CEOs must think broadly, act personally and manage the innovation mix to make the business model deeply different. Ignite innovation through business and technology integration.
A few years from now, most business organizations in the world would be unrecognizable from the way they do business and perhaps even from their products line-up, a new survey predicts. A research study by IBM which polled 765 CEOs, business executives and public leaders, found that two out of every three expected fundamental changes in their organizations over the next two years.
In what appears to be an affirmation of an Austrian economist Josephâ€™s theory that innovative and creative destruction would be at the cornerstone of modern economies. Decision makers have overwhelmingly confronted the truth that CEOs must personally orchestrate innovation, establishing conditions that ignite innovative ideas and driving their execution.
â€œThink big and bold. Our future depends on it,â€? IBM says in the report that identifies collaboration, partnering and technology integration as inexorably linked to innovation.
The setting is the rise of new economies like China and India, technological advances, intensified competition and globalization. The forces overturning the status quo are many and varied. At the top of their list, CEOs mentioned market forces such as intensified competition, escalating customer expectations and unexpected market shifts.
The way the world is changing is at the back of their minds. China and India combined graduate half a million engineers and scientists annually, as compared to about 134,000 in the US. China is now home to more than 100 automakers. In 2005, the combined GDP of emerging economies increased by $ 1.6 trillion, $200 billion more than the developed world combined.
Demographic shifts are playing their part too. Between 2000 and 2050, the percentage of the world population of 60years of age or older is expected to double to over 20% a trend that is even more pronounced in Europe and North America, where the above-60 age group will account for about 35% and 27%, respectively.
CEOs see the change as both reasons and license to expand their innovation horizon to pursue less traditional forms of innovation, to look high and low, outside and in, for innovative ideas and to accept greater personal responsibility for fostering innovation within and beyond their organizations, IBM said.
The survey also revealed that a team-oriented, collegiate environment was critical to organizations, but 77% of the CEOs interviewed agreed that it was also important to recognize contributions made by individuals.
IBMâ€™s analysis has thrown up a financial correlation associated with the choice. While many factors can contribute to financial performance, companies that reward individual contributions achieved 2% higher operating margins on average and grew revenue nearly 3% faster than those that did not.