Drawing on the perspectives of 1,325 chief executive officers across 11 major markets, this year's survey offers a unique lens on how today's connected CEOs are plugged-in, people-first and purpose-led. Overall, three themes emerge:
- The road to renewal and leaders' optimism about the path to growth,
- The importance of following through on a trusted purpose by driving bold environmental, social and governance (ESG) programs, and;
- The determination of CEOs to instill new levels of digital agility.
Within these three themes, innovation plays a big part. Here, we highlight the role of innovation in the results of this year's survey.
The road to renewal
Despite continued uncertainty and risk volatility, CEOs are confident and optimistic about growth, feel a strong connection to their purpose and are looking to drive expansion. Connected CEOs recognize that the prerequisite for succeeding in a rapidly evolving landscape is being plugged in. This means building a digital core, connecting back-, middle- and front-office functions to focus on the customer. It means making sure the business model is relevant — deciding which businesses to divest or add, and reallocating capital expenditure to new digital growth opportunities. It means being resilient to cyber risk while also pursuing bold digital innovations.
As said, optimism is high among the CEOs, with 87 percent of the CEOs being confident in their own company's growth prospects. Inorganic strategies will be key to achieving this ambition. 31% make organic growth — such as innovation and R&D — their most important route to growth.
M&A will likely be particularly important for driving digital innovation and acquiring technology capabilities. The acceleration in digital technologies we've seen during the pandemic has meant that markets now operate more quickly. There has been a reset in the velocity of business, in areas such as customer behaviors, and CEOs need to ensure their companies are plugged in to this new dynamic and leading the pack. CEOs are shifting toward a cloud-first mindset, with half (50 percent) saying that they intend to partner with a third-party cloud technology partner in the next 3 years in pursuit of their growth objectives.
Trusted purpose
With increased stakeholder pressure to build business back better, CEOs are embedding ESG into business strategy. Regarding ESG, the public is demanding more ambitious ESG goals — but have CEOs taken the necessary steps to bring them to life? Today's connected CEOs are those that can deliver on a trusted purpose by responding to increased societal expectations while driving sustainable business performance through digital innovation. Neither can be done in a vacuum, as three-quarters (75 percent) of global CEOs say that their digital and ESG investments are inextricably linked. As CEOs plan to devote significant capital to becoming more sustainable, it's important their digital investments are plugged into their ESG needs.
Digital agility
CEOs are strengthening their organization's digital advantage by building a more flexible future of work and operating as part of digital ecosystems. CEOs recognize that digital lies at the heart of how companies can create new sources of value. While this is an opportunity, it's also a risk: The acceleration of digital technologies means that business models that have existed for years can quickly become obsolete and irrelevant. The research shows that CEOs are embracing the need to push the boundaries of their business and question long-held assumptions of what it will take to succeed in the mid to long term. When we asked them what action they planned to take in pursuit of their growth objectives, close to two-thirds said they intended to invest in disruption detection and innovation processes. This is an essential step to enable teams to think disruptively: questioning historical assumptions and traditional mindsets and brainstorming new ideas for a vastly different market environment. And rather than waiting to be disrupted by competitors, CEOs also said they're actively disrupting the sector in which they operate. This went from 61 to 72 percent in the past 18 months.
Overall, today's connected CEOs — those who are plugged-in, people-first and purpose-led — embrace tough leadership challenges. They look to drive growth and prosperity through digital agility and business model innovation. To disrupt the disruptors, innovation is the most important route to growth. Interested in more information about how innovation can generate organic growth?
If you are interest in knowing what we could mean for you, please contact Richard Wagenmakers or Wilco Leenslag.