© 2012 IBM Corporation
IBM Institute for Business Value
Revenue growth is the #1 priority
Responsiveness is key competence
Improving internal capabilities as first step to growth
Revenue growth is the #1 priority
Responsiveness is key competence
Improving internal capabilities as first step to growth
Business model innovation matters
External collaboration
Innovation must be orchestrated from the top
Business model innovation matters
External collaboration
Innovation must be orchestrated from the top
Hungry for change Customers as
opportunity to differentiate
Business model innovation, global business designs
Hungry for change Customers as
opportunity to differentiate
Business model innovation, global business designs
Embody creative leadership
Reinvent customer relationships
Build operating dexterity
Embody creative leadership
Reinvent customer relationships
Build operating dexterity
Empowering employees through values
Engaging customers as individuals
Amplifying innovation with partnerships
Empowering employees through values
Engaging customers as individuals
Amplifying innovation with partnerships
2
2004
Your turn
2006Expanding the
Innovation Horizon
2008The Enterpriseof the Future
2010Capitalizing on
Complexity
2012Leading through
Connections
The Global CEO Study 2012 is the fifth biennial CEO study, building on our insights and findings over the last 8 years
765 interviews765 interviews 1130 interviews1130 interviews 1541 interviews1541 interviews456 interviews456 interviews 1709 interviews1709 interviews
© 2012 IBM Corporation
IBM Institute for Business Value
3
Note: The CEO response sample (n=1709) has been weighted based on 2010 Regional GDP of the IMF World Economic Outlook
The study represents organizations in 64 countries across 18 industries
North AmericaWestern EuropeJapan
CommunicationsDistributionFinancial Services
Australia / New ZealandGrowth Markets
IndustrialPublic
Regions Sectors
In this largest known sample, we spoke with over 1700 CEOs –battle-tested leaders with an average tenure of 6 years
© 2012 IBM Corporation
IBM Institute for Business Value
Three performance categoriesThree performance categories
4
Particular attention on OutperformersParticular attention on Outperformers
No significant difference between outperformers and underperformers on 82% of tested characteristics
→ Though outperformers and underperformers often say the same, outperformers are superior at doing what they say
→ In this study we focus on common performance factors, while we highlightthe most significant differences between out- and underperformers
No significant difference between outperformers and underperformers on 82% of tested characteristics
→ Though outperformers and underperformers often say the same, outperformers are superior at doing what they say
→ In this study we focus on common performance factors, while we highlightthe most significant differences between out- and underperformers
Peer PerformersAll other performance combinations
OutperformersHigh revenue growth and high profitability
UnderperformersLow revenue growth and low profitability
We compared outperformer and underperformer responses and have highlighted key differences
Note: Relative performance is defined by CEO self-assessment of revenue growth and profitability compared to industry peersSource: QB “How does the revenue growth of your organization compare to your industry peers over the past 3 years?”; QC “How does your
organization’s profitability (or efficiency for public sector) compare to your industry peers over the past 3 years?”
© 2012 IBM Corporation
IBM Institute for Business Value
7
Organizational openness introduces new opportunities to create value through
employee collaboration
Organizational openness introduces new opportunities to create value through
employee collaboration
Customers reveal insights into what, when and how they want to interact
Customers reveal insights into what, when and how they want to interact
Virtually all organizations now partner, creating new avenues for innovation
Virtually all organizations now partner, creating new avenues for innovation
What we learned from all CEOsWhat we learned from all CEOs What outperformers do differentlyWhat outperformers do differently
Technology has become the most important external force for CEOs and significantly impacts how they build economic value
Outperformers embrace greater openness, and excel at executing
tough change
Outperformers embrace greater openness, and excel at executing
tough change
Outperformers strongly differentiate through better data access, insight and
translation into actions
Outperformers strongly differentiate through better data access, insight and
translation into actions
Outperformers are more likelyto partner for innovation, disrupt, and
derive revenue from new sources
Outperformers are more likelyto partner for innovation, disrupt, and
derive revenue from new sources
© 2012 IBM Corporation
IBM Institute for Business Value
8
Key Discovery
Source: Q1 “What are the most important external forces that will impact your organization over the next 3 to 5 years?”
