By Rob Starr, Big4.com Content Manager
Deloitte recently released a major survey on the topic of Business Confidence. The Business Confidence Report examines the confidence level of CXOs (C-suite executives) and CXOWs (C-suite executives-in-waiting) on key business issues, including innovation, leadership, and priorities for investment. Jonathan Copulsky CMO, Deloitte Consulting and Global Insights Leader, Deloitte, supplied some email responses to our questions
- Generally, why are CXOs and CXOWs struggling to transform their business in an unstable and increasingly competitive marketplace?
Despite recent market disruptions, an upcoming presidential election in the U.S., and global instability, the C-Suite is largely steady compared to 2014. Our Business Confidence Report reveals that while business leaders are focusing on transforming their organization through innovation, bold leadership and talent, they are still not addressing these opportunities broadly across the organization. Furthermore, in many cases, executives are not aligning investments, incentives and organizational changes with their priorities or integrating strategies across their company.
Interestingly, over the next 12 months, CXOs and CXOWs hold differing levels of confidence in their ability to outperform their competition, with CXOWs being 13 percent less confident than the top brass. CXOs and CXOWs agree on the top reason their companies will outperform the competition: they believe their companies are more innovative than their competitors. Conversely, the executives who lack confidence cite their belief that their competitors are more willing than they are to take risks.
- What are some of the inconsistencies CXOs and CXOWs exhibit when it comes to prioritizing and investing in innovation?
We’re not seeing leaders approach and encourage innovation broadly across their organizations. Many executives prioritize product improvement and customer experience, but only a small portion of leaders (slightly less than 1 in 4) challenge their business or talent models. We are, however, seeing organizations promote innovation through hiring and training of employees – which is ideal.
Many organizations are not looking outside their walls to partner with others (only about 1/3 of CXOs and CXOWs say they’re doing this). Most CXOs (53 percent) say they are also missing opportunities to encourage innovation by aligning incentives like rewards, recognition and compensation with innovation priorities.
- Why are CXOs and CXOWs not exhibiting bold leadership?
When companies take a holistic approach and prioritize investments toward cultivating bold leaders, they position themselves to meet and exceed their business performance expectations. Despite the importance of bold leadership, however, most executives admit their companies are not making necessary investments in cultivating and promoting leaders who exhibit bold leadership traits. Executives show a lack of investment and prioritization (60 percent or below for CXOs) when it comes to incentivizing innovation, training, rewarding risk and mentoring.
Another important piece to this puzzle is that innovation and bold leadership go hand-in-hand. On the leadership front, nearly all survey respondents (97 percent of CXOs and 98 percent of CXOWs) agree that bold leadership is necessary to achieve breakthrough performance. Interestingly – or ironically – many of those same leaders (91 percent of CXOs and 92 percent of
CXOWs) do not feel that they personally are exemplifying bold leadership or that their organization cultivates bold leadership by encouraging risk-taking. The findings show that there is a fear surrounding ‘being bold’ – many leaders don’t yet feel comfortable exhibiting boldness. But in order to achieve that broader business success, they need to change that mindset entirely.
- What is happening to their best talent and why?
New technologies and new ways of working are creating a skills gap. Many companies are unprepared to meet this challenge because they are not investing properly, due to the speed at which technology and markets disrupt the business landscape. Furthermore, a majority of CXOs and many CXOWs (almost half of them) are not prioritizing investments in employee recruitment and retention to address the need for new and different skills at their company. It’s a continuation of the theme that we’ve seen throughout the entire report – the C-suite recognizes problems, but move less quickly in solving them.
To help shrink this skills gap, according to our Global Human Capital Trends 2016 report, companies are leveraging people analytics and workforce data to address challenges with finding and retaining highly skilled talent. Companies need to get serious about making the proper investments in technology to better understand what makes people join, perform well, and stay with their organizations. They’ll also need more integrated infrastructures that will enable them to better predict who will be their star players, who will make the best leaders, and what it takes to deliver the highest quality customer service and innovation.
- What’s in the future?
Now is the time to invest in innovation. The Business Confidence Report shows that there are opportunities to look at business and talent models to support performance and growth. Only 26 percent of CXOs and 24 percent of CXOWs say they are selecting organizational and operational models to innovate, while 26 percent of CXOs and 20 percent of CXOWs say they select business processes. Companies need to get serious about making the proper investments across their organizations – and gain a better understanding around what makes people join an organization, perform well, and stay there.