Turbotodd

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IBM Industry Summit: Frank Kern On Mastering The Tsunami

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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 6th to 2nd 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

IBM Industry Summit: Setting The Stage For A Drastically Different World

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At the IBM Industry Summit this week here in Barcelona, executives from companies around the globe representing industries across the spectrum will be in attendance.

One of the key themes those executives can expect to hear discussed at the Summit is the challenge of responding to increasing complexity.

Hearkening back to the 2010 IBM Global CEO Study, which I provided a summary of in this blog earlier in the year, 79 percent of executives surveyed believed that they expected the high level of complexity only to increase, and yet only 49 percent of those polled felt they were prepared for that complexity.

The combined insight from 1,541 interviews conducted with C-level executives around the globe in the 2010 IBM Global CEO Study: Be creative, reinvent customer relationships, and embrace complexity by building dexterity.

Call that “The Complexity Gap.”

Mastering The Complexity Gap

Edward Lonergan, president and CEO of Diversey, Inc., responded in the published results that “The complexity our organization will have to master over the next five years is off the charts; a 100 on your scale from 1 to 5.”

So how to even start an attempt to master such massive complexity?

That led to the second of several key findings in the study.

CEOs asserted that creativity is the most important leadership quality in our new and more complicated world.

Not a characteristic one typically hears as being highly valued in the boardroom, yet with all this acknowledged complexity, executives seemed to be saying traditional rules don’t apply, and creative leaders tend to encourage experimentation through their organization.

In the study results, they also indicated that creative leaders make deeper business model changes to realize their strategies, and take more calculated risks and keep innovating in how they lead and communicate.

Collaboration Inside And Out

But that innovation can’t stop just short of the corporate firewall.

The third key finding was that CEOs around the globe believe that the most successful organizations co-create products and services with customers, and they also integrate those customers into core processes.

An astounding 95% of "standouts" surveyed in the IBM Global CEO study data revealed An astounding 95 percent said that “getting connected” with customers is their top priority.

You’ll be hearing more about this key meme from IBM in an announcement later today, but this idea is recognition of a simple concept: Customers know best.

The most successful organizations not only partner with their customers to create new products and improve services — they also adopt new channels to engage and stay in tune with them, and they glean more intelligence from the barrage of available data and make customer intimacy their number-one priority.

Simplify, Simplify

Henry David Thoreau spoke of simplification in his renowned Walden.

But he also wrote there that “it is characteristic of wisdom not to do desperate things.”

Truth is, when it comes to successful organizations, the CEO study data revealed that the better performers manage complexity on behalf of their organizations, customers, and partners.

How?

Through simplification, for one.

They simplify operations and products, but they also increase their dexterity to change the way they work, access resources and enter markets around the world.

In fact, more dexterous leaders can expect to generate 20 percent more of their future revenues from new sources than other CEOs.

In this climate,

Adapt And Evolve

So, as the IBM Industry Summit prepares to get underway here in Barcelona, leaders around the globe may want to review the findings of this important study in more detail (you can get more information on the CEO Study here.)

It provides some excellent food for thought in helping shape your thinking about how you might start to manage your organization’s own complexity, whatever its nature, and it will no doubt set the stage for what should prove to be an informative and insightful week here in Spain.

For those of you following from afar, I look forward to sharing more from the IBM Industry Summit here in this blog throughout the week.

Written by turbotodd

November 8, 2010 at 12:39 pm

Information on Demand 2010, Opening Session Keynote: Gain Insight, Optimize Results

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At this morning’s opening keynote session of the IBM Information on Agenda 2010 event, Robert Leblanc immediately got down to the business at hand: Telling organizations everywhere the basic rules of the road on how to work towards establishing their own effective Information Agenda.

With Blue Man Group-ish performance troup Cobu first setting the agenda for the conference with a beat all its own, Leblanc answered in turn and explained the conference theme: “Gain Insight, Optimize Results.”

Robert Leblanc, IBM VP Middleware for IBM Software, expounds on the opportunities of an information agenda at Information on Demand 2010 in Las Vegas, Nevada.