External forces that will impact the organization
68%
69%
71%
2004 2006 2008 2010 2012
Technology factorsTechnology factors
People skills
Market factors
Macro-economic factors
Regulatory concerns
Globalization
Socio-economic factors
Environmental issues
Geopolitical factors
For the first time, CEOs identify technology as the most important external force impacting their organizations
© 2012 IBM Corporation
IBM Institute for Business Value
9
Source: Q24 “What do you see as the key sources of sustained economic value in your organization?”
Key sources of sustained economic value
Human capital
Customer relationships
Products / services innovation
Brand(s)
Business model innovation
Technology
Partnership networks
Data access / data-driven insights
R&D, intellectual property
Price / revenue innovation
Assets (physical, infrastructure)
Corporate social responsibility
Access to raw materials
71%71%
Key Discovery
Internally, CEOs focus on how technology facilitates primary sources of sustained economic value
66%66%
52%52%
43%43%
33%33%
30%30%
28%28%
25%25%
22%22%
19%19%
15%15%
13%13%
8%8%
© 2012 IBM Corporation
IBM Institute for Business Value
10
Source: QE “To what extent has your organization integrated business and technology to innovate?”
Integrating business and technology for innovation
41%
Outperformers
Underperformers
69%69%
6868%more
Outperforming organizations are especially focused on combining technology with the business to drive innovation and growth
Outperformance drivers
© 2012 IBM Corporation
IBM Institute for Business Value
11
CEOs create more economic value by cultivating new connections within and across three domains
© 2012 IBM Corporation
IBM Institute for Business Value
12
Organizational openness introduces new opportunities to create value
through collaboration
Organizational openness introduces new opportunities to create value
through collaboration
How will CEOs create more economic value by empowering employees through values?
To re-balance control with openness, CEOs are focused on values,
collaboration and mission
To re-balance control with openness, CEOs are focused on values,
collaboration and mission
Outperformers embrace greater openness, and excel at executing
tough change
Outperformers embrace greater openness, and excel at executing
tough change
© 2012 IBM Corporation
IBM Institute for Business Value
13
Source: Q4 “To what extent will the following competing influences impact your organization?”; CEO average is 33% on control, 23% balanced, and 44% on openness
Organizational impact from competing influences
35%
17%
Operational controlTight operational and financial control to ensure compliance, avoid waste, and enforce standards, norms and behaviors
Organizational opennessOpening of organizations internally and externally and empowerment of individuals to facilitate innovation, collaboration, and creativity
Balance between openness and control
Key Discovery
The challenge CEOs face is how to balance operational control with organizational openness to capture benefits from collaboration
48%37%
30%33%
Outperformers
Underperformers
© 2012 IBM Corporation
IBM Institute for Business Value
CFOs report that pressure remains high to control costs and increase efficiency
14
Source: IBM Institute for Business Value, The Global CFO Study 2010. Question asked: “In the next 3 years, how will the following conditions change in your industry / sector?”
Pressure to reduce cost base
Need for faster decision making
Demand for external transparency
Product / service demand growth
Ability to attract and retain talent
Access to short-term liquidity / long-term capital
78%78%
74%74%
69%69%
61%61%
56%56%
40%40%
Operational control provides value to organizations, including cost reduction, operating margin and security
© 2012 IBM Corporation
IBM Institute for Business Value
15
Changing the organization
Partnering/collaborating with other organizations
Internal collaboration
Decision-making processes
C-suite composition, skills and responsibilities
Management and/or organization structure
Governance models
Values of your organization
Supervisory board composition
53%53%
52%52%
43%43%
41%41%
40%40%
31%31%
18%18%
However, CEOs plan dramatic improvements in internal and external collaboration, requiring organizational openness
Source: Q19 “To what extent will you sustain or make changes to the following aspects of your organization over the next 3 to 5 years?”
