IBM Survey: CEOs Say They Can't Handle Growing Business Complexity

Only 49 percent of responding CEOs think their organizations are prepared to deal with a more complicated business environment.

Many CEOs are doubtful  their enterprises can handle a volatile, increasingly complex business environment, according to an IBM survey being revealed on Tuesday.

CFOs to CIOs: You Work for Me Now

The biennial IBM Global CEO Study was conducted late last year and early this year and featured interviews with 1,541 CEOs, general managers, and senior public sector leaders from 60 countries and 33 industries worldwide. Eight in 10 CEOs, the survey found, expect their environment to grow more complex, while only 49 percent believe their organizations are equipped to deal with it, IBM said. This factor represented the largest leadership challenge identified in eight years of research, IBM said.

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"Less than half feel prepared for the complexity ahead," said Ragna Bell, a partner in the IBM Strategy & Change Consulting group. Successfully navigating an increasingly complex world will require creativity, IBM said.

Overall, the expected impact of technology on organizations has risen from sixth place to second place in the last four studies.

The survey also found that in North America, CEOs are more wary of "big government" than elsewhere. This follows on the heels of governments becoming major stakeholders in private enterprises after the recent financial crisis. Some 87 percent of CEOs surveyed in North America anticipate greater government intervention and regulation in the next five years, thus compounding a sense of uncertainty.

North American executives demonstrated "a very strong sense that increased government is impacting their environment,"  Bell said. But the executives were not queried about whether they thought more government was good or bad.

"We did not ask them for value judgments," she said.

Complexity of an interconnected world is exacerbated by different factors, IBM said. Seventy percent of CEOs in the study said they have to double revenue from new sources in the next five years, while 65 percent foresee a shift of economic power to rapidly developing markets.

In other findings:

  • Top-performing organizations are 54 percent more likely than others to make quick decisions and predict outcomes
  • Ninety-five percent of top-performing organizations cited getting closer to customers as their most important strategic initiative for the next five years, using Web, interactive, and social media channels to rethink engagements with customers and citizens
  • Having proven more resilient than developed nations during the economic downtown, CEOs in China are less concerned about volatility than CEOs in other regions

Executives were not asked about technological preferences.

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