Remote work became the No. 1 strategic priority in 2020, even over cutting costs and focusing on customer engagement, a new IBM study found.
Managing an "anywhere" workforce is a top challenge for many CEOs in the next few years, a new IBM study found. As such, remote work became the No. 1 strategic priority for all CEOs in 2020–ranking above virtual customer engagement, supply-chain continuity, and even cost reduction, according to the Institute for Business Value (IBV) study.
For half of outperforming CEOs–those who were in the top 20% for revenue growth of those surveyed–managing a remote workforce is a critical challenge, cited nearly twice as often as their underperforming peers (at 25%).
The survey found that over the last year, CEOs of outperforming organizations are prioritizing talent, technology, and partnerships to position their companies for success post-COVID-19 pandemic.
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The survey also highlights how outperforming CEOs are reprioritizing their businesses following major economic collapse in 2020, while still managing unprecedented geopolitical and socioeconomic turmoil in 2021, IBM said. Among the findings:
Outperforming CEOs are hyper-focused on employees, with 77% citing they must support employee well-being even at the cost of profitability or budget—at a 97% higher rate compared to the underperforming peers. Only 39% of underperformers said the same.
Yet, CEOs cite technology and regulatory concerns as top external factors impacting their business—placing their CTO and CIO on center stage as most critical C-suite executives, while deprioritizing HR execs:
When ranking which members of the C-suite would play the most crucial role for their organization over the next two to three years, CEOs named their tech chiefs (CIOs, CTOs) at more than twice the rate of any other position in 2020 except CFO and COO. Less than 20% said they believe that CHROs will play a critical role in their organization, indicating the CIO/CTO are even more key to supporting people than CHROs.
This is also a dramatic departure from the previous position of the Chief Strategy Officer (CSO), IBM said. In 2013, 67% of CEOs named the CSO as a crucial role–second only to the CFO. This year, the prioritization of this role fell to just 6%.
Empowering employees in the hybrid workplace
IBM's annual study found that more than half of workers surveyed said flexible work arrangements to help achieve work-life balance was the most important offering for their employer could provide, more than competitive compensation or career growth.
Further, one in four employees who said they are planning to change employers in 2021 cited the need for a more flexible work schedule/location.
"The COVID-19 pandemic challenged many leaders to focus on what's essential, like their people," said Mark Foster, senior vice president, IBM Services, in a statement. "Many employees' expectations of their employers have significantly changed. The 'anywhere' workforce can require leaders to provide agile technology, to adopt more empathetic leadership models that prioritize employee well-being and to champion flexible and inclusive cultures."
In addition, 77% of outperforming company CEOs surveyed reported they plan to prioritize employee well-being even if it affects near-term profitability, compared to 39% of underperformers, reflecting that the surveyed leaders of top organizations are heavily focused on their people right now, IBM said.
The company is recommending that leaders carefully consider the longer-term challenge of a hybrid work environment, which can include things like providing employees with digital, cloud-enabled tools for collaboration, preventing employee burnout, or sustaining company culture with focus on diversity and inclusion.
Voluntary attrition: In a related IBV survey of more than 14,000 global consumers, one in four employees reported they are planning to change employers in 2021, citing the need for a more flexible work schedule or location as a top reason.
Diversity: Only 17% of CEOs surveyed ranked diversity and inclusion among the most important organizational attributes for engaging employees.
The top technologies for delivering business benefits
The IBV study also revealed that the majority of CEOs surveyed see technological factors among the most important external forces that will impact their business in the next few years, following the massive disruptions of 2020, the survey found.
Across the board, surveyed CEOs said cloud, AI, and IoT were the top technologies that they believe can deliver benefits for their business. However, outperforming company CEOs said technology foundations were the top challenge at double the rate of underperformers.
Growing importance of partnerships
Outperforming company CEOs are also more focused on partnerships, according to the IBV study. Some 63% of outperforming CEOs said partnerships have become more important for driving business performance while only about half as many underperformers said the same.
Based on the study results, IBM's assessment is that outperforming company CEOs are narrowing their focus to what they do best and relying on partners and ecosystems for access to broader ideas and innovation opportunities.
In addition, as many leaders increasingly see how their organizations can help address interconnected global issues like climate change, ecosystems may be able to play a pivotal role in driving lasting change, IBM said.
The "Find your essential" study polled 3,000 CEOs across 26 industries and nearly 50 countries, according to IBM. It was conducted in cooperation with Oxford Economics and benchmarked against more than 20 years of IBM's annual CEO surveys, and for the first time, a global survey of more than 14,000 consumers.
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