 

Leblanc is the Senior Vice President, Middleware Software, for the IBM Software business, and opened his comments by citing from the IBM 2010 Global CEO Study, which had three key findings in terms of what CEOs are looking for these days: 1) Embody creative leadership; 2) Reinvent customer relationships; and 3) Build operating dexterity.

Leblanc posed a few key questions to set the stage: How do I share information in more of a two-way manner with my clients?  How can I modify my products and services to better serve clients? How can I draw insight from the organization that is specialized to the client set I’m going after?

In other words, information management professionals, CEOs need your help!

A quick sound byte, related Leblanc: There will be 44X as much data and content over the coming decade, from 800K petabytes in 2009, to 35 zettabytes in 2020.

Yet people are starved for the right info and insight.  More sound bytes:

  • 1 in 3 make critical decisions without the information they need.
  • 1 in 2 don’t have access to the information they need to do their jobs.

Clearly, there’s a gap between information and outcomes.

That’s partially due to the Information Explosion, wherein organizations haven’t aligned their information needs with their business processes, or determined how to make the right information available when and wherever it’s needed throughout the organization.

In short, how to get to one version of the truth.

After being joined by customers CenterPoint Energy and Visa, who explained how their own organizations are using an IBM Information Agenda to get the right information to the right people when and wherever they need it, Leblanc summarized the roadmap for establishing your own Information Agenda.

First, he said, you need to plan an information agenda that aligns with your business decisions.  Second, you need to master your information to ensure it is accurate, relevant, and governed (and with a nod to increasing governance and regulatory requirements around the globe).

And finally, you must work to apply business analytics to anticipate and shape business outcomes, because increasingly, information is going to come from everywhere, requiring a response characteristic of radical flexibility and extreme scalability.

Leblanc summarized that no matter where in the organization you sit — C-Suite, Business Analystcs, Executive — you can take the lead on mapping out and setting your own information agenda.

Students To IBM: Think Local, Act Global

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On the topic of globalization…last week, IBM released results of a first-of-a-kind survey that I’ve been wanting to blog about and share (but am just now getting the bandwidth to get around to).

The survey was part of the IBM 2010 Global CEO Study, but this particular component I want to tell you about was getting into the heads of university students around the globe. 

Think about some of the key current topics: BP oil spill, increased focus and investment in green energy, challenges of a global workforce, physical infrastructure challenges in a time of increased budget deficits, and so on.

Then think about the university students’ reactions and results from the study: They are extremely concerned with issues around globalization and sustainability.

However, only four out of 10 believe that their education had prepared them to address these issues.

Ouch.

Creativity Is Key

It also revealed that both students and CEOs believe that creativity is the most important emerging competency of future leaders.  It also revealed clear confidence about the ability of information technologies to address looming issues in business or society.

I’m certainly seeing that here while in Bangalore, the IT hub of India. 

The study also revealed a decidedly optimistic new ethos, one based on an integrated view of globalization, sustainability, and belief in technology as a path towards solutions for both emerging and existing problems.

Almost 50 percent of students indicated that organizations should optimize their operations by globalizing, rather than localizing, to meet their strategic objectives.

Generation Gap, Data Driven

However, they also described a gap in this generation’s training to cope with issues that will arise in an increasingly interconnected and complex world – which is where their strong belief in IT as a gap bridger came into play.

Students surveyed indicated that they will lean more heavily on data analysis — over gut instinct or existing "best practices" — to reach their strategic and operational goals as business leaders in their own right.

And as fact-based decisions begin to prevail, they may need to pioneer an entirely new management style — one that continually enriches personal experience and education with new sources of insight based on a new ability deal with the explosion of real-time information. 

The study also revealed broad-based confidence that increased access to information, analysis, and the resulting insight can reduce uncertainty about the future.

Clearly, the students’ experience regarding globalization is different. 

Growing up more connected globally, students see the shocks and threats, but are more prone to view globalization as an opportunity to solve increasingly global problems.

