CEOs unsure in face of volatility

UNSURE TIMES: An "astounding" number of chief executives in New Zealand and Australia say they feel ill-equipped to cope with a more complex and volatile business world, a new survey says.

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An "astounding" number of chief executives in New Zealand and Australia have said they feel ill-equipped to cope with a forecast significantly more complex and volatile business world, an IBM survey has found.

A full 84 per cent of chief executives from 81 Australasian companies surveyed by IBM this year said they expected much more complexity in the next five years, but only 39 per cent believed they knew how to cope with it successfully.

They were canvassed as part of IBM's fourth global annual survey of business leaders which involved personal interviews with 1541 chief executives, general managers and senior public sector leaders.

In the past three surveys, chief executives said coping with change was their most pressing challenge, IBM said. This year that had changed to complexity.

"Chief executives told us they operate in a world that is increasingly volatile, uncertain and complex. Many shared the view that incremental changes are no longer sufficient," IBM Australasian survey team leader Ross Pearce said.

There was a "huge disparity" between the overall global sample survey though and what IBM calls the "standouts", organisations which had turned growing complexity into financial advantage over the past five years.

IBM defined "standouts" as being in the top 50 per cent in short term crisis performance and long term "steady-state" performance.

It wouldn't identify individual companies but said three to five organisations out of 81 in Australasia were standouts.

Other main findings globally were that chief executives believed creativity was the most important leadership quality - though New Zealand leaders differed slightly by putting integrity first.

The most successful organisations adopted new channels to stay in tune with, and close to, customers and the better performers managed complexity, simplifying operations and products and increase dexterity to change the way they work, access resources and enter markets.

Dextrous leaders expected to generate 20 per cent more of their future revenues from new sources than other chief executives, IBM said.

IBM New Zealand managing director Jennifer Moxon drew on the survey findings in a speech this week to the Global Women Forum in Auckland.

Identifying business innovation as a "missing ingredient" in New Zealand's efforts to deliver sustainable economic growth, she said the qualities for success nominated by standout companies - creative leadership, customer-centricity and operating dexterity - needed to be nurtured in New Zealand organisations because they support innovation.

Ms Moxon said "creative" leaders persuade and influence rather than command and control, encouraged experimentation throughout the organisation, and invited "disruptive" innovation by encouraging staff to drop outdated approaches and take balanced risks.

"You also keep innovating in how you lead and communicate, often using managed viral communications rather than top-down commands."

Customer-centricity meant staying in tune with customers by analysing the "masses of data out there", she said.

"Right now your customers are busy talking about what they think and what they like on blogs and other social media. You can tap into that intelligence."

- BusinessDesk