Every business these days wants to build its digital side. That requires, above all else, the active participation and support of the people on top. The question is: are they fully on board, and understand what direction to go? Most CEOs feel their companies are making the right moves in the technology space, but few are actually reaping the benefits.
That’s the key takeaway from a recent study of 8,300 organizations and 885 CEOs by Accenture, which concludes that despite CEOs’ feelings of confidence when it comes to technology, most companies suffer from an “Innovation Achievement Gap” — meaning their technology investments aren’t delivering hoped-for levels of innovation and revenue.
Eighty percent of CEOs in the survey believe they have the right technologies in place to innovate at scale, and 70 percent claim to be very knowledgeable of their organizations’ investments in innovation.
The study’s authors — Paul Daugherty, Bhaskar Ghosh and James Wilson, all with Accenture — analyzed the adoption of both mature and emerging technologies, such as artificial intelligence, cloud, blockchain, and extended reality, and correlated it with CEO attitudes and business results.
The urge a dramatic change in thinking in the corner suite when it comes to harnessing the power of technology. First and foremost is to realize with the plethora of cheap and ubiquitous technologies now sprawling across the business landscape, there are opportunities to build networks, connecting departments within and business partners from the outside.
CEOs and business leaders need to get more involved in exploring the potential advantages technology will bring, while bearing in mind that transformation is an organizational initiative that technology alone won’t enable. Business leaders need to work closely with IT leads — chief digital officers, chief information officers, chief analytics officers — to design a new future systems strategy. Such a strategy needs to be “based on enterprise-wide needs and can adapt to the changing nature of employee, partner and customer habits.” Business leaders need to think very broadly about their technology strategies, Daugherty and his co-authors advise. “It isn’t enough to make reasonable decisions. Nor is it enough to be aligned with your IT leaders on decisions. There’s a real danger that you will all be agreeing on a seemingly justifiable, but suboptimal, choice.”
Overall, the Accenture study finds only 10 percent of companies are making optimal technology investment and adoption decisions and realizing the full value of those investments. These forward-looking companies are generating more than twice the rate of revenue growth than those on the lower end of the spectrum. Daugherty and his co-authors identified the approaches that distinguish the leading 10 percent from the rest:
Open up more possibilities through cloud: “New technologies, including AI and cloud, open up almost limitless possibilities for transforming business processes by lowering prediction and computation costs, “ the Accenture team states. Yet, most companies generally choose to apply them to just a few processes, usually in marketing and sales. Even when companies create hubs and blur organizational silos, they don’t establish connections from hubs to other parts of the organization or value chain. As a result, they have no way to transfer innovations across the enterprise, limiting the value they can get out of them.”
Adapt to survive, evolve to succeed: Successful digital leaders do more than simply upgrade their technology assets, or swap in modern solutions. It requires rethinking how the business will evolve, enabled but at the same time decoupled from new technology tools. “Yesterday’s tech won’t lead you to a bright future,” Daugherty and his co-authors state. However, many companies still prefer to patch their legacy systems, mainly driven by security concerns. Lifting and shifting applications to the cloud is better, but still suboptimal. Leaders see the cloud not simply as a data center. They see it as a catalyst for innovation across silos and businesses.”
Don’t wait and see: Companies lagging in technology-enhanced business growth all too often take a wait-and-see approach, the Accenture study finds. “While most companies hold back, leaders leap,” the co-authors state. “Most laggards, for example, experiment with new tech on the leading edge, but do not plan or follow through with the innovations of new technologies into their core processes—this decreases returns.” Another lagging factor is many companies will “double down on industry-specific, customized tech—but this locks companies into certain technologies and can inhibit their ability to combine them in the future.”
Upskill, reskill, repeat: Leading companies provide constant training and relearning, avoiding “time-tested, one-size-fits-all training regimens,” and eschewing the belief that appropriate skills can be recruited. “The reality is that skills now rapidly reach obsolescence, and job descriptions evolve faster than ever. Our study respondents believe that in the absence of reskilling, 52 percent of their IT workforce’s skills, and nearly half—47 percent—of their non-IT workforce’s skills will be obsolete in three years.”