CEOs feel unprepared as digital innovation changes business
Top-tier executives feel that emerging digital technologies will change the way their companies conduct business, but many feel their organizations are ill-equipped to face the brave new world, according to a McKinsley & Company study.
The consulting firm’s first annual survey on digital business found that most chief executives said the three major trends in the sector (big data and analytics, digital marketing and social media, and new platforms such as cloud computing) are on the priority list in their organizations.
One-third of executives interviewed said they expected digital business to generate an extra 10 per cent of income over the next three years.
However, nearly half of executives said their investment in digital was too small to make the most of these opportunities and to rise to challenges. Most said organizational shortfalls and a lack of IT skills were hurdles to embracing the digital world.
Social media must be on the minds of many CEOs at the moment. Another study by IBM found that half of CEOs expect to use social media to communicate with customers, partners and employees within the next three to five years.
Some other interesting points from the research are:
- Big data and social media landed on at least the top 10 priorities for just over half of companies.
- Half of executives said the primary goal for working with digital business was to build competitive advantage.
- 27 to 30 per cent of executives want to acquire new business through digital platforms.
- One-quarter of companies spend 3 per cent on digital business initiatives.
- Professional services, high-tech, health care and pharma businesses are investing the most in digital business.
- 40 per cent of CEOs expect at least 3 per cent investment in digital. This was the same for only 20 per cent of CFOs and 12 per cent of CIOs.
- Half of executives believe their companies aren't spending enough in digital.
Be sure to read the paper in full here.
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Managing Director, The Strategy Group
Dr Tobias is an accomplished innovation consultant and entrepreneurship strategist, drawing expertise from the academic, entrepreneurial and corporate worlds. Jeffrey’s commercial and business experience is particularly focussed on lean startup, design thinking and leadership. Prior to The Strategy Group, Jeffrey was Cisco’s Global Lead for Innovation in the Internet Business Solutions Group helping Fortune Global 500 companies improve customer experience and grow revenue by transforming how they do business.
Jeffrey is a professor of innovation and entrepreneurship teaching MBA students at the Australian Graduate School of Business at the University of New South Wales. An active angel investor, Jeffrey is on the board of various well known startups. Jeffrey’s corporate background includes leading global innovation strategy at Cisco, working with large corporates such as Adobe, Westpac, Telstra, Woolworths, and Perpetual.