CEO Survey by Leading Analyst Firm Says 2016 is Year of Digital Tenacity

CEO Survey by Leading Analyst Firm Says 2016 is Year of Digital Tenacity

CEO Survey by Leading Analyst Firm Says 2016 is Year of Digital Tenacity

There’s good news on the horizon for digital transformation based on the results of Gartner’s 2016 CEO Survey: The Year of Digital Tenacity report.

The survey revealed that growth will continue as the top priority for 2016 as 54% of CEOs weighed in followed by customers (31%) and workforce (27%) coming in as second and third. Growth held steady from the 2015 survey, but customers and staff have risen considerably as priority areas for CEOs.

gartner-2016-top-3-chart

Other Key Findings

  • IT has fallen slightly as a CEO priority; 2015 may have been the “peak digital attention” year.
  • The CEO is the single most important leader of digital business change; CIO is close second.
  • Half of CEOs expect their industries to be substantially or unrecognizably transformed by digital.
  • Three-quarters of CEOs expect those digital industry changes to bring higher profit margins.
  • CEOs expect 46% of customer perceived value in their products to be digital by 2019.

Clearly, digital transformation is a driving force that’s moving companies forward.

Key Issues and Recommendations

Stick to the Digital Transformation Plan

The report indicates there may be a risk that CEOs will fall back into “old IT behaviors” based on business confidence and economic indicators from 1Q16 that suggests conditions are likely to be harder than last year. Although there’s no proof of this happening, this could trigger old corporate culture behaviors like slowing down approvals, bickering over departmental budget allocations, and skewing bias towards cost saving rather than revenue winning projects. Those actions would be a big mistake.

Gartner recommends doubling down and forging ahead with digital business transformation plans. Rather than falling into the trap of “old IT,” CEOs should apply cutbacks to old business model areas to accelerate the digital switchover.

Benchmark Against Born Digital and Tech Companies, Not Just Existing Competitors

The survey suggests that CEOs have become complacent and overconfident when it comes to technology-based competition. They rate their own company highly on vision and execution against the best possible for the application of technology. This line of thinking allows new businesses with very different ideas and best practices to enter their space.

Gartner recommends including “born digital” companies in the considered competitor set (those founded after 1995 that apply internet technology based business capabilities as a core competency). They also recommend including companies that are outside your normal business industry today such as those who have future cloud-based services and big data interests very similar to your business.

Take the Co-pilot Seat to Lead the Digital Journey

There’s been a lot of discussion over the past years about who should lead the digital business and change efforts. The survey found that most of the time CEOs had a clear understanding that digital business had a substantial enough business impact to warrant them personally leading the effort. In some cases where the primary responsibility was delegated, it typically moved to the CIO.

Gartner recommends that CEO’s make it clear to their executive committee that they own the digital business leadership agenda, or in the case of delegation to the CIO they should formally redefine the role scope to encompass the digital business change agenda setting. They add that replacing the current CIO should be considered if that person is not capable of growing into the new scope of being a digital leader.

gartner-2016-digital-leader-chart

The Gartner CEO and senior business executive survey of 400 senior business leaders in user organizations worldwide was conducted in the fourth quarter of 2015, asking questions about 2016/2017. Most responding organizations were those with annual revenue of $1 billion or more. 

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