The business growth remains the top priority for a majority of CEOs, but there is a recognition that growth has become harder to achieve. A new survey from Gartner revealed that CEOs and senior IT executives were shifting their focus to digital business to accelerate the growth.
Gartner surveyed 460 CEOs and senior business executives around the world in fourth quarter of 2017, and examined their business perspectives for 2018 and 2019.
“Although growth remains the CEO’s biggest priority, there was a significant fall in simple mentions of it this year, from 58 percent in 2017 to just 40 percent 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.”
- Digital transformation— a top priority for next two years
Following business growth (40%), the Corporate (33%) and IT (31%) were the top priorities of CEOs. The corporate category includes a number of actions like corporate partnerships, new strategies, mergers and acquisitions, etc.
In IT category, CEOs cited digital transformation, in particular, as a top priority for next two years.
In 2017, the workforce category was ranked seventh in the list of CEO’s priorities, but it has jumped to fourth rank now. Only 16% CEOs had mentioned workforce among their top three priorities in 2017, which has now increased to 28%.
- 61% CEOs to increase spending on IT in 2018
The use of word ‘digital’ is steadily rising among the CEOs. According to Gartner, only 2.1% CEOs used this word at least once when describing their top business priorities in 2012. This has now risen to 13.4% for the same question.
The rise in use of word digital is because of the rapidly increasing investment on IT. 61% of the survey respondents expected to increase their spending on IT in 2018.
On the other hand, 32% had no plans to increase IT spending, whereas only 7% expected to reduce it.
- CEOs cite culture change a key factor to growth
Culture change, a point not missed by CEOs implementing digital initiatives, is a key factor to growth especially when it is driven through structural development. According to Gartner, 37% of CEOs believed that a deep culture was needed by 2020.
However, the proportion in need of culture change reached 42% when the companies undergoing digital transformation were compared with those that don’t.
“These survey results show that if a company has a digital initiative, then the recognized need for culture change is higher,” said Mr. Raskino. “The most important types of cultural change that CEOs intend to make include making the culture more proactive, collaborative, innovative, empowered and customer-centric. They also highly rate a move to a more digital and tech-centric culture.”
- Top restrictions to business growth
CEOs cited lack of talent and workforce capability as the top restrictions to their business growth. To adopt the digital initiatives and new technologies in the organizations, skills and talents are the must needs. But, the lack of talent are preventing organizations from keeping up with speed of change.
- Majority of CEOs have transformation programs in place
To make the business more digital, 62% of the respondents said that they had a management initiative or transformation program in place.
For 54% of the respondents, the objective of digital business initiative was transformation. The remaining ones described it as business optimization.
Another interesting finding of the 2018 CEO survey is that more number of CEOs think of their companies as innovation pioneers. The number has increased from 27% in 2013, to 41% in 2018.