Growth is the number one priority of CEOS in 2018 and 2019 and, to help achieve it, they are shifting their focus to embrace digital business, according to a recent study.
The Gartner 2018 CEO and Senior Business Executive Survey found that as simple, implemental growth becomes harder to achieve, CEOs are concentrating on changing and upgrading the structure of their companies. This also includes forming a deeper understanding of digital business.
In total, 460 business leaders in organisations with more than $50m in annual revenue were qualified and surveyed.
The findings show IT remains a high priority, coming in at third position, with CEOs highlighting digital transformation, in particular. Workforce has risen rapidly to become the fourth-biggest priority, up from seventh in 2017.
The number of CEOs mentioning workforce in their top three priorities rose from 16 per cent to 28 per cent. When asked about the most significant internal constraints to growth, employee and talent issues were at the top.
CEOs cited lack of talent and workforce capability as the biggest inhibitor of digital business progress.
“Although growth remains the CEO’s biggest priority, there was a significant fall in simple mentions of it this year, from 58 per cent in 2017 to just 40 per cent in 2018. This does not mean CEOs are less focused on growth, instead it shows that they are shifting perspective on how to obtain it,” said Mark Raskino, vice president and Gartner fellow.
“The ‘corporate’ category, which includes actions such as new strategy, corporate partnerships and mergers and acquisitions, has risen significantly to become the second-biggest priority.”
Survey respondents were also asked whether they have a management initiative or transformation programme to make their business more digital. The majority (62 per cent) said they did. Of those organisations, 54 per cent said that their digital business objective is transformational while 46 per cent said the objective of the initiative is optimisation.
In the background, Gartner reports, CEOs’ use of the word ‘digital’ has been steadily rising. When asked to describe their top five business priorities, the number of respondents mentioning the word digital at least once has risen from 2.1 per cent in the 2012 survey to 13.4 per cent in 2018.
This positive attitude toward digital business is backed up by CEOs’ continuing intent to invest in IT. Three-fifths (61 per cent) of respondents intend to increase spending on IT in 2018, while one third (32 per cent) plan to make no changes to spending and only seven per cent foresee spending cuts.
The 2018 CEO survey showed that the percentage of respondents who think their company is an innovation pioneer has reached a high of 41 per cent (up from 27 percent in 2013), with ‘fast followers’ not far behind at 37 per cent.
“CIOs should leverage this bullish sentiment by encouraging their business leaders into making ‘no way back’ commitments to digital business change,” added Raskino.
“However, superficial digital change can be a dangerous form of self-deceit. The CEO’s commitment must be grounded in deep fundamentals, such as genuine customer value, a real business model concept and disciplined economics.”