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IBM Global CEO Study 2006 Russell Boyd Solomon Lukie Mark Maglana.

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Presentation on theme: "IBM Global CEO Study 2006 Russell Boyd Solomon Lukie Mark Maglana."— Presentation transcript:

1 IBM Global CEO Study 2006 Russell Boyd Solomon Lukie Mark Maglana

2 2 Survey Participants » 765 executives » 61% operate in mature markets » 52% have less than 5,000 employees » Highest industry representation »Banking »Government »Industrial products

3 3 Contents » What has changed? » What are the challenges? » Our learning objectives

4 4 What Has Changed? » From cost cutting to sustained growth » Emphasis on business model innovation » Importance of external collaboration » CEO’s responsibility for innovation

5 5 Innovation Types Defined » Business Model Innovation in the structure and/or financial model of the business » Operational Innovation that improves the effectiveness and efficiency of core processes and functions » Products/services/markets Innovation applied to products or services or “go-to- market” activities

6 6 Business Model Innovation

7 7 Outperformers & Underperformers » Comparison of average revenue growth, operating margin growth, and historical operating margins » Outperformers – companies above the average » Underperformers – companies below the average

8 8 Innovation Priorities

9 9 External Collaboration » Business partners and customers now a major source of innovation » Internal R&D no longer top source

10 10 Sources of Innovation

11 11 Percent of External Ideas Used

12 12 Responsibility for innovation » No longer limited to R&D Manager » CEO primarily responsible » Innovation seen as everyone’s job

13 13 What are the Challenges? » Business and technology integration gap » The gap in aspired external collaboration and actual external collaboration. “It was theoretically easy, but practically hard to do” » Balancing the energy spent with the benefits

14 14 What are the Challenges? » External » Internal

15 15 External Challenges

16 16 Internal challenges

17 17 Questions

18 18 Questions/concerns (1) Collaboration » Is the collaboration trend driven by corporate growth demands as much as the need to differentiate? » Is collaboration perhaps “opportunism” and a necessary, but passing fad? » Does the collaboration model suit SME’s as well as large global operators? » Who will continue R&D in the longer term? Will these firms be fitter for survival? » Why is internal collaboration a problem but external collaboration a success? » Where are the cost savings from external collaboration derived from? » What is driving higher customer satisfaction from collaboration? » Are the woes of global car manufacturers a sign of the future for collaborators? For example, the merger / collaboration between Mercedes Benz and Chrysler?

19 19 Questions/concerns (2) Innovation and the CEO » Do the CEO statements reflect what’s actually happening in their organisations? » Is the pressure on CEO’s for results driving short term thinking? » How does a CEO excite, motivate and involve the whole firm in innovation? » The Google model begs the question: “will large firms accept teams learning through experimentation and failure? » Is business improvement through technical innovation real or a CEO perception? » How do you balance a team focus with individual rewards?

20 20 Questions/concerns (4) » Page 31. “Companies that reward individual contributions achieved 2% higher operating margins…and grew revenue nearly 3% faster than those that did not.”

21 21 Learning objectives (1) Business model innovation considerations: » how global connectivity is forcing new business models » how to search out competitive differentiators » how innovative business models are determinants of strategy success or failure » “what-if” analysis techniques for selecting alternative business models » Ways to leverage internal / external capabilities

22 22 Learning objectives (2) External collaboration considerations: » the drivers of external collaboration » the strengths & weaknesses of a “virtual” business » does IP protection remain valid as firms move to collaboration? » why internal collaboration is a big problem for large firms and can it be resolved? » how does external collaboration reduce costs and improve customer satisfaction? » cultural changes that are conducive to external collaboration » which firms should maintain their own R&D capability?

23 23 Learning objectives (3) Consider the role of the innovative CEO » the source of a CEO’s inspiration to innovate? » balancing orchestration from the top with the need for momentum at the grassroots? » techniques organisations use to filter innovation opportunities » organisational culture conducive to innovation » the parameters of change - does one size fit all? » challenges arising out of the business and technology integration gap » overcoming the technology gap and finding measures which bring results.

24 24 Thank You!

25 25 Appendices

26 26 Common Business Model Innovations

27 27 Product innovation

28 28 Collaboration Benefits

29 29 Use of Collaboration

30 30 Margin of Performance


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