  Both  CMOs  and  CIOs overwhelming indicate  that  they  intend to make great strides to overhaul and reinvent the  way they work with their customers. Significantly, 83 percent say they
plan  to  digitize their front office within 3-5 years to better align with their  customers.  C-suites  intend  to  use  digital  channels  much  more extensively  to  engage  with customers in the future – and they’ve already embraced the shift.

Any interesting findings the study reveal about CEOs?
The speed  at  which CEOs are opening the doors to enable collaboration is
extraordinary.  A  significant  number  have  taken  steps  to  make  their
enterprises  more  transparent  in  the  past 12 months. And more than half
claim customers now have a major influence on their organizations. That
influence goes far beyond a say in developing new products and services;
its input into the strategy of the business. Yet a full third of CEOs worry
that the rest of their C-suite is out of touch with customers. CEOs heading
outperforming enterprises are less anxious on this score, but it’s still a
source  of concern to 23 percent. What we discovered underlines how rapidly
change is sweeping across business and society as C-Suite leaders transform
their   organization   resolving  some  of  the  old  challenges  with  new
technologies and new possibilities in the world of data, beginning entirely
new relationship with their customers.

About Author

Srikanth RP

Executive Editor

An award-winning journalist with more than 14 years of experience, Srikanth RP is Executive Editor with InformationWeek India. Srikanth is passionate about writing on topics which clearly show the business impact of technology.

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