15%15%
© 2012 IBM Corporation
IBM Institute for Business Value
16
Source: Q18 “What are the most important organizational attributes to engage employees?”
Organizational attributes to engage employees
Ethics and values
Collaborative environment
Purpose and mission
Ability to innovate
Industry leadership
Stability of the organization
Work-life balance
Personal autonomy
Financial rewards
Work flexibility
Cultural diversity
Customizable compensation
Comprehensive mentoring
65%65%
Key Discovery
To re-balance control with openness, CEOs are focused on values, collaboration and mission
63%63%
58%58%
51%51%
40%40%
37%37%
35%35%
31%31%
31%31%
24%24%
21%21%
18%18%
18%18%
© 2012 IBM Corporation
IBM Institute for Business Value
17
Source: Q17 “What are key personal characteristics that help employees to be more successful in a connected economy?”
Personal characteristics for employee success
Creative
Flexible
Collaborative
Communicative
Opportunity seeking
Analytical / quantitative
Technology-savvy
Globally-oriented
Assertive
Disruptive
75%75%
67%67%
61%61%
61%61%
54%54%
50%50%
41%41%
41%41%
25%25%
16%16%
Key Discovery
In this new environment, key success factors for employees include: collaboration, communication, creativity and flexibility
© 2012 IBM Corporation
IBM Institute for Business Value
18
Ability to manage change
Outperformance drivers
40%
69%69%
7373%more
Outperformers
Underperformers
Outperformers excel at executing tough change
Source: Q3 “How successful has your organization been at managing change in the past?”; average ability to manage change is 54%
© 2012 IBM Corporation
IBM Institute for Business Value
19
So, how do you empower employees through openness?
Confront cultural reality Build values employees will live out Recalibrate controls
Confront cultural reality Build values employees will live out Recalibrate controls
Create unconventional teams Concentrate on experiential learning Empower high-value employee networks
Create unconventional teams Concentrate on experiential learning Empower high-value employee networks
Pursue social collaboration technologies Devise incentives that foster collaboration Re-imagine employee “suggestion box”
Pursue social collaboration technologies Devise incentives that foster collaboration Re-imagine employee “suggestion box”
1. Replace rulebooks with shared beliefs
1. Replace rulebooks with shared beliefs
2. Build future-proof employees
2. Build future-proof employees
3. Provide the means to collaborate at scale
3. Provide the means to collaborate at scale
© 2012 IBM Corporation
IBM Institute for Business Value
CEO cannot manage openness through process alone. In an open environment, employees must instinctively know how to handle unexpected situations – choices and actions are best guided by shared beliefs and values
Confront cultural realityTake a hard look at your corporate character – not the reputation you intend to project, but what is actually revealed through the decisions and actions of employees and leaders
Build values employees will live outAllow the organization to collectively compose its core values – to develop a shared belief system, employees must help create it
Recalibrate controlsKey is determining which rules to keep and refine – seek to eliminate those that can be “controlled” through values
20
Purpose Build and align common values
to promote performance with integrity
Create ambassadors among employees
Activities Articulated core beliefs and
expected behaviors
Enabled employee dialog across intranet
Promoted social polling and twitter-like platform
Replace rulebooks with shared beliefs
Industrial products business, Europe
© 2012 IBM Corporation
IBM Institute for Business Value
Organizations need employees who are equipped to adapt – those who are collaborative, communicative, creative and flexible
Create unconventional teamsIntentionally mix specialties and expertise so that employees rub shoulders with diverse types of people who think differently and have different backgrounds
Concentrate on experiential learningBroaden the range of situations and experiences that employees are exposed to in their normal work – incorporate external influences, like customers and partners, wherever possible
Empower high-value employee networksEncourage employees to develop a diverse and extensive network of contacts – don’t underestimate the value of their social networks as both potential collaborators and prospective customers
21
Purpose Identify and leverage synergies
across lines of business
Expand value created from innovation
Activities Formed cross line-of-business
knowledge community
Engaged external partners to help identify synergies
Initiated training to promote collaboration and innovation
Build future-proof employees
Consumer products business, Europe
© 2012 IBM Corporation
IBM Institute for Business Value
As organizations globalize and the boundaries between functions blur, organizations need more extensive, sophisticated methods of collaborating
Pursue social collaboration technologiesEnsure employees can quickly find needed expertise and can engage the collective intelligence of the organization – capture experts’ knowledge in searchable repositories
Devise incentives that foster collaborationBe sure employees are clear on how collaboration benefits them individually – intrinsic motivators are visibility and reputation, competitive spirit and shared goals
Re-imagine the employee “suggestion box” Use social media technologies to pursue good ideas – through open dialog, collective construction of solutions and feedback on results
22
Purpose Promote sustained growth
through empowerment, responsibility and trust
Build skills and become part of local communities
Activities Introduced social media including
comment spaces, blogs and an idea network
Integrated enhanced podcasts with two-way interactions
Pursued community out-reach
Provide the means to collaborate at scale
Consumer products business, USA
© 2012 IBM Corporation
IBM Institute for Business Value
For over 150 years, Bausch + Lomb is an eye-health pioneer, active in over 100 countries.
