Growth is the number one priority of CEOs for 2018 and 2019, according to new data from Gartner’s recent 2018 CEO and Senior Business Executive Survey.
The report surveyed 460 CEO and senior business executives from in the fourth quarter of 2017. These executives came from organisations with more than $50 million in annual revenue and were questioned on their key business issues, as well as areas of technology agenda impact.
The survey found that as simple, implemental growth becomes harder to achieve, CEOs are concentrating on changing the structure of their companies with 63% of CEOs stating they are likely to change their business models between 2018 and 2020.
However, vice president and Gartner Fellow Mark Raskino says that this does not mean CEOs are less focused on growth, instead, it shows they are shifting their perspective on how to obtain it.
"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."
Other priorities include “IT”, which remains of high concern in third place with CEOs identifying “digital transformation” as a key focus in particular.
“Workforce” has risen rapidly this year to become the fourth-highest priority, up from seventh in 2017. The number of CEOs mentioning workforce in their top three priorities has jumped from 16% to 28%.
When asked about the most significant internal constraints to growth, “employee and talent issues” were at the top. CEOs said a lack of talent and workforce capability is the biggest inhibitor of digital business progress.
Moreover, the report breaks down three top-of-mind concerns for executives:
A key component of digital transformation is cultural change.
Although CIO survey respondents agreed it was a very high priority concern, only 37% of CEOs said a deep or significant cultural change would be need by 2020.
However, the findings do show that if a company has a digital initiative, the recognised need for cultural change is higher than those that don’t, explains 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."
The majority of respondents (62%) state they do have a management initiative or transformation program to make their business more digital.
In the background, the use of the word ‘digital’ is on the rise, the report finds. When asked to describe their top five business priorities, the number of respondents mentioning the word digital at least once has risen from 2.1% in the 2012 survey to 13.4% in 2018.
In addition, this positive attitude toward digital business is backed up by CEOs' continuing intent to invest in IT. 61% of respondents intend to increase spending on IT in 2018, while 32% plan to make no changes to spending and only seven percent foresee spending cuts.
The number of CEPs that think their company is an “innovation pioneer” has jumped to 41% from 27% in 2013.
Raskino adds, "CIOs should leverage this bullish sentiment by encouraging their business leaders into making "no way back" commitments to digital business change.”
"However,” warns Raskino, “superficial digital change can be a dangerous form of self-deceit.”
“The CEO's commitment must be grounded in deep fundamentals, such as genuine customer value, a real business model concept and disciplined economics."