IBM knows what your CEO is thinking—Do you?

October 23, 2012 Darcy Jacobsen

Every two years for the last decade, IBM has sat down with CEOs from around the world to get their ten cents on coming challenges and emerging trends. Recently we looked through the 2012 report and were interested to find that many of the issues on CEOs’ minds are ones that are already critical to HR.

The main thrust of this year’s Global IBM CEO Study—based on face-to-face conversations with more than 1,700 chief executive officers in 64 countries—is that companies and execs can no longer operate in isolation. We must humanize, and we must connect: with our customers, with our partners and—probably most critically—with our own employees. In fact, the three chapters of the report are entitled:

  • Empowering employees through values
  • Engaging customers as individuals
  • Amplifying innovation with partnerships

Chart of key values towards economic value

CEOs see human capital, customer relationships and innovation as
key sources of sustained economic value.

What is driving this change? The new connectedness of business itself, via technology.

Our connected era, IBM argues, is changing how people engage, and places “an overwhelming focus on changes in how people engage with the organization and with each other.” Outperforming companies, says IBM, are those who have surpassed industry peers in terms of revenue growth and profitability—and those companies are proving to be the most adept at re-orienting themselves in the face of a more open, more connected world.

CEOs now see technology as an enabler of collaboration and relationships. […] It’s providing novel ways of inspiring employees’ individual and collective creativity, and revolutionizing how teams collaborate, make decisions and get work done. Simply put, technology is reinventing connections.

Of course, partnerships and customers are important in the big picture. But those of us with an eye for HR will tend to naturally focus on the first chapter of the report—Empowering Employees. I thought I’d sketch out some of the highlights, starting with the overarching finding:

CEOs have a new strategy in the unending war for talent: They are creating more open and collaborative cultures—encouraging employee to connect, learn from each other and thrive in a world of rapid change. Collaboration is the number one trait CEOs are seeking in their employees, with 75 percent of CEOs calling it critical.

Along the way, says IBM, CEOs are seeking ways to provide more transparency and openness within their organizations, and finding new ways to inspire workers to interact and build collaborative, knowledge-sharing relationships, thereby “turning the workforce into a market intelligence network”. This transparency means loosening some control—but many CEOs plan to correct for that with a renewed emphasis on company values. According to the report:

Openness puts a premium on corporate culture: As CEOs ratchet up the level of openness within their organizations, they are developing collaborative environments where employees are encouraged to speak up, exercise personal initiative, connect with fellow collaborators, and innovate. Equally important, CEOs recognize the need for organizational values and a clear sense of purpose to guide decisions and actions as some formal controls loosen. Clearly, openness increases vulnerability. The Internet — especially through social networks — can provide a worldwide stage to any employee interaction, positive or negative. For organizations to operate effectively in this environment, employees must internalize and embody the organization’s values and mission.

Chart of popular organizational attributes

To build open, yet secure environments, CEOs are most focused on three organizational attributes.

The changes wrought by technology are also putting pressure on how we hire, says IBM. Rather than seeking skill sets, CEOs are talking about seeking personal qualities. “Today, it’s virtually impossible for CEOs to find the future skills they will need — because they don’t yet exist,” says the report. CEOs seek employees who are able to constantly reinvent themselves to meet challenges. Comfortable with change, these workers learn as they go, and are highly collaborative.  As one CEO explained: “Today’s connected economy is full of ambiguity, and the characteristics required to navigate that ambiguity are collaboration, creativity and communication.”

How are CEOs tackling this challenge? By turning to technology. “To connect with the new generation of employees,” said a CEO, “we will need to change communication methods. We are the e-mail generation; they are the social network generation.”

To this end, CEOs are contemplating different management systems and organizational structures. “In a rapidly changing environment, we must foster free communication and eliminate layers to maintain speed,” said one CEO from Japan. Added another: “We need to blow up the hierarchy so ideas can flow up more easily.”

IBMs rounded out the report with some Key Recommendations. Here are the relevant ones to empowering employees:

Empower Employees through Values

For CEOs, organizational openness offers tremendous upside potential — empowered employees, free-flowing ideas, more creativity and innovation, happier customers, better results. But openness also comes with more risk. As rigid controls loosen, organizations need a strong sense of purpose and shared beliefs to guide decision making. Teams will need processes and tools that inspire collaboration on a massive scale. Perhaps most important, organizations must help employees develop traits to excel in this type of environment.

Replace rulebooks with shared beliefs.

  • Confront cultural reality.
  • Build values employees will live out.
  • Recalibrate controls.

Build future-proof employees.

  • Create unconventional teams.
  • Concentrate on experiential learning.
  • Empower high-value employee networks.

Provide the means to collaborate at scale.

  • Pursue social collaboration technologies.
  • Devise incentives that foster collaboration.
  • Re-imagine the employee “suggestion box.”

Interesting stuff for any business leader, and most especially for HR. But if your CEO isn’t thinking about these issues, it might be time to bring them up.  Find the entire IBM report here. For ways to build engagement, openness and teamwork that is based on your values, well, just keep reading this blog.  ; )

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