Why digital business talent is a top priority for CEOs
Who is leading digital transformation at the most forward-thinking organizations across the globe, and what are the most significant roadblocks to their progress? That depends, on who you ask. Let's consider the most common digital business challenges today, and how savvy leaders overcome them.
Digital growth tops the list of CEO business priorities in 2018 and 2019, according to the latest worldwide market study by Gartner. However, as growth becomes harder to achieve, CEOs are concentrating on changing and upgrading the structure of their companies -- including digital business investments.
Exploring digital business transformation culture
"Although growth remains a CEO's biggest priority, there was a significant fall in simple mentions of it this year, from 58 percent in 2017 to just 40 percent in 2018. This doesn't mean CEOs are less focused on growth, instead it shows that they're shifting perspective on how to obtain it," said Mark Raskino, vice president at Gartner.
The Gartner survey of CEO and senior business executives in the fourth quarter of 2017 examined their business issues, as well as some areas of technology agenda impact. In total, 460 business leaders in organizations with more than $50 million in annual revenue were qualified and surveyed.
IT remains a high priority coming in at the third position, and CEOs mention digital transformation, in particular. Workforce has risen rapidly this year to become the fourth-biggest priority, up from seventh in 2017. The number of CEOs mentioning workforce in their top three priorities rose from 16 percent to 28 percent.
However, when asked about the most significant internal constraints to growth, employee knowledge and progressive talent issues were at the very top of the list. CEOs said a lack of 'skilled talent' and workforce capability, by far, is the biggest inhibitor of digital business development progress.
Culture change is a key aspect of digital transformation. Gartner found that CIOs agreed it was a very high-priority, but only 37 percent of CEOs said a significant or deep culture change is needed by 2020. Regardless, when companies that have a digital growth initiative are compared with those that don't, the proportion in need of culture change rose to 42 percent. Enough said.
"These survey results show that if a company has a digital initiative, then the recognized need for culture change is higher," said Mr. Raskino. "The most important types of change that CEOs intend to make include making the culture more proactive, collaborative, innovative, empowered and customer-centric. They also highly rate a move to a more digital and tech-centric culture."
Survey respondents were asked whether they have a management initiative or transformation program to make their business more digital. Sixty-two percent said they did. Of those organizations, 54 percent said that their digital business objective is transformational while 46 percent said the objective of the initiative is optimization.
In the background, CEOs' that use of the word 'digital' has been steadily rising. When asked to describe their top five business priorities, the number of respondents mentioning the word 'digital' at least once has risen from 2.1 percent in the 2012 survey to 13.4 percent in 2018.
This attitude toward digital business development is backed up by CEOs' continuing intent to invest in IT infrastructure. Sixty-one percent of respondents intend to increase spending on IT in 2018, while 32 percent plan to make no changes to spending and only seven percent foresee spending cuts.
Ongoing digital culture development challenge
The Gartner survey showed that the percentage of survey respondents who think their company is an 'innovation pioneer' has reached a high of 41 percent -- that's up from 27 percent in 2013 -- with fast followers not far behind at 37 percent.
"CIOs should leverage this bullish sentiment by encouraging their business leaders into making commitments to digital business change," said Mr. Raskino. "However, superficial digital change can be a dangerous form of self-deceit. The CEO's commitment must be grounded in deep fundamentals, such as genuine customer value, a real business model concept and disciplined economics."
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