Recently B+L initiated a major cultural transformation to reinvigorate and refocus its innovative spirit:
Social and mobile technologies facilitate communication and sharing of best practices among employees:
In 2011, revenues hit an all-time company high, quadrupling the average annual growth rate.
23
Case Study: Bausch + Lomb – One team focused on one mission
Providing direction through a clearly defined vision, mission and strategy Introducing “High Performance Behaviors” Inverting the classic management pyramid through an increased focus on
front-line managers
Let people communicate at work like they do at home, through internal social platforms
Get information to and from the field as quickly as possible, through early adoption of handheld tablets for customer-facing employees
© 2012 IBM Corporation
IBM Institute for Business Value
24
Customers share insights into what they value individually, and when and how
they want to interact
Customers share insights into what they value individually, and when and how
they want to interact
How will CEOs create more economic value by engaging customers as individuals?
To connect individually, CEOs plan a step change in social media interaction
and continuing face-to-face engagement
To connect individually, CEOs plan a step change in social media interaction
and continuing face-to-face engagement
Outperformers strongly differentiate by better data access, insight, and translation into actions
Outperformers strongly differentiate by better data access, insight, and translation into actions
© 2012 IBM Corporation
IBM Institute for Business Value
Customers will share information if they perceive a benefit
25
Source: IBV Retail 2012 Winning Over the Empowered Consumer Study P04 “What is your willingness to provide information for each of the following items if [pipe primary retailer] provided something relevant to you in exchange?”
Media usage (e.g. media channels)
Demographic (e.g. age, ethnicity)
Identification (name, address)
Lifestyle (# of cars, home ownership)
Location based
Medical
Completely disagreeNeutralCompletely willing
What is your willingness to provide information in exchange for something relevant to you (non-monetary)?
Customers share insights into what they value individually, and when and how they want to interact
Financial
© 2012 IBM Corporation
IBM Institute for Business Value
26
Drawing insight from information – Areas of improvement
Source: Q23 “In which areas do you plan to improve your ability to draw meaningful and executable insights from available information?”
Customers
Operations
Sales
Markets and competitors
Human resources
Supply chain
Risk management
Financials
73%73%
50%50%
49%49%
44%44%
43%43%
40%40%
38%38%
32%32%
CEOs identify customer insights as the most critical investment area
© 2012 IBM Corporation
IBM Institute for Business Value
27
Change required to meet customer expectations (3 to 5 years)
Source: Q9 “To what extent will your organization change to meet customer expectations compared to your industry peers over the next 3 to 5 years?”
