A FEW THOUGHTS 1) there is no time and space for business as usual approach - businesses need to be creative and target new buyers and remain relevant to their existing clients 2) dramatic changes in how we communicate, behave, live and what we expect from one another - directly connected with marketing communications trends 3) new emerging generation - Millennials - is bringing new characteristics that are becoming common for all generations 4) each diversity group has diverse members - we go to the level of individuals and people-to-people marketing enabled by social media and digital 5) businesses need to be prepared to serve diverse clients and offer unique client experience (new target groups: gay couples with children, gay vs. metrosexual fashion preferences, wedding industry)
This report is IBM’s first study of the entire C-suite — and the 17th in the ongoing series of CxO studies developed by the IBM Institute for Business Value. We now have data from more than 23,000 interviews stretching back to 2003. Our latest study draws on input from: Chief Executive Officers (CEOs) 884 Chief Finance Officers (CFOs) 576 Chief Human Resources Officers (CHROs) 342 Chief Information Officers (CIOs) 1,656 Chief Marketing Officers (CMOs) 524 Chief Supply Chain Officers (CSCOs) 201
As with our prior studies, this one is based on in-depth, in-person conversations. We sat down with 4,183 leaders in 70 countries. What we discovered underlines how rapidly change is sweeping across business and society.
We asked which external forces CxOs think will most affect their enterprise in the next three to five years, and compared the results with our findings from earlier studies. One of the most notable trends has been the steady rise in the importance attributed to technology. CEOs put it first, as they did in 2012. For them, technology is not just part of the infrastructure needed to execute a business strategy. It’s what makes entirely new strategies possible.
Other CxOs have different priorities. Although all include technology in their list of the top three forces, their views reflect their respective areas of focus: CFOs fret most about macroeconomic factors. CIOs, CMOs and CSCOs put more emphasis on market factors, While CHROs see people skills as the biggest issue. Is this a troubling disconnect? Not as long as the lines of communication are open. CEOs in outperforming organizations told us their teams work particularly well together. That enables them to create substantial advantage by integrating multiple perspectives.
The most progressive enterprises analyze social data to understand customers’ core values and what’s happening in their lives. Such attributes, when well understood, lay the base for customer experiences tailored to the individual. They get us closer to cracking the “social genome”: the traits that make each of us uniquely human. And outperformers show the way. CxOs in these enterprises are 29 percent more likely to plan on spending more time crafting engaging customer experiences.
This is surprising, given that 76 percent of CxOs aspire to know their customers better. Watson’s analysis exposed the urgency that’s driving the C-suite: rising customer expectations, decreasing tolerance, the limited insights face-to-face contact with customers provides.
When we published our first study in 2004, CEOs ranked their own customers sixth on the list of all market factors they believed would drive the most change in their organizations. Today, digitally enfranchised and empowered customers lead the agenda for every CxO profession. More than half of CxOs say customers now have a considerable influence on their enterprises.
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.