They are strongly committed to a global view of shared responsibility for both environmental issues and societal prosperity.

Students, for the most part, shared their views, and even agreed on very specific courses of action: embodying creative leadership, reinventing customer relationships and building more dexterous operating models.

Nevertheless, for all the areas of agreement between students and CEOs, twice as many students selected globalization and environmental issues as one of the top three factors to impact organizations and expected major consequences to business and society from a scarcity of resources.

Bold positions like these came about because students clearly saw that globalization provides an opportunity for organizations to create new value.

Compared to all other regions, the views of students and CEOs on sustainability diverged most sharply in North America.

Students there were almost three times as likely as CEOs to expect scarcity of natural resources to have a significant impact. They were more than twice as likely to select environmental issues as a top external force.

And 60 percent more students than CEOs in this region anticipated that customer expectations for social responsibility will increase significantly. 

The Digital Deluge

Given that today’s students grew up in a digital age, intuitively understanding that economies, societies, governments and organizations are made up of interconnecting networks, it may not be surprising that seven in 10 students experienced the new economic environment as significantly more complex today, compared to six in 10 CEOs. 

But they saw far less volatility and uncertainty, in part because they were confident that access to more information could be put to better use, analyzed for patterns and predictive insights to solve the hardest problems in business or society.

Students who saw significantly more complexity, or interconnectedness in the environment, were 50 percent more likely to expect significant impact from the information explosion and 22 percent more likely to believe that a focus on analyzing information for insight would be key to organizations’ success in the future.

Views about the impact of the information explosion were fairly uniform across regions, except in China where students were 67 percent more likely to see a large impact than CEOs in China. Students in China were also far more likely to approach decision-making analytically, relying on facts more than instinct, or even experience.

Global Thinking, Local Views

Students’ attitudes toward globalization were reflected in their expectations of leadership as well.

Like CEOs, students selected creativity as the top emerging leadership quality for the successful enterprise of the future. But among the nine leadership traits CEOs and students were asked to select, students placed a higher emphasis on only two qualities -– global thinking and a focus on sustainability.

In China, 76 percent of students value global thinking as a top leadership quality, more than students anywhere else. Yet, only 38 percent of students in China believe their education has prepared them for global citizenship, which is lower than students in any other region.

Only 17 percent of students in Japan, less than any other region, believe their education has prepared them well to benefit from the growth of emerging markets.

Understanding these and other sharp differences emerging by geography is increasingly important as economies and societies become more closely linked.

Students will confront these differences as they increasingly become the future leaders of business and organizations.

It’s a set of results both heartening and yet eye-opening. 

If you’d like to read the full results and learn more, visit the IBM Future Leaders site.

Written by turbotodd

June 23, 2010 at 10:02 am

IBM 2010 Global CEO Study: Constant Change Demands Creativity

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While I was out floating in the Caribbean and swimming with the sharks, I missed a key announcement that I always strive to cover in the Turbo blog: The release of the results from IBM’s annual CEO Study.

So, I’m not going to be remiss and miss the one this year!  Better late than never!

If you don’t have much background on the IBM CEO Study, here’s the net: It’s a survey of more than 1,500 Chief Executive Officers from 60 countries and 33 industries worldwide.

This year, the findings indicated chief executives believe that — more than rigor, management discipline, integrity or even vision — successfully navigating an increasing complex world will require creativity.

In a week that finds a continued major oil spill in the U.S. gulf region, as tensions heat up between North and South Korea, as world markets witness continued market volatility due to the European sovereign debt crisis and now the Korean tensions…yeah, complex world, okay.

The IBM CEO Study is conducted through in-person interviews with senior leaders and consultants from IBM’s Global Business Services division.

This year, less than half of global CEOs believed their enterprises are adequately prepared to handle a highly volatile, increasingly complex business environment.

CEOs are confronted with massive shifts – new government regulations, changes in global economic power centers, accelerated industry transformation, growing volumes of data, rapidly evolving customer preferences – that, according to the study, can be overcome by instilling “creativity” throughout an organization.