Improve understanding of individual customer needs
Improve response time to market needs
Harmonize customer experiences across channels
Include customers / citizens across product / service life cycle
Increase transparency and corporate accountability
Increase social and environmental responsibility
72%72%
72%72%
CEOs want to understand individual customers better and respond faster
55%55%
48%48%
47%47%
44%44%
Key Discovery
© 2012 IBM Corporation
IBM Institute for Business Value
28
Source: Q8 “What are the three most important mechanisms your organization will use with customers over the next 3 to 5 years?”*Face-to-face / sales force / institutional representatives
80%
67%
40%
31%
39%
15%
22%22%
41%38%
16%
57%
47%
55%
Face-to-face* Callcenters
Traditionalmedia
Advisory groups
Channelpartners
WebsitesSocialmedia
Mechanisms to engage customers
Key Discovery
Today
In 3 to 5 years
To connect individually, CEOs plan a step-change from traditional to social media, while continuing face-to-face engagement
© 2012 IBM Corporation
IBM Institute for Business Value
29
Source: Q22 “How good is your organization at driving value from data? [Today]”
Outperformers strongly differentiate their organizations in three key areas
Outperformance drivers
26%
54%54%
108108%more
Access to data
Outperformers
Underperformers
31%
57%57%
8484%more
Translate insight into action
26%
54%54%
108108%more
Draw insights from data
Outperformers are twice as good at deriving value from data – key to engaging customers as individuals
© 2012 IBM Corporation
IBM Institute for Business Value
1. Let “big data” reveal the customer you never knew
1. Let “big data” reveal the customer you never knew
30
2. Listen lavishly, respond with focus
2. Listen lavishly, respond with focus
3. Be where your customersexpect you to be
3. Be where your customersexpect you to be
So, how do you win the race to gather andconvert data into customer insight and action?
Look outside to complete the view Connect pieces into profiles Empower staff with predictive analysis
Look outside to complete the view Connect pieces into profiles Empower staff with predictive analysis
Listen at an individual level Capture what employees see and hear Respond with relevance and speed
Listen at an individual level Capture what employees see and hear Respond with relevance and speed
Leverage the fact that mobile “changes everything”
Blend the physical and digital worlds Offer value that stands out
Leverage the fact that mobile “changes everything”
Blend the physical and digital worlds Offer value that stands out
© 2012 IBM Corporation
IBM Institute for Business Value
Today’s analytics provide opportunities to explore big data, detect patterns and reveal new insights – knowing how to effectively access, analyze and use data is crucial to understanding and engaging individual customers
Look outside to complete the viewIncorporate external sources, especially social media and complementary data sets from partners – blend internal and external views to discover unexpected insights
Connect pieces into profilesUse analytics to distill what’s valuable from an abundance of data – assemble vital pieces into holistic profiles of individual human beings
Empower staff with predictive analyticsEmbed insights where front-line decisions are made – ensure data-driven decision making is part of everyday processes
31
Purpose Gain deeper insight into agency
performance and customer value drivers
Build “analytical culture” across business units
Activities Identify high-value and high-
potential customers and maximize their lifetime value through customer profiling, micro-segmentation, and analysis
Improve understanding of market potential and competitive forces to help make better decisions
Let “big data” reveal the customer you never knew
Insurance business, USA
© 2012 IBM Corporation
IBM Institute for Business Value
In exchange for more insight, customers want organizations to interact selectively and responsibly – offering what they want, when and where they want it
Listen at an individual levelLook beyond aggregate customer information based on market segmentation – use sources that allow you to hear directly from individual customers
Capture what employees see and hearEstablish easy ways to channel clues employees observe in their customer interactions – incorporate these insights into your analysis
Respond with relevance and speedStudy each customer touch point and find ways to respond more selectively and create deeper connections that build loyalty and advocacy
32
Purpose Increase customer satisfaction
Improve process, workflow effectiveness and time to market
Activities Introduced social network
analysis to help identify key opinion leaders, tailor offerings and understand behavior and decision making
Established real-time analytics to assess new product penetration and success
Listen lavishly, respond with focus
Universal bank, USA
© 2012 IBM Corporation
IBM Institute for Business Value
Mobility is elevating customer expectations: organizations have a tremendous opportunity to create value out of immediacy – to be ready with relevant services and information in the context of the moment
Leverage the fact that mobile “changes everything”Take advantage of location-based services and new forms of e-commerce
Blend the physical and digital worldsExploit augmented reality to make mobile part of integrated, multichannel customer experiences
Offer value that stands outInteract in ways that are attention-grabbing, meaningful and tailored to the individual
33
Purpose Leverage customer insights
obtained from past online interactions to formulate personalized, timely experiences
Activities Used mobile capabilities to
enhance online and in-store customer personalization and overall engagement
Improved customer loyalty by anticipating needs and establishing consistent high- quality customer service
Be where your customers expect you to be
Retail business, USA
© 2012 IBM Corporation
IBM Institute for Business Value
Since 1957, Magazine Luiza has connected with customers in Brazil on a human level, to fulfill dreams and provide a happy and memorable experience.
