When I read one of the major findings in a recent report by IBM Corp. (NYSE: IBM) -- that technology is the most critical factor impacting corporations today -- my first thought was: "Duh." But as I continued to read, it became clear that this was not a "Dog Bites Man" story. The technology that IBM talks about is not just focused on the software or hardware that helps build better widgets. Rather, the most useful technology these days is the technology that brings people together: social networking.
The report, "Leading Through Connections: Insights from the Global Chief Executive Officer Study" (PDF), is based on face-to-face conversations with more than 1,700 CEOs worldwide. Since IBM began the bi-annual study in 2004, technology has risen from No. 6 to the top spot. It's now ranked higher than people skills and market factors.
"As we looked across the whole of CEOs' responses, one consistent theme emerged: an overwhelming focus on changes in how people engage with the organization," the report says. "The view that technology is primarily a driver of efficiency is outdated; CEOs now see technology as an enabler of collaboration and relationships -- those essential connections that fuel creativity and innovation."
A key to business success will be how effectively companies can connect and collaborate -- with customers, their own employees, and partners. In fact, the ability to collaborate was the most commonly cited trait CEOs wanted from their employees.
With customers and business partners, CEOs see social media as a key enabler. More than half expect social channels to be a primary way of engaging customers within five years. Companies are also investing in data analytics to convert customer data into insights and insights into action. More than 70 percent of the CEOs are looking for ways to understand customers and improve responsiveness. CEOs, particularly those in the electronics (86 percent) and automotive (80 percent) sectors, are making major changes to respond better to individual customer needs. "This is now a continuous feedback kind of world," said one CEO. "We need the organizational nimbleness to respond."
This feedback loop will include business partners, for better or worse, according to the report. "In a world of increased transparency and instantly disseminated social media, organizations are often judged by their partners' actions, not just their own." CEOs expect the use of partnerships to increase more than 50 percent over the next three to five years. And those partnerships need to be deeper, more integrated, and stronger than ever. The ideal is that collaboration and communication is so tight among partners that any shift in consumer needs or desires is felt and draws an immediate reaction all along the supply chain.
In the report, an electronics industry CEO from Japan discussed how his company is helping its B2B customers innovate by "incorporating the end user's voice directly into product development."
The bottom line: Technology is making more and deeper connections among people and corporations possible. Those companies that recognize and use these connections effectively stand to gain a competitive edge.