CEOs unwilling to take big risks to drive greater tech innovation will struggle to remain competitive in the future, according to a new report.
The report, 6 Hard Truths CEOs Must Face, conducted by the IBM Institute for Business Value, found that 62% of CEOs understand that they will need to rewrite their business playbook to win in the future, rather than play to existing strengths.
However, 59% surveyed say they “aren’t willing to sacrifice operational efficiency today to drive greater innovation”, the report said. Some CEOs looking to future-proof their strategies for long-term success are sidetracked by the short-term rewards of their current models.
One hard truth CEOs must face to progress their organisations: Tech short cuts are a dead end.
“With new applications coming into view every day, CEOs have many opportunities to choose from — and no guarantees about which will deliver the most value,” the report said. “Yet, making the right technology investments is one of the key factors that set top-performing CEOs apart.”
The more technical debt holds leaders back from investing in long-term solutions, the more companies are at risk of missing out on the business potential of generative AI, the report said.
“To make their wildest generative AI dreams reality, CEOs need to let go of ‘what has always worked’ and start tackling the hard truths holding them back,” the report said. “The risk is real, but sticking to the status quo isn’t any safer.”
Other tough questions and delicate areas companies must consider in order to stay competitive include:
Do we have a strong enough team? More than half of CEOs in the survey say they’re struggling to fill key technology roles — and it’s unlikely this task will get easier anytime soon, the report said. Organisations need to be prepared to spend more time than in the past to hire for in-demand skills.
Can we keep the pace with market demands? CEOs say product and service innovation is their top priority for the next three years — up from sixth place in 2023. Generative AI can help companies look beyond what customers say they want today “to design the breakthrough innovations of tomorrow”.
Are we prioritising familiarity over strategy? To maintain a competitive edge, it is imperative for CEOs to cut ties with partners no longer producing results, the report said.
Do we all agree (and is that a problem)? The C-suite shouldn’t always agree, and constructive conflicts can lead to inspired solutions to interconnected business challenges, the report said. To restructure the C-suite for success, leaders should give clear guidance about who has authority in each area.
Is our team working against us? Employees may resist adopting technologies they believe will replace them, the report said. To get people on board, organisations should invest in training that will help employees see how generative AI can help them in their roles.
— To comment on this article or to suggest an idea for another article, contact Steph Brown at Stephanie.Brown@aicpa-cima.com.
