IBM’s CEO Study: 6 Hard Truths CEOs Must Face is a roadmap for CEOs—but also a guide for thought leaders about how to engage with transforming companies. The report’s main conclusion is that agility and adaptability are essential, with the ability to pivot to address new risks. Thought leaders need to show CEOs how they can help build that agility and support the communication of a clear, coherent vision.
The headlines for thought leaders: what you need to know
- The complexity of the current climate means that agility and flexibility are the most important characteristics for any company.
CEOs are currently navigating an enormous amount of complexity. They recognise that they cannot predict the future, and that the next breakthrough could create unexpected customer demands. This means that their focus is on creating agility and flexibility, not tying the company into an outdated model of any kind. Thought leaders need to show how they can help build that flexibility and future-proof the company. Crucially, they must translate tech complexity into clear business outcomes.
- CEOs are prepared to take risks, but the risk must fit the strategic vision
The best CEOs are crafting a compelling strategic vision to show their colleagues and employees the direction of travel. Their challenge is to navigate the realities of the moment while still holding that vision. They are prepared to take risks—and often quite extreme risks. However, they know the risk must be set within the context of their vision. Thought leaders must understand the strategic vision and help CEOs to see how they can move towards it in a concrete way, including through supporting employee adoption of technology.
- Collaboration and constructive dialogue are important, both internally and externally
The best CEOs are encouraging collaboration within a framework of creative tension to support innovation. This applies both internally, within the C-suite, and with partners; choosing the right partners is essential. Thought leaders must position themselves and their companies as the ‘right partner’ by being prepared to challenge outdated assumptions, offer alternatives that fit the vision, and engage with the whole C-suite, not just IT.
The supporting evidence
The IBM report CEO Study: 6 Hard Truths CEOs Must Face provides a summary of the findings of this year’s CEO survey and then highlights six important issues for CEOs.
Overall, CEOs believe that generative AI is transformative, with 59% saying competitive advantage depends on who has the most advanced generative AI. Two-thirds of CEOs say that they will accept significant risk to pursue productivity gains. Similar numbers are prepared to take more risks than their competitors to stay ahead. Priorities and challenges are changing rapidly, with product and service innovation taking the top spot among the priorities, and business model innovation seen as the top challenge.
The report goes on to distinguish what top CEOs are doing differently. From these findings, it distils six hard truths for CEOs. These are
Your team isn’t as strong as you think – “No matter how good a team is today, it isn’t good enough to compete tomorrow”. An estimated 35% of the workforce will need retraining within three years, and many CEOs overestimate their team’s readiness for AI despite major skills gaps.
The customer isn’t always right — customers cannot predict what they will want tomorrow because they don’t know what will be available. The ‘next big thing’ could change everything. Product and service innovation must be a priority, drawing on data and generative AI to identify new opportunities.
Sentimentality is a weakness when expertise is in short supply—companies cannot afford to keep working with comfortable but underperforming partners. The way forward is to develop symbiotic relationships with fewer but higher-performing ecosystem partners.
Sparring partners make the best leaders – You need constructive debate within the C-suite—but not conflict. CEOs must set the ground rules to deliver collaboration within a context of constructive tension.
People hate progress – Employees often see AI as a threat, or something that is being done to them, not a tool for them. Adoption will depend more on workforce buy-in than on the technology itself. Training, vision, and governance must evolve in tandem to support adoption.
Tech short-cuts are a dead end – Short-term gains should not come at the expense of long-term infrastructure. Top CEOs invest in robust digital foundations rather than piecemeal fixes.