Witness the graphic below to see more detail on the CEO perspective from this year’s study:

IBM CEO Study Graphic

Industry Focused, Innovation Centric

More than 60 percent of CEOs said that industry transformation is the top factor contributing to uncertainty, indicating a need to discover more innovative ways of managing an organization’s structure, finances, people and strategy.

The study also uncovers starkly divergent strategic concerns and priorities among CEOs in Asia, Japan, Europe or North America – the first time such clear regional variations have appeared in this biennial survey.

“Coming out of the worst economic downturn in our professional lifetimes — and facing a new normal that is distinctly different — it is remarkable that CEOs identify creativity as the number one leadership competency of the successful enterprise of the future,” said Frank Kern, senior vice president, IBM Global Business Services

“But step back and think about it, and this is entirely consistent with the other top finding in our Study — that the biggest challenge facing enterprises from here on will be the accelerating complexity and the velocity of a world that is operating as a massively interconnected system.”

Complexity of the Global Operating Environment: Shoot First, Ask Questions Later

The CEOs interviewed told IBM that today’s business environment is volatile, uncertain and increasingly complex.

Eight in ten CEOs expect their environment to grow significantly more complex but only 49 percent believe their organizations are equipped to deal with it successfully – the largest leadership challenge identified in eight years of research.

The CEOs said that the complexity of an interconnected world is aggravated by a number of factors.

For example, CEOs expect revenue from new sources to double over the next five years, and 76 percent of CEOs foresee the shift of economic power to rapidly developing markets.

Over the last four studies, the expected impact of technology on organizations has risen from 6th to 2nd place in importance, revealing that CEOs understand that technology and the interconnection of the world’s infrastructures is contributing to the complexity they face, and also reveals that they need more technology-based answers to succeed in a world that is massively interconnected.

The study highlights the attributes of top-performing organizations based on revenue and profit performance during the past five years, including the economic downturn.

  • Top performing organizations are 54 percent more likely than others to make rapid decisions. CEOs indicated they are learning to respond swiftly with new ideas to address the deep changes affecting their organizations.
  • 95 percent of top performing organizations identified getting closer to customers as their most important strategic initiative over the next five years – using Web, interactive, and social media channels to rethink how they engage with customers and citizens. They view the historic explosion of information and global information flows as opportunities, rather than threats.
  • Organizations that have built superior operating dexterity expect to capture 20 percent more of their future revenue from new sources than their more traditional peers.

China: Resilient and Rising

Vast complexity is further intensified by regional differences.  The study noted that perspectives varied with geography – differences of opinion about what changes to make, what new skills will be needed and how to succeed in the new economic environment. These regional variations also compound the complexities with which CEOs must contend.

China proved much more resilient than the developed nations during the economic downturn. So, CEOs in China are, understandably, less concerned about volatility than CEOs in other regions.

In fact, they are becoming increasingly confident of their place on the world stage.

But if China is to fulfill its global aspirations, it will need a new generation of leaders with creativity, vision and international management experience.

Many of the country’s CEOs recognize this; 61 percent believe “global thinking” is a top leadership quality. Most companies will also need new industry models and skills. They cannot simply replicate the models they have used in their domestic market, which has a completely different cost structure.

CEOs in China are also devoting far more energy to building new skills and capabilities than their peers in the West.

In North America, which faced a financial crisis that led to governments becoming major stakeholders in private enterprise, CEOs are more wary of “big government” than CEOs elsewhere. A full 87 percent anticipate greater government intervention and regulation over the next five years, compounding their sense of uncertainty.

In Japan, 74 percent of CEOs expect the shift of economic power from mature to rapidly developing markets to have a major impact on their organizations.

By contrast, the European Union is less concerned about this shift, with only 43 percent of CEOs expecting to be impacted.

Understanding these and other sharp differences emerging by region is increasingly important as economies and societies become more closely linked. Organizations confront these differences as they increasingly operate across boundaries and across different regions.

You can learn more and download the full IBM 2010 Global CEO Study here.

Written by turbotodd

May 25, 2010 at 5:48 pm

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