IBM Industry Summit: Frank Kern On Mastering The Tsunami

IBM vice president Frank Kern explains to the IBM Industry Summit in Barcelona how they can begin to master today's information tsunami.

Frank Kern, senior vice president of IBM’s Global Business Services followed a tough act in Ginny Rometty, but provided yet another valuable and, dare I use the word, “insightful” look at the smarter planet agenda.

He began, appropriately enough, with data.

From the IBM 2010 Global CEO Study, which IBM conducts every couple of years (and which I wrote about extensively in a prior post), Kern indicated it’s always a pleasure to meet with over 1,500 CEOS from around the world so IBM can “listen and learn.”

And learn we did. Lessons, in fact, that are driving IBM business decisions, and creating a harmony across IBM’s various product lines unseen since…well, forever.

So what’s on the CEO agenda, Kern asked, particularly coming out of a recession?

First, accelerating global complexity, driven in large measure by our increasing interconnectedness and voluminous amounts of new data. Systems linked, if you will, to other systems.

Second, CEOs identified a gap between that accelerating complexity and their organizations ability to deal with it, some thirty percentage points between those who are embracing the complexity and those befuddled by it.

Creativity, therefore, is the top leadership quality, Kern reported, that CEOs indicated could best equip them to get out of this mess.  Creativity, not operational rigor or management discipline (although a little of those probably wouldn’t hurt, either).

CEOs are also telling us there has to be a willingness to break with the status quo, to break current models, even if they still work.

The top organizations that performed best during the growth years, and during the downturn, were those which are also the most likely to take on new possibilities — 23% more likely to advocate change to their business models, and growing revenue 6% more than the average Joe Company.

Technology, Kern said, also continues to rise in importance on the CEO agenda, from 6^th to 2^nd position (ahead of macroeconomics and governemnt regulation).

People alone won’t get fast enough, smart enough, capable enough, Kern indicated, to deal with all this uncertainty. The smartest, best-intentioned people just can’t help do some of the things that need to be done: Uncover new revenue sources; build operating dexterity; reinvent customer relationships.

Creativity unlocked by new technology is required to capitalize on those new opportunities.

Or, conversely, Kern posed the question, “Does anybody here think our customer relationship is going to be reinvented by increasing sales face time???”

There are other new and exciting opportunities on the horizon.

Enterprises are starting to hear global conversations going on about their brands, across social networks. They can capture, analyze, decide, and act. They can be fast, and they can be right.

Who needs Mark Zuckerberg?

Apparently, everybody. And LinkedIn. And all the other venues around the globe where important conversations are taking place, and business decisions are being made, and people are being influenced.

Social business, is what we’re calling it at IBM.

All this realtime information is out there, tremendous amounts of it. We’re processing more information than ever before, but less of what is available, and radically less than what’s generated in real time.

That’s why customers fear they are operating with blind spots growing bigger, even as they sense this huge opportunity if they can master the tsunami.

Threat or opportunity, Kern continued. Last year that was an open question: It is not a question anymore.

Today, Kern explained, we see examples of clients that are looking to exploit this historic explosion of data to their advantage.

The New York City Police department, for example, who, by using analytics, can now predict where the bad guys are going to go after they’ve committed a crime (Hint: The location is not their friendly local NYPD precinct.)

Just last month, IBM released a report on electronics spending for Nov/Dec 2010, and the forecast said spending would be up 4% in US. (We were probably right…I just bought a new laptop, which surely sent the numbers up a few fractions of a percentage point).

North Carolina’s Health and Human Services is helping detect fraud in public services with a fraud detection solution (I’m hopeful we’ll be able to use this one for politics as well).

There’s that inflection point again, said Kern, driven by a pressurized, intense environment, shifting from value propositions that were labor-based journeys to ones focused on committed business outcomes.

What makes this outcome orientation different from ten years ago?

An idea whose time has come, said Kern. We’re seeing a a broader and deeper substitution of technology for labor. We’re replacing custom work with standard repeatable assets.

We’re developing asset content that’s embedded in solutions, all the way through delivery. Without this repeatability, and throughout the life cycle, it’s hard to get a path to these committed business outcomes.

With IBM business consulting, along with IBM research and yes, even IBM software, we can infuse our consulting with repeatable solutions born out by real world implementations.

Why now? Standardization, in a word.

In a world that’s grown increasingly complex, we can now have greater certainty with our outcomes using repeatable, predictable progression paths. Say that three times quickly, then overhaul my business while you’re at it.

Finally, we’re on to higher order problem solving. We have to be.

Companies and organizations must use technology, business analytics, smarter systems, and underlying infrastructures that better allow them to adapt to all the aforementioned complexities.

Then, we can move along to the next orders of value, predicting market behaviors and even consequences of individual decisions.

The key theme here, noted Kern, is about new insights, and how they must be operationalized. How you can align your insights with your business strategy, and your organizational processes?

Easy to say, hard to do.

If we take a step back, concluded Kern, we’re seeing indicators of something important and even optimistic (And we could all go for a little of that about now, couldn’t we?)

We’re at a remarkable point in time, entering a new normal of economic conditions, one with an accelerating climate of unpredictability, and emerging out of all of this is this question on the minds of global business leaders:

What’s my greatest possibility?

When you got from what’s the problem to what’s the possibility, what are the prospects, what’s available to my enterprise that was never there before…well, this is a prospect worth the best efforts of us all.

And with our clients and partners we can enable and participate in all that.

THUNDEROUS APPLAUSE