How can today’s leaders realize tomorrow’s opportunities?

A focus on ecosystems

Integrating into ecosystems will be a defining feature of the future successful enterprise. Over the past several years, we have seen industry boundaries erode and threats emerge from non-traditional competitors. Increasingly companies are shifting to “coopetition,” cooperation between competing companies, as well as adopting ecosystem business models in an effort to deliver superior customer value and achieve market leadership. 

Nathan Furr, Professor at INSEAD, observes: “One of the ways we'll see value created is by being able to go over the boundaries of the firm to work really fluidly and co-create with an ecosystem of partners and sometimes even with uncommon partners. These are the kind of firms you never even think about working with, they might actually have best-in-class solutions for you and are likely the most innovative organizations.

The CEO respondents in our survey largely affirm the growing importance of ecosystems, with 88% agreeing the ability to lead and manage ecosystems will define successful leadership teams. And being embedded in ecosystems emerged as the second most important characteristic of the successful future enterprise. 

Leading with compassion, setting an example of experimentation and risk-taking, and driving a transformative mindset across the company emerged as the top three characteristics of the most effective CEOs to manage the challenges and opportunities over the next five years and beyond. In addition, 89% of respondents agree the CEO must lead disruptive innovation and business reimagination, while 80% agree establishing stakeholder trust will become an increasingly important part of the CEO’s job

Although CEOs show willingness to transform for these new imperatives, gaps remain in their organizations’ capabilities, focus areas and translating intent into action (explore a detailed discussion of these gaps in our first article).

From the long-term value “say-do” gap to the continuing challenge of digital transformation, and from underinvestment in ecosystems, the data trust chasm and the climate blind spot, leaders face significant barriers to evolving and acquiring the characteristics of the future successful enterprise.

So, how CEOs and C-suite leaders formulate, orchestrate and reframe their organizations for the future? We recommend CEOs and their teams work backward and plan their future strategy by embedding three core interconnected value drivers: putting humans at the center, leveraging technology at speed, and driving innovation at scale.

Embracing these value drivers, while building agility into the ethos of organizational culture, allows companies to create exponential value, equipping them to pivot and respond quickly to future existential risks and drive long-term stakeholder value. “By grounding in these critical value drivers, organizations can ensure that transformation efforts connect across the enterprise, which is what thrivers always do,” said former EY Global Consulting Transformation Leader Bill Kanarick.

Human centricity

At its core, successful transformation must be driven by the desire to improve the human experience. The best laid strategies can come to nothing without the right talent and mindset to execute on it. The most advanced innovations or cutting-edge technologies can fail if they lose sight of human values. As leaders advance their strategies, they must view every decision, every technology implementation, and every product or service innovation through the human lens. 

Companies need to focus on how they make or deliver the products and services to delight customers and offer them compelling value propositions. Inherent in this is the understanding personalized experiences have now become far bigger drivers of consumption, requiring a different approach to innovation and customer engagement

Jon McNeill, CEO and Co-Founder at DVx Ventures says “Future creators are impatient. They're dissatisfied, not in a negative way but always looking to make it better. The C-suites that are very engaged with the front lines, very engaged with their product, actually walked the customer journey frequently with their own product, they are very dialed in. And it makes an incredible difference when you have a very fast feedback loop that doesn't come through layers internally, but actually comes directly from the market. The speed and agility within the organization takes on a very different pace.”

Driving this type of human-centered personalized innovation requires diversity at all levels of the organization. It has been proven more diverse teams drive better innovation. This includes diversity not just in age, gender and ethnicity but also background and skills. Companies need to acquire talent beyond their industry boundaries, reaching to adjacent markets and competencies to bring fresh thinking and new ideas into the organization.

Yet diversity remains elusive. Only 28% of respondents to the study said they create diverse and inclusive teams at all levels. The gap is more pronounced at the very top: when asked about the most important changes that could be made to the C-suite, only 8% cited greater diversity and 7% said talent from outside the company.

As companies race to adopt cutting-edge technologies and drive breakthrough innovations, they must carefully consider the human impact to mitigate risks and create trusted relationships with customers, employees and ecosystem partners. Consistently and persistently putting humans at the center of every decision helped CEOs galvanize and motivate employees as well as attract customers, giving them a competitive edge and ultimately leading to growth and a stronger market position.

Responsibly accelerate technology adoption

The pandemic has catapulted us into the digital-first era literally overnight. Unsurprisingly, the results of the study bear out the conclusion that technology acceleration has become one of the most significant drivers of transformation. A majority of respondents (68%) anticipate significant investment in data and technology over the next year, while 63% said accelerating technology and digital innovation is having the greatest impact on their company.

With new technologies emerging and maturing more quickly, companies that can leverage them as instruments of creativity will inherently perform better. Apart from leveraging these technologies, companies will need to deploy technology faster as well in order to serve the ever-evolving needs of customers, employees and ecosystem partners. Perhaps unsurprisingly, digital driven business transformation (56%) and AI/data science (41%) emerged as top competencies requiring new or increased C-suite attention.

However, companies need to carefully consider the human impact of every technology before widescale deployment, as public awareness of the security, privacy and ethical risks grows. CEOs need pay particular attention to building trust with stakeholders to reap the full benefit afforded by AI and data science.

Successfully leveraging and implementing technology at speed requires upskilling and reskilling employees as well as diffusing a transformative mindset across the entire organization at all levels. Forward-looking risk management practices and strong cybersecurity capabilities will be linchpins in fully realizing the value of technology to improve the human experience in our increasingly virtual world.

Thoughtfully scaling innovation

The pandemic is forcing companies to reimagine every aspect of their business – product and service design, business models, operating model and more – re-engineering each for innovation and agility. While all companies need to protect and reinforce their core business, they also need to get into the habit of continuous and rapid innovation.

Leaders must begin with a “future-back” approach. Start by asking whether your company will be relevant in 5, 10 or 15 years and how you might expand your competitive advantage through bold risk-taking. With this in mind, you can then explore the future and potential scenarios to adapt your innovation agenda and enterprise strategy.

Companies must also look outside themselves to enrich their innovation potential. Collaboration with ecosystem partners and cultivating a deep understanding of pain points can help unearth ideas that will be embraced by customers, employees, markets and societies. They must also leverage data, cutting edge intelligent technologies and cloud infrastructure to scale innovation more rapidly.

But perhaps most important of all is ensuring the engine of innovation – human talent – is front and center. The study shows 38% of respondents expect to implement change in their innovation processes over the next three years. These respondents are focused on faster idea generation and trialing as well as reorienting their organizations toward greater risk taking. Humans are intrinsic to these objectives, and achieving them requires embedding innovation as part of the transformative mindset and equipping employees with the tools and permission to appropriately take risk.

Moreover, as companies look to leverage large volumes of data and cutting-edge technologies as part of their innovation engines, they must ensure they safeguard human privacy and security. To truly unlock the value of innovative products, services and solutions, stakeholders must trust them. Demonstrating a commitment to improving the human condition through innovation will be critical for success.

Interweaving and embedding these three value drivers into every aspect of the cross-functional, continuous transformation being demanded enhances your company’s ability to adapt. That makes your operating model more agile which, married to the fundamentals of long-term stakeholder value creation, ultimately maximizes growth potential.