With customer preferences changing constantly, and the technology landscape in continuous flux, CEOs clearly need to arm themselves with the right skills and resources to take real advantage of digital transformation.
Data and predictive analytics are proving increasingly useful. But human skills – the ability to remain agile and use experience and intuition – are vital too in spotting new opportunities and avoiding risks.
CEOs also need to build the right strategic alliances with third-parties, on the right terms, to help propel them more quickly on their digital journey.
With an overwhelming majority of CEOs (95%) now seeing digital transformation more as an opportunity rather than a threat, many are aggressively building their ‘eco-systems’ of third party partners to help them grasp those opportunities more quickly.
As many as 61% of UK CEOs say their organisations will collaborate with innovative start-ups, for instance. But it is not enough to simply have an attractive eco-system to attract promising start-up partners.
Whether working with a start-up or a key customer to develop solutions, CEOs also need to make sure they extract maximum value from these relationships. That means structuring tie-ups carefully so that worries about sharing data, cultural barriers or unrealistic expectations on returns don’t block progress.
61% of UK CEOs plan
to collaborate with innovative start-ups
Top five barriers to extracting value from third-party networks
|1||Challenges measuring ROI from third-party partnerships|
|2||Difficulty sharing data securely with third parties|
|3||Concerns about sharing commercially sensitive data|
|4||Procurement processes are lengthy and complex|
|5||Legacy IT systems are incompatible with nimble approaches by startups|
We’ll build something to a minimal viable product – maybe 60% completion – and then co-create with a customer so we can bring value to them much faster.
Former Chairman and CEO
The Dow Chemical Company
Agility is about more than speed. It’s also about identifying where innovation burns brightest and – if that’s outside the organisation – establishing partnerships with third parties to harness this energy.
Head of Consulting
KPMG in the UK
In a digital economy, where industries and business models are being constantly reshaped, CEOs have to be able to innovate quickly. It’s become a strategic imperative.
UK CEOs feel this to be true more strongly than their global counterparts, with 79% saying they need to act with agility to survive – 20 percentage points higher than their global peers. Two thirds of UK CEOs see partnerships as the way to achieve that agility.
79% of UK CEOs say agility is the new currency of business
At some point, experience kicks in and, if necessary, overrides all the other signals.
Global Head of Innovation
Data and analytics have transformed the way CEOs and their executive colleagues make decisions.
And there is no doubt these technologies will get more sophisticated, for instance as AI draws on deep learning techniques to enhance predictive analytics.
Yet a majority of CEOs recognise that data is not the be-all and end-all. Their own intuition, experience and judgement continue to be critical in making the right decisions.
Some 67% of CEOs – both globally and in the UK – say they have ignored the insights provided by data analysis or computer-driven models in the last three years, because they have contradicted their own intuition or experience.
67% of both
global and UK CEOs
say they’ve put their own intuition over
CEOs who have overlooked computer-driven models to follow intuition instead (by country)
Some CEOs expressed scepticism about the accuracy of predictive data, with over half of global CEOs and 71% of UK CEOs saying they are less confident about its accuracy, compared with historic data.
Nevertheless, 37% of UK CEOs say they plan to increase the use of predictive analytics in future. Even more (53%) say they will increase their use of unstructured data.
The source of data most trusted by CEOs is, perhaps surprisingly, social media. Some 42% of CEOs say they have a very strong trust for this unstructured ‘word-of-mouth’ information. Only 12% say the same about open data from government sources.
Agree with the statement: we need to act with agility to survive