And its making many leaders sit up, rethink and take action in order to meet the changing expectations of customers. Our 2012 C-suite studies tell us that 73 percent of CEOs are prioritizing investments in customer insights 82 percent of CMOs plan to increase the use of social media 74 percent of CIOs say mobile solutions are part of their vision for increasing competitiveness 70% of CSCOs identify supply chain visibility as the top challenge in delivering on their agendas These are high percentages that are dramatically shifting the way companies are thinking about their strategies – and it all spells changes to the back office to make the necessary changes to engage with customers. Sources: 2012 IBM Global CEO Study 2012 IBM Global CMO Study 2012 IBM Global CIO Study- 2009 IBM Global CSCO Study
Main point: Watson was built to address this gap. What could YOU do with the power to not just access the world’s information, but the power to harness it to generate real-time solutions to painfully difficult, non-intuitive problems. What would your organization do? Would you grow faster? Respond more quickly and accurately? Spot hidden opportunities? Satisfy customers more fully? Make your citizens’ lives better? Save patients’ lives? Further speaking points: Watson breaks through the barriers of human to machine interaction to usher in a new generation of technology; one that is more natural and intuitive for the user and more useful in assisting the way we work. Additional information: The result is a much more “human-like” experiences of using a computer as an assistant to help retrieve, analyze and interpret vast amounts of information. IBM's Watson Set To Revolutionize Marketing When a computer can figure out whether a movie trailer is going to positively affect an audience or not – it makes you wonder how close we are to computer generated predictions on everything else in life. The short answer, according to Michael Karasick, IBM’s VP and Research Director at Almaden Labs, is that IBM IBM +0.58%’s Watson is already making them. Since conquering “Jeopardy” and Chess, Watson has been focused on predictive healthcare, customer service, investment advice and culinary pursuits. But they are not stopping there, IBM is allowing select customers to use “Watson as a service” and may soon open it up to developers to build Watson apps. Yes, the Watson technology is still maturing, but I am convinced that within five years the Watson platform will learn faster and make better predictions with each new field it understands. That’s because, as Karasick told me, “If you train a system like Watson on domain A and domain B, then it knows how to make the equivalence between terminologies in different domains.” That means as Watson solves problems in chemistry; it can generate probable solutions in Physics and Metallurgy too. Imagine how this might be applied to marketing. By using Watson as a service, a business could train Watson to understand its customers, then use predictive models to recognize new products or services that their customers will buy. Here’s how Watson can revolutionize marketing Predict new trends and shifting tastes Watson is a voracious consumer of data, and it doesn’t forget anything. You can feed it data from credit cards, sales databases, social networks, location data, web pages and it can compile and categorize that information to make high probability predictions. And most shockingly, Watson is well ahead of its competitors in sentiment analysis. According to Karasick, Watson can recognize irony and sarcasm – and properly apprehend the intended meaning. That means Watson can quickly analyze large sample sizes to determine whether a movie trailer, product offering or clothing line are going to work with consumers. Analyze social conversations – generate leads Most social listening solutions on the market today do an adequate job of giving the marketer signals and reports about their industry, competitors, partners and current customers. But it’s up to the marketer to analyze the information and take action. As Watson has demonstrated in other domains, it can foreseeably predict what information is most important and make recommendations on how to act on it. For example, if it finds a cluster of people discussing problems that the marketer’s solution solves, Watson can automatically notify the sales team or take action on its own to educate the prospective customers. Determine whether a new innovation will sell or not Because Watson can learn from one domain of knowledge and make high probability predictions in another, it’s reasonable to assume that if a company wanted to understand whether a new innovation will sell or not, Watson could analyze a company’s current market and customer base to provide success probabilities. We’re a long way off from a Watson with the taste of a Steve Jobs, but if it has enough understanding of the situation, it can produce insights that can give companies a clearer picture of the opportunities and threats. Computer calculated and automated growth hacking If you’re a marketer and not familiar with growth hacking, please study up fast. Growth hackers focus on innovative A/B testing techniques to maximize conversions on emails, websites, social media, online content or just about any digital media available to them. It’s a low cost but more effective alternative to traditional media. I can see how Watson could proactively and intelligently test, measure and optimize digital content, ads, website pages even a company’s product to efficiently maximize customer growth. Andy Johns of Greylock, formerly a growth hacker for Facebook FB -3.08%, Twitter and Quora told me that Facebook conducted 6 hacks a day to maximize growth opportunities. I suspect Watson could easily handle 10 times that amount. This clearly is the digital march of progress. Watson has the potential to eliminate ineffective marketing, improve good marketing to great marketing, and to predict how to better spend marketing dollars in the future. Put it all together and you’ve revolutionized marketing.
This comprehensive point of view can only come from one company. We are the only company in the marketplace that takes each of these dynamics into account as we provide solutions today and in the future.
But encouraging others to collaborate isn’t enough. The members of the C-suite must also pull together. We asked CxOs which two C-suite colleagues they work most closely with. Their answers illuminated the intricate relationships that exist within the boardroom. As a result of the additional insights they provided when we interviewed them, we also uncovered the core elements of success. Among other things, we discovered that one of the features that distinguishes outperforming from underperforming enterprises is how well the C-suite works together as a team.