CEOs stay true to growth priorities as digital age takes shape
- 01 May, 2016 14:29
CEOs have underlined that growth will be their top business priority for 2016, according to a recent survey by Gartner.
The 2016 Gartner CEO and senior business executive survey found that despite indications that the global economy is struggling in early 2016, CEOs do not plan to significantly change their priorities.
After growth (54 percent), the second and third business priorities are customers (31 percent) and workforce (27 percent).
In the survey, the most responding organisations were those with annual revenue of $1 billion or more, demonstrating that while business conditions are challenging, CEOs remain confident enough to sanction strategic investments, particularly when it comes to digital business transformation.
“The big rise of explicit mentions of the word "customer" was very noticeable in the results of this year's survey,” says Mark Raskino, vice president and Gartner Fellow.
“CEOs seem to be concerned about improving customer service, relationship and satisfaction levels.
“At the same time, CEOs have become much more concerned about employee issues than a couple of years ago. The emphasis is as much on benefits, retention and training of mainstream staff. It is not constrained only to senior grade 'talent' issues.”
In a bid to stick to their digital business transformation plans, more and more CEOs are choosing to head up digital change in the business.
As Raskino explains, the survey also found that CEOs now understand that digital business is substantial enough to warrant them leading it personally.
“If they delegate primary responsibility, then the next most likely leader is the CIO,” he explains.
“The rise in the number of CEOs heading up digital change is unsurprising given that half of the CEOs surveyed expect to see substantial digital transformation in their industries, or for their industries to be almost unrecognisable within five years.”
Examples of digital changes in industries include self-driving cars, the rise of blockchain in banking, the e-cigarette revolution in tobacco and the potential impact of Internet of Things (IoT)-fuelled data science in insurance.
The survey results also showed that CEOs appear to see digitalisation as a positive force, not a destructive one.
Overall, they are very bullish about the effects of digital change on the gross (pretax) profitability of their businesses, with 84 percent of CEOs expecting digital change to bring higher profit margins.
“One explanation for CEOs' optimistic attitude toward digital change may be because they can see how it helps with the product innovations that matter to customers,” Raskino adds.
“We asked CEOs what proportion of the customer perceived value of products and services they think is digital.
“Thinking about the product features that customers are choosing and believe they are buying, CEOs said the value percentage is already 30 percent on average, and will rise to 46 percent by 2019.”