Ceo wake-up call: time for a big, big change

IBM recently published their bi-annual global CEO study where 1130 CEOs across the globe were interviewed.

More than 8 out of 10 of the CEOs recognized a great need for change during the coming years in order to cope with global competition and increased customer demands, up from 65 % in year 2006. But fewer CEOs were confident that they would succeed – no more than 61 % claimed that they  had been successful previously, when taking on  major changes.

Finally, the global competitive challenges seem to have reached every single corner of the business landscape, even into the board rooms of the public sector organizations (top executives from those sectors were also included in the study).

The most important challenge for the future, according to the study, is proactivity, or eagerness to change. Companies need to undo the competition, surprise both customers and competitors by new innovative moves, develop new markets, products and business models. They need to be trend setters, not followers. Those results are exactly in line with results from previous studies from Kairos Future, identifying key performance drivers, and follow closely much of the academic research in the strategy field from the mid 1990s. Interestingly though, is that this now seems to become mainstream wisdom, also on top management level shifting focus from an obsession with operational efficiency and cost-cutting to a more balanced view where innovation and strategic change is considered top priorities for long-term performance.

Eight years ago Mats Lindgren, Kairos Future's CEO, took his doctoral degree on an international research project on strategy related performance indicators in turbulent business environments, exactly the type of business landscapes most CEOs now are talking about. The purpose was to identify key performance drivers, and the key driver found was… Visionary proactivity!

Visionary proactivity is about being aggressive, trying to maximize opportunities, having first-mover ambitions and taking competitors by surprise and forcing them to respond to your own actions, and having a long-term visionary orientation.

But successful companies, especially in raplex (rapidly changing and increasingly complex)  environments were also extremely good at divergent thinking, evaluating different scenarios and planning for alternative outcomes and responses. Having well functioning top management teams (functioning as a team, with a strategic conversation and team spirit!) and systems that support the desired culture were also found to be extremely important.

The most interesting finding in the study made by Kairos Future was that 60-70 percent of companies' total performance and 20-40 percent of the financial performance was due to the ability to respond rapidly and strategically to external challenges and opportunities. That is truly the challenge of the future!

 Key performance drivers in raplex (turbulent) business environments. Source: Kairos Future

For further information about the Kairos Future's study, or for a benchmark of your own organization's "future excellence capability", please contact Mr. Mats Lindgren,  by e-mail.