)
The boardroom secret is out: It is now about customer-activating enterprises, open collaboration and delivering superior experience.
At the heart of this lies a deep understanding and focus on the customer as an individual, rather than as a category or a market segment. In an era of abundant connectivity and information, and ubiquitous digitisation, the new economic equation favours transparency. In search of innovation, more than half of CXOs expect to open up their enterprises, bringing down barriers to extend collaboration inside and outside. Their most radical shift is a new view on what it means to collaborate with customers.
According to the Global C-suite Study 2013, the largest of its kind ever, conducted by the IBM Institute for Business Value, based on face-to-face conversations with over 4,000 C-suite leaders across 70 countries including India, CEOs are opening up to customer influence, fusing the digital with physical, and crafting superior customer experience.
These three predominant themes are merging to create competitive advantages for early adopters of what we call the Customer Activated Enterprise with customers being "new" business advisors. Three out of five C-suite leaders look to direct, meaningful and fundamentally different view to customer engagement to drive agendas and 90 per cent of senior leaders expect deep collaboration with customers in the next five years.
CEOs consider technology the single most important external force shaping their organisations. Other CXOs also see it as one of the top three factors. The members of the C-suite are likewise united in believing that an entirely new set of dynamics is emerging. Customers and citizens expect to be treated as individuals, which means knowing what makes each of us tick: our values, beliefs, habits and quirks. That, in turn, requires much closer collaboration between organisations and the people they serve.
Most CXOs recognise that what applies to customers and citizens applies to employees and partners, too. They envisage that organisational boundaries will become far more porous, enabling greater collaboration with employees and partners to accelerate innovation. They also anticipate sourcing more of that innovation from outside. Where once an enterprise could go alone, and be successful doing so, it must now collaborate.
For sure, leaders are viewing customers as key stakeholders in determining their future and embracing a more dynamic and collaborative model of working. Today, while about 43 per cent of the CEOs include customers in the development of business strategies, this number is expected to reach 60 per cent in the next three to five years. In search of innovation and transparency, over half the C-suite executives plan to embrace open, collaborative models beyond their company's borders with customers, and actively engaging customers, beyond products and services, up to assisting in the development of corporate business strategy.
One of the key shifts leaders are witnessing is that the intersection between the digital and physical world is fast becoming the leading edge of innovation. The emergence of social, mobile and digital networks has played a big part in democratising the relationship between organisations and their customers. It is also forcing them to rethink how they work.
Smart pills and smartphone heart monitors, intelligent vehicles and crowd-sourced traffic routing, books that respond to a reader's location and apps that enhance the in-store experience: the possibilities are enormous. Indeed, with 3-D printing, the very distinction between the virtual and material is evaporating. That, as CXOs realise, means it is becoming increasingly important to meld the two dimensions. CMOs, in particular, consider it critical to put the components of a strong digital strategy in place. They want to overhaul every aspect of the customer interface. Some 60 per cent of CXOs now look to partners who will have an equal hand in creating business value. And almost half are sourcing innovation from the outside.
Leaders are realising how important it is to blend these two worlds, to win and succeed in the new normal. While successful organisations are fusing the digital with the physical to transform their organisations, only 36 per cent of enterprises have an integrated strategy in place. The good news is large number of C-suite leaders intend to use digital channels more extensively to engage with customers in the future, and they've already embraced the shift.
There is a strong correlation between companies that succeed and their levels of external collaboration. About 54 per cent leaders believe customers must be understood and engaged as individuals rather than categories or market segments. And 76 per cent of CXOs hope to understand their customers much better in the future. Some organisations are literally pulling customers into their boardrooms to drive stronger collaboration.
Customer advisory boards are gaining popularity among smart enterprises as a means to involve customers to set strategic direction, share best practices, better understand market segments and fine tune business models. Increasingly, these boards serve as an instrumental vehicle to provide direct input across the customer lifecycle, from defining the customer opportunity to influencing go-to-market plans. To forge customer intimacy, businesses are relying on digital technologies to boost engagement, create dialogues and provide a superior experience.
These enterprises realise that the groundswell of opinion and innovation being shared on social sites, blogs, text chats and the like is tantamount to customers banging at the door and demanding to be heard. Savvy leaders know that online input is a vital part of the discourse and have plumbed their organisations to listen closely.
Accepting customers as stakeholders in determining an enterprise's future has huge cultural and organisational implications. These businesses can't just be customer-centric. They must be customer-activated. This requires creating fully reciprocal relationships with customers. It means being ready and willing to change course to pursue those paths that create mutual value. And, it requires finding ways to include customers in key decisions.
Indeed, the speed at which CEOs are opening the doors to enable collaboration is extraordinary. A significant number have taken steps to make their enterprises more transparent in the recent past. And more than half claim customers now have a major influence on their organisations.
In brief, leaders' priorities are shifting from intra-enterprise efficiency and productivity to a new agenda led by the front office and focused on extra-enterprise engagement, transparency, collaboration and dialogue with audiences and all the individuals within them.
This is much more than customer centricity and requires a change in mindset, culture and operations that dwells on a high level of commitment. And this goes beyond being trusted partners and being essential. For sure, it is a race to the finish. The companies that best understand all aspects of the value chain and get a 360-degree view for the customer experience will win. This is the hallmark of our era - and the driver of numerous possibilities.
But what will CEOs do with this defining characteristic? How will they create value from it - for their customers, their employees, their partners and, by extension, their organisations? Individually, those choices will dictate the success of their organisations. Collectively, they will inspire our future.
Are we ready to transform the future?
Jeby Cherian
Vice-President & Managing Partner, Global Business Services, IBM India & South Asia
Vice-President & Managing Partner, Global Business Services, IBM India & South Asia