Magazine Luiza provides an online store and more: In their stores, shoppers sit with associates who guide them on Internet
shopping trips Local stores act as social hubs and offer community services, like
cooking classes or computer training The online site contains a virtual salesperson “Lu”, interacting with
customers
In response to today’s customer individualization, Magazine Você (“Your Store”), allows anyone to create personalized storefronts and share them via Facebook or Orkut: Store “owners” earn a commission when selling products Conversion rates are running higher than the retailer’s online store
Already, more than 20,000 social stores have sprung up. Magazine Luiza expects to touch 1 million customers within one year of launch.
34
Case Study: Magazine Luiza – Maintaining a human touch in an online world
© 2012 IBM Corporation
IBM Institute for Business Value
35
Commitment to external partnering has grown significantly
Commitment to external partnering has grown significantly
How will CEOs create more economic value by innovating differently with partners?
Virtually all organizations now partner, creating new avenues for innovation
Virtually all organizations now partner, creating new avenues for innovation
Outperformers are more likelyto partner for innovation, disrupt,
and derive revenue from new sources
Outperformers are more likelyto partner for innovation, disrupt,
and derive revenue from new sources
© 2012 IBM Corporation
IBM Institute for Business Value
36
Source: Q16g “What will your operating strategy be in 3 to 5 years, compared to today?” [Partner extensively / Do everything in-house]
Historical comparison of external partnering
Key Discovery
55%55%
2012
2008
69%69%
Over the past few years, partnering has become increasingly prevalent – more than two-thirds of CEOs intend to do so
2525%more
© 2012 IBM Corporation
IBM Institute for Business Value
CMOs increase use of external partnerships in the areas of sales, analytics, and IT skills
CMOs increase use of external partnerships in the areas of sales, analytics, and IT skills
For CIOs, increased partnering is associatedwith a desire to refine the mix of capabilities
For CIOs, increased partnering is associatedwith a desire to refine the mix of capabilities
37
Sales contact/lead management
Customer and data analytics
Direct/relationship marketing
IT skills
Source: 2011 CIO Study Q7 “To benefit from global integration will your organization do the following?”; 2011 CMO Study Q16 “What do you do within marketing and what resources will you tap into, to manage marketing?”
7%7%
12%12%
13%13%
23%23%
Partnering extensively with other organizations
65%65%
Significantly change mix of capabilities, knowledge and assets
66%66%
Today In 3 to 5 years
CIOs and CMOs have diverse motivations for external collaboration
14%14%
23%23%
23%23%
37%37%
© 2012 IBM Corporation
IBM Institute for Business Value
38
External partnering for innovation
Source: QD “To what extent does your organization collaborate and partner (externally) to innovate?”; CEO average score is 53%
Outperformers
Underperformers
Outperformance drivers
46%
59%59%
2828%more
Outperformers partner substantially more often for innovation
© 2012 IBM Corporation
IBM Institute for Business Value
Source: Q13 “What key initiatives will you implement over the next 3 to 5 years?”; Q11 “What approximate percentage of your revenue comes from new sources, including new products and services, markets or industries?”
