With customer demands changing continually, and the technology landscape in a constant state of flux, CEOs now see agility as the dominant currency of business. But the quest for ever-greater agility does not mean they simply have to embrace data and intelligent technologies wholesale at the expense of human qualities. CEOs are also bringing their own intelligence to bear, combining their experience and intuition with data-driven, predictive intelligence to spot new growth opportunities.
In a digital economy, where new technologies are constantly reshaping industries and business models, the ability to innovate quickly is a strategic imperative. In the survey, 59 percent of CEOs say that acting with agility is the new currency of business and that if they are too slow they will go bankrupt. “Acting with agility is not just the new currency of business; it’s the most valuable currency today,” says KPMG’s Goodburn. “If you succeed, you succeed faster, and if you fail, you fail quicker — both of which add to the health of a business.”
Build the ecosystem
To get more agile and put digital innovation on the fast track, organizations are aggressively building their networks (or ‘ecosystems’) of third-party innovation partners. More than half of organizations (53 percent), for instance, will set up accelerator or incubator programs for startups. But simply having a startup-friendly ecosystem is no guarantee of success. CEOs need to focus on driving value from their networks and ensure that cultural barriers and concerns about data sharing don’t limit the success of innovative ideas.
For Dow’s Liveris, the innovation process is a mix of freedom and collaboration with customers. “If you’re going to move a consumer on digital speed, you can’t govern and control every last thing. We’ll build something to a minimal viable product — maybe 60 percent completion — and then co-create with a customer so we can bring value to them much faster.”
For Tata Communications’ Kumar, cultural alignment is another significant issue. “There is a challenge around aligning cultures and speeds of large companies with those of startups,” he says. “Also, larger companies tend to be more inclined to keep the pie to themselves, whereas startups need to work with multiple players to test their technology and proofs of concept. There’s an expectation mismatch.”
Data and analytics have changed how CEOs and the rest of the C-suite make business decisions. And they continue to get more sophisticated: AI that draws on deep learning techniques, for example, will transform predictive analytics.
Yet CEOs have not lost sight of the importance of their own intuition, experience and judgment. In our survey, in the past 3 years, 67 percent say they have overlooked the insights provided by data and analytics models or computer-driven models because they contradicted their own experience or intuition.
KPMG’s Hill likens this to the experience behind the wheel of a race car. “There’s a mountain of technical data — brake pressure, angles of steering input — all coming at once. At some point, experience kicks in and, if necessary, overrides all the other signals.”
CEOs in the US are particularly likely to draw on their domain expertise and unique insights when making critical strategic decisions, with three-quarters saying they have overlooked computer- driven models in the past and followed their intuition instead.
CEOs also show some skepticism about data. Over half (51 percent) say they are less confident about the accuracy of predictive analytics than historic data. They want to understand where the data that informs predictive models has come from and whether it can be trusted.
“Understanding where the data comes from is crucial for us,” says Cintra’s Díaz-Rato. “We have seen exciting insights that would be powerful provided they were representative of our overall customer base, but they weren’t. You get fascinated by the degree of granularity you get from customers’ behavior from a certain app, but the question is, are the users of this app representative of the whole population a project is serving? You can be driven to wrong conclusions if you just follow the data blindly.”
The article “Instinct over data” was taken from the publication entitled Growing Pains: 2018 Global CEO Outlook.