The Enterprise of the Future - Shaping Software

“Even if you are on the right track, you’ll get run over if you just sit there.” ? Will Rogers

While researching the future, I came across IBM’s Global CEO Study: The Enterprise of the Future.

It’s a compilation and distillation of insights from more than 1,130 CEOs, general managers, and senior public sector and business leaders from around the world.

I think of it as a set of “hot spots” for today’s CEOs and a set of success patterns for the Enterprise of the future.

Key Takeaways

Here are my key takeaways:

Master change management. The cycles of change are faster. That means the real opportunity is figuring out how to deal with change more effectively.
Build to change over built to last. This could mean less over-engineering up front and more focus on adaptability and flexibility.
Make customers your partners in the process. Involve customers earlier vs. later. You can’t afford do-overs, you want them bought into the results, and they’re you’re early sounding board for what they really want. They can also help you shape the design to better suit their needs, if that’s how you differentiate.
Bake reinvention into your business development model. Make learning and innovation a formal part of your business development. Innovate by design.
Find ways to leverage the prosumer model. A prosumer is a consumer/producer that’s even more integrated in the value chain.
Find ways to leverage and enhance a global network of knowledge. What you don’t know can hurt you. Focus on improving knowledge sharing among the ranks and around the world.
Find business models and investments that improve society. The business models that will last are the ones that deliver value to society.

Vision for the Enterprise of the Future

IBM created an idealistic view of attributes, but found that while a few companies embodied those attributes, few companies embodied them all.
IBM writes the following:

“Grounded in the collective insights and wisdom of more than 1,000 CEOs, we offer the Enterprise of the Future as a benchmark and blueprint for CEO s, corporate officers and boards of directors around the world.

It is an aspirational goal: some companies already exhibit particular traits, but few, if any, embody them all.

Based on our conversations and analyses, we believe that significant financial opportunity awaits those that become Enterprises of the Future.”

Executive Summary

IBM identified the following key points:

Organizations are bombarded by change, and many are struggling to keep up.
CEO’s view more demanding customers not as a threat, but as an opportunity to differentiate.
Nearly all CEO’s are adapting their business models — two-thirds are implementing extensive innovations.
CEO’s are moving aggressively toward global business designs, deeply changing capabilities and partnering more extensively.
Financial outperformers are making bolder plays.

5 Attributes for the Enterprise of the Future

IBM outlined the following five key attributes:

Hungry for Change
Innovative Beyond Customer Imagination
Globally Integrated
Disruptive by Nature
Genuine, Not Just Generous

5 Attributes for The Enterprise of the Future Explained

I quoted IBM’s key summary for each of the attributes to characterize what they mean:

Hungry for Change. “The Enterprise of the Future is capable of changing quickly and
successfully. Instead of merely responding to trends, it shapes and leads them. Market and industry shifts are a chance to move ahead of the competition.”
Innovative Beyond Customer Imagination. “The Enterprise of the Future surpasses the expectations of increasingly demanding customers. Deep collaborative relationships allow it to surprise customers with innovations that make both its customers and its own business more successful.”
Globally Integrated. “The Enterprise of the Future is integrating to take advantage of today’s global economy. Its business is strategically designed to access the best capabilities, knowledge and assets from wherever they reside in the world and apply them wherever required in the world.”
Disruptive by Nature. “The Enterprise of the Future radically challenges its business model, disrupting the basis of competition. It shifts the value proposition, overturns traditional delivery approaches and, as soon as opportunities arise, reinvents itself and its entire industry.”
Genuine, Not Just Generous. “The Enterprise of the Future goes beyond philanthropy and compliance and reflects genuine concern for society in all actions and decisions.”

The Growing Gap

One of the key themes in the report is how there’s a growing gap between companies that succeed and companies that fail.

The big factors seem to be the accelerated rate of change and a global market.

IBM writes:

“So what’s causing this growing gap? Constant change is certainly not new.

But companies are struggling with its accelerating pace. Everything around them seems to be changing faster than they can.

As one U.S. CEO told us, “We are successful, but slow.”

But in 2008, CEO s are no longer focused on a narrow priority list. People skills are now just as much in focus as market factors, and environmental issues demand twice as much attention as they did in the past.

Suddenly everything is important. And change can come from anywhere.

CEO s find themselves — as one CEO from Canada put it — in a “white-water world.”

CEO s are most concerned about the impact of three external forces: market factors, people skills and technology.

Customer expectation shifts, competitive threats and industry consolidation continue to weigh on their minds.

CEO s are also searching for industry, technical and particularly management skills to support geographic expansion and replace aging baby boomers who are exiting the workforce.”

Prosumers

One of my favorite points in the report is about the rise of the prosumer:

“In the future, we will be talking more and more about the ‘prosumer’— a consumer/producer who is even more extensively integrated into the value chain.

As a consequence, production processes will be customized more precisely and individually.”
– Hartmut Jenner, CEO, Alfred Kärcher GmbH

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