39
Outperformers
Underperformers
Outperformance drivers
18%
35%35%
9494%more
Creating entirelynew industries
19%
26%26%
3737%more31%
46%46%
4848%more
Moving intodifferent industries
Industry model innovation Revenue from new sources
Outperformers pursue more disruptive types of innovation and derive more revenue from new sources
© 2012 IBM Corporation
IBM Institute for Business Value
40
1. Fundamentally change how you partner
1. Fundamentally change how you partner
3. Break collaboration boundaries3. Break collaboration boundaries
2. Make partnerships personal2. Make partnerships personal
So, how can organizations partner moreeffectively to meet the innovation challenge?
Achieve differentiation through social innovation
Expand scope of partnerships Tackle the shared governance challenge
Achieve differentiation through social innovation
Expand scope of partnerships Tackle the shared governance challenge
Broaden responsibility for managing partnerships
Foster relationships at each level across partnering organizations
“Partners” can be a community of people
Broaden responsibility for managing partnerships
Foster relationships at each level across partnering organizations
“Partners” can be a community of people
Explore unconventional partnerships Think like a disruptor Innovate together as a system
Explore unconventional partnerships Think like a disruptor Innovate together as a system
© 2012 IBM Corporation
IBM Institute for Business Value
The pressure and costs to innovate mount, and boundaries between organizations are becoming more porous interactions span more functions and are more continuous, with control and governance increasingly being shared
Achieve differentiation through social innovationExtend communication and collaboration tools so that peers can interact within and across organizations – integrate data resources to reveal unexpected, mutually beneficial insights
Expand scope of partnershipsEvaluate ways to extend and connect existing partnerships on innovation, to include ideation, R&D, and also sales, marketing or HR
Tackle the shared governance challengeEstablish ways to share key aspects of control – such as prioritization, decision making and funding – that are traditionally dominated by one partner
41
Purpose Form relationships with leading
social media organizations to promote innovation in customer engagement
Activities Partnered with Twitter to create
location-specific discounts for customers when they tweet their location
Created "Small Business Saturday“ by offering a $ credit to customers who spend at participating small businesses
Fundamentally change how you partner
Payments and travel business, USA
© 2012 IBM Corporation
IBM Institute for Business Value
Technology now presents opportunities for much deeper connections with partners – opportunities for innovation – both spontaneous and orchestrated – are rising in step with interconnectedness
Broaden responsibility for managing partnershipsEmbed relationship management capabilities within the organization – use centralized alliance management functions to supply specialized skills
Foster relationships at each level across partnering organizationsProvide avenues to develop personal connections among peers at every level
Consider the possibility of “partners” being a community of peopleDon’t limit your view to organizations – your most valuable “partnership” might be a group of individuals
42
Purpose
Activities Created strategic distribution
partnerships focused on product planning and promotions
Employees gather customer insights which are routed to partner organizations to inform future product development
Enhance strategic partnerships by engaging employees across sales channels
Make partnerships personal
Retail business, China
© 2012 IBM Corporation
IBM Institute for Business Value
To address rising complexity, organizations need to look beyond traditional partners and conventional views on innovation for new inspiration and necessary capabilities
Explore unconventional partnershipsStudy nontraditional alliances emerging in other industries and look for parallel applications in your own – integrate capabilities not commonly found in your own industry
Think like a disruptor Stretch thinking beyond business as usual, even when business as usual is working – question norms, introduce new stimulation from outside
Innovate together as a system Approach untenable issues or grand challenges by partnering across the entire system – with competitors, governments, non-governmental organizations and more
43
Purpose Innovate processes to reduce the
number of components used in car manufacturing
Improve speed and flexibility of production
Activities Formed collaborative
partnerships with suppliers to promote innovation
Reduced procurement costs and improved component design
Break collaboration boundaries
Automotive business, Japan
© 2012 IBM Corporation
IBM Institute for Business Value
44
Shell has a long history of partnering for innovation, since 1907.
Collaboration is focused on energy innovations, working with partners to diversify the fuel supply and reduce its environmental impact: Production of sustainable, low-carbon biofuels Developing of next-generation biofuels from waste products, and hydrogen fuel-cell
technology Reducing emissions of traditional fuels used in transportation, such as natural gas
To address energy and environmental challenges, Shell is working with experts to explore relations between energy, water and food systems to gain a deeper understanding of long-term risks and opportunities: Sustainable urban design Reduce water use for electricity generation Alternative transport fuels and heating
Case Study: Royal Dutch Shell – Partnering to power the future
© 2012 IBM Corporation
IBM Institute for Business Value
46
Source: Q25 “What are the five most important characteristics that a CEO needs to be successful over the next 3 to 5 years?”
