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Most CEOs are planning to kill their companies

I had an interesting briefing earlier in the week. KPMG just finished a large CEO survey looking at how CEOs are thinking about technology. The good news is they apparently think about technology and IT a lot. The bad news is they don’t trust what they’re getting from IT and that suggests that not only will the move to cloud services accelerate, but it may very well accelerate without IT.  

Other than looking for a job at Amazon Web Services this suggests the perception of quality needs to improve dramatically or IT is likely to see a rather massive shift in budget as money stops flowing through the organization and increases the current tendency to flow around it. However, if you actually factor in what the CEOs are saying you should conclude that most CEOs are actually planning to kill the companies they are running and that should scare the hell out of most of us.

Let’s cover some of the details.

KPMG

First let’s talk about KPMG. Surveys can be compromised by the firms that do them. Surveys like this are generally done to increase business so you have to take that into account when looking at the results. However, while KPMG does custom software and services they aren’t a platform, software or hardware OEM. This means on subjects like services you have to take what they are saying with a grain of salt, particularly if the result favors KPMG. On issues like broad trends, or even preferences for third-party software, hardware or cloud services they should be relatively unbiased. Therefore, their recommendations would be tied to platforms that have worked for them at scale so here their results can be more trusted because the truth better aligns with KPMG’s interests.

So, for a study on CEOs’ views on technology and IT they should be reliable. However, this information also needs to be factored in with other data sources particularly with regard to your own CEO because this is a study of averages and your CEO may not be average.  

The results

I’ll cherry pick the results from this study and comment on each.

Two thirds of CEOs don’t think their companies can keep up. The actual question focused on the fact that CEOs are focused on innovating through acquisition rather than organically. But the translation is they have no confidence in their organization’s ability to innovate. This is a significant problem for every employee because it implies the CEOs feel a large portion of their firms are unwilling or unable to perform. Acquisitions should be the exception not the rule, yet the opposite appears to be true. Now it is unlikely that 75 percent of firms can’t execute so this is likely a blend of CEOs not understanding what is being done and organizations that are being restricted by policy, culture, or practices (like Forced Ranking, which kills innovation). But it certainly doesn’t bode well for job security.

Eighty five percent of CEOs don’t think IT is performing critical functions.   The focus of the related question was on the quality and time strategizing, but this feeds directly into IT guided services like Business Intelligence and analytics. In effect the vast majority of CEOs apparently think they are blind. This can be due to a lack of information and a distrust for whatever they are getting. For me, the big issue is that a whopping huge majority of CEOs seem to think they are driving their company blind. If this were me I’d be in a near panic to fix that and this really implies most IT shops should be scheduling a top level meeting to better understand why the CEO thinks this and to prioritize fixing the problem before they try to fix it themselves.

Building on this, 40 percent of CEOs are planning to massively change their firms. Now the question actually asked if they were anticipating change but CEOs steer the ship. If they are anticipating something that means they will be driving it. Now recall that most think they are blind, so you basically have a huge number of drivers who think they are blind yet are planning to make a huge change in direction. If these were cars instead of companies you’d likely conclude that 40 percent of companies are likely to have major accidents. This further supports the argument that fixing the “blind” problem should be prioritized.

A whopping 90 percent of CEOs feel they have no idea what their customers want and aren’t meeting their customer needs. The question focused on customer loyalty, but the implication was clear. Holy crap, we not only have blind CEOs who are about to make a massive direction change, now we learn that virtually every CEO is convinced they are going in the wrong direction. Whether this is real or perceived this means that at least 50 percent of CEOs will be easily convinced to make a massive organizational change -- and remember they still think they are blind so this won’t end well.

Seventy five percent of CEOs think their firms need to disrupt the market but aren’t. You could read this as implying that every CEOs longs to be Steve Jobs. I don’t blame them, but they want to disrupt the market and be rich heroes. Now follow me here. The CEOs think they are blind, they are panicked that their firms are heading for a cliff (their customers are going to leave), they feel they need to make dramatic changes, and they don’t want to flow through traffic. The implication is virtually every CEO is on a path to destroying their respective companies, some faster than others, largely because they have no confidence in their firms or their own ability to make measured decisions.

Technology has failed them and while a lot of this certainly could be organizational, it also showcases that analytics isn’t doing the job it is supposed to be doing. We shouldn’t be here.  

Analytics efforts are failing

What got me to take the briefing was that far less than half of CEOs trust what is coming out of their analytics solutions. This flows on top of other surveys I’ve seen saying over 80 percent of analytics efforts fail. Given that IT is missioned as the organization that makes technology work, the fact that CEOs think the parts of their technology that they personally depend on aren’t working suggests that IT as a class of job is in for massive disruption either because the CEO is looking elsewhere for help or (and this isn’t mutually exclusive) because they are on a fast path to killing the firm outright.

Now they may not intend this outcome but if we had a blind driver (in a car) scared they are going in the wrong direction, who wants to speed up, take a lot of dramatic turns, and doesn’t trust what they are hearing from their passengers (which at some point likely would be screams), you’d not only have a certain accident, you’d have a deadly one.  

From a survey like this I can’t suggest a complete path to fixing this problem because the nature of it likely spans everything from incompetence in IT or the CEO. The latter is a very real possibility because this reads like a lot of these guys are certifiably nuts, based on the complete disconnect between what is being done and what is being used and trusted. But fixing a problem like this starts at the top, this suggests that IT better align with what the CEO needs or something really bad will result, with emphasis on the “really” part. This also suggests that right now being in a Fortune 500 company is really risky and that a smaller firm might be a lot safer because working for a blind CEO who wants to be disruptive sounds like job suicide.   Holy crap.

IDG Insider

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