CEOs embrace a more connected culture, IBM study says

A new IBM study of more than 1,700 chief executive officers from 64 countries and 18 industries reveals that CEOs are changing the nature of work by adding a powerful dose of openness, transparency and employee empowerment to the command-and-control ethos that has characterized the modern corporation for more than a century.

The advantages of the fast-moving trend are clear.

According to the 2012 IBM CEO study, companies that outperform their peers are 30 percent more likely to identify openness—often characterized by a greater use of social media as a key enabler of collaboration and innovation—as a key influence on their organization. CEOs are embracing new models of working that tap into the collective intelligence of an organization and its networks to devise new ideas and solutions for increased profitability and growth.

Leveraging social networks

To forge closer connections with customers, partners and a new generation of employees in the future, CEOs will shift their focus from using e-mail and the phone as primary communication vehicles to using social networks as a new path for direct engagement.

Today, only 16 percent of CEOs use social business platforms to connect with customers as individuals, but that number is poised to spike to 57 percent within the next three to five years.

This trend is even more significant in Asean where the use of social networks is expected to go up to 68 percent from the current 25 percent, as Asean CEOs plan a step-change from traditional to social media while continuing face-to-face engagement.

Coming after decades of top-down control, the shift has substantial ramifications—not just for the CEOs themselves—but for their organizations, managers and employees, as well as for universities and business schools, and information technology suppliers.

IBM’s research finds that technology is viewed as a powerful tool to recast organizational structures. More than half of CEOs (Global: 53 percent, Asean: 53 percent) are planning to use technology to facilitate greater partnering and collaboration with outside organizations, while 52 percent (Asean: 47 percent) are shifting their attention to promoting great internal collaboration.

“CEOs realize at this point that even greater levels of control are not the key to greater innovation and financial performance. Rather, leaders have seen how extremely dynamic social networks can serve as the foundation of amazing levels of collaboration. Asean CEOs, in particular, are keen to leverage social networks and focus on collaboration—both internally and externally with customers and partners,” said Jack Arambulo, country manager for global business services, IBM Philippines.

Greater openness is not without risks. Openness increases vulnerability. The Internet—especially through social networks—can provide a worldwide stage to any employee interaction, positive or negative.

For organizations to operate effectively in this environment, employees must internalize and embody the organizations’ values and mission.

Thus, organizations must equip employees with a set of guiding principles that they can use to empower everyday decision-making.

Focusing on collaboration

Asean CEOs, more so than their global peers, regard interpersonal skills of collaboration (Global: 75 percent, Asean: 87 percent) and creativity (Global: 61 percent, Asean: 72 percent) as key drivers of employee success to operate in a more complex, interconnected environment.

“Given their intent to create greater openness, CEOs are looking for employees who will thrive in this kind of atmosphere. CEOs are increasingly focused on finding employees with the ability to constantly reinvent themselves. These employees are comfortable with change; they learn as they go, often from others’ experiences,” added Arambulo.

To build its next-generation workforce, organizations have to actively recruit and hire employees who excel at working in open, team-based environments.

At the same time, leaders must build and support practices to help employees thrive, such as encouraging the development of unconventional teams, promoting experiential learning techniques and empowering the use of high-value employee networks.

The trend toward greater collaboration extends beyond the corporation to external partnering relationships.

Partnering is now at an all-time high. More than two-thirds of Global CEO’s (69 percent) IBM spoke to intend to partner extensively.

In Asean, this number is even higher at 79 percent, with CEOs in the region aiming to partner extensively as part of their core innovation strategy.

Other findings

Since the CEO Study series began, technology—in its widest sense—has progressively risen on CEOs’ radar.

Today, 71 percent of Global CEOs regard technology as the No. 1 factor to impact their organization’s future over the next three years—a bigger change agent than shifting economic and market conditions.

Given the data explosion most organizations are facing, CEOs recognize the need for more sophisticated business analytics to mine the data being tracked online, on mobile phones and social media sites. Seven out of every 10 CEOs (Global: 73 percent, Asean: 73 percent) are making significant investments in their organizations’ ability to draw meaningful customer insights from available data.

While Asean CEOs agree that technology (68 percent) is an important factor impacting their organizations, they consider people skills (87 percent, Global: 69 percent) as the most critical factor, followed by market factors (74 percent, Global: 68 percent).

People skills continue to rank higher in Asean countries, as the region continues to experience growth, which results in the shortage of skilled resources.

The war for talent is specially acute when you consider how leaders in the region (Asean: 72 percent, Global: 71 percent) also identified human capital as the most important source of sustained economic value in their organizations.

(The IBM 2012 Global CEO Study is the fifth edition of IBM’s biennial Global CEO Study series. To better understand the challenges and goals of today’s CEOs, IBM consultants met face-to-face with the largest-known sample of these executives. Between September 2011 and January 2012, 1,709 CEOs and senior public sector leaders were interviewed worldwide to better understand their future plans and challenges in an increasingly connected economy.)