In the face of massive technology-driven disruption to major industries such as auto and retailing, U.S. CEOs are eager to respond. They just aren’t sure how.
An overwhelming majority of the 400 CEOs polled by KPMG in a recent survey expect to see more disruption and technological innovation over the next three years than in the past 50, and they plan to invest heavily in data and analytics in response.
But the chief executives, all of whom lead companies with at least $500 million in revenue, are uncertain about the role that these technologies should play. Two-thirds are seeking guidance from their chief data officers concerning how to best mine, aggregate and make use of data to develop a more customer-centric approach. But only 31% feel they are leaders in data and analytics usage, and 10% of the CEOs surveyed actively distrust their organization’s use of data and analytics.
The “race for the customer” is pushing businesses to reevaluate their behaviors through data and analytics, observes Brad Fisher, a KPMG partner and its U.S. leader for data and analytics. Such efforts, he says, “will largely shape the winners and losers for the next 50 years.”
"Nearly all CEOs see emerging opportunities over the next five years that are detectable now, through signals like changing demographics, technology innovation and start-up activity," adds Mike Nolan, the audit and tax firm’s vice chair for innovation and enterprise solutions. "However, it's the forward- thinking CEOs that take a broad view of the areas where disruption is taking place, assess how these elements impact their business and operating models, and begin to reshape their company into an organization that turns disruption into innovation."
Yet only 25% of the respondents to KPMG's 2016 U.S. CEO Study say innovation is embedded into everything they do, and 36% say their organization's approach to innovation is either ad hoc, reactive or takes place on a siloed basis. On a more positive note, 80% of the CEOs expressed confidence in their management team's ability to drive innovation, although the large majority (85%) indicated that they need more time to strategize about how to foster innovation and proactively address disruptive challenges.
The Growth Dilemma
Underlying all of this is the pressure to grow faster. Among the polled CEOs, 51% expect their top-line growth over the next three years to be 5 percent or less.
"Five percent or less growth estimates don't excite shareholders," remarks Nolan. "To move the needle, successful CEOs are working hard to drive the right mix of investments in new products and services [and] attract new customers."
“There is this elusive pursuit of growth and it is very difficult,” agrees Gary Burnison, CEO of Korn Ferry, the executive placement firm. “I think that CEOs have only a few levers: You can innovate or you can consolidate but you have to do anything you can to tap this borderless consumer.”
But growing in a slow-growth economy means facing intensifying competition—much of which is now non-traditional, notes Gary Silberg, KPMG’s national sector leader for the automotive industry. To this end, CEOs recognize the need for technology to better collaborate and become more agile in response to new market entrants.
Says Silberg, “Companies must solve what we call the clock-speed dilemma —the need to balance traditional engineering ingenuity and quality with the faster clock speeds of new players entering the ecosystem.”
Register or login for access to this item and much more
All Information Management content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access