CEO characteristics for success
Customer obsession
Inspirational leadership
Leadership teaming
Global mindset
Competitive instinct
Boldness
Transparent
Risk tolerant
Disruptive creativity
61%61%
Financial skills
Technology savviness
Diversity-driven
Environmentally / socially devoted
Key Discovery
In this period of rapid and disruptive change, CEOs lead while learning, outlining three traits critical to their personal success
60%60%
58%58%
48%48%
38%38%
35%35%
34%34%
33%33%
33%33%
24%24%
23%23%
20%20%
16%16%
© 2012 IBM Corporation
IBM Institute for Business Value
47
CEOs will lead bold change by providing inspirational leadership to their people, customers and collaborators
Source: Q25 “What are the five most important characteristics that a CEO needs to be successful over the next 3 to 5 years?”
© 2012 IBM Corporation
IBM Institute for Business Value
48
Source: Quotes from all questions
CustomersCustomers
InspirationInspiration LeadershipLeadership
TeamingTeaming
We analyzed over 10,000 quotes to uncover the deeper thoughts of CEOs that relate to their key personal aspirations
© 2012 IBM Corporation
IBM Institute for Business Value
49
Empowering employees through values Organizational openness introduces new opportunities to create value through
employee collaboration To re-balance control with openness, CEOs are focused on values,
collaboration and mission Outperformers embrace greater openness, and excel at executing tough
change
Empowering employees through values Organizational openness introduces new opportunities to create value through
employee collaboration To re-balance control with openness, CEOs are focused on values,
collaboration and mission Outperformers embrace greater openness, and excel at executing tough
change
Engaging customers as individuals Customers share insights into what they value individually, and when and how
they want to interact To connect individually, CEOs plan a step change in social media interaction
and continuing face-to-face engagement Outperformers strongly differentiate by better data access, insight, and
translation into actions
Engaging customers as individuals Customers share insights into what they value individually, and when and how
they want to interact To connect individually, CEOs plan a step change in social media interaction
and continuing face-to-face engagement Outperformers strongly differentiate by better data access, insight, and
translation into actions
Summary
How CEOs drive new economic value through connections
Amplifying innovation with partnerships Commitment to external partnering has grown significantly Virtually all organizations now partner, creating new avenues for innovation Outperformers are more likely to partner for innovation, disrupt, and
derive revenue from new sources
Amplifying innovation with partnerships Commitment to external partnering has grown significantly Virtually all organizations now partner, creating new avenues for innovation Outperformers are more likely to partner for innovation, disrupt, and
derive revenue from new sources
© 2012 IBM Corporation
IBM Institute for Business Value
To continue the conversation...
For more information about this study and to get the full version of this report, see www.ibm.com/ceostudy2012
Access interactive content and listen to CEOs in their own words by downloading the IBM IBV app for Android or iPad
50
© 2012 IBM Corporation
IBM Institute for Business Value
52
Empowering employees through values 73% more successful in managing change 30% more emphasis on organizational openness almost 3 more years in leading position (time-in-role)
Empowering employees through values 73% more successful in managing change 30% more emphasis on organizational openness almost 3 more years in leading position (time-in-role)
Engaging customers as individuals 108% better at access to data 108% better at drawing insights from data 84% better at translating insights into action
Engaging customers as individuals 108% better at access to data 108% better at drawing insights from data 84% better at translating insights into action
Amplifying innovation with partnerships 68% more likely to integrate business and technology for innovation 48% more are moving into different industries 37% more likely to derive revenue from new sources
Amplifying innovation with partnerships 68% more likely to integrate business and technology for innovation 48% more are moving into different industries 37% more likely to derive revenue from new sources
Summary
What makes outperformers different?