by Mark Raskino | January 15, 2019 | Comments Off on If there’s a double dip ahead, CEOs should refocus – not reverse
I recently published a Gartner research note of suggested technology related ‘resolutions’ for chief executives (paywall). It’s a list of pointers to things they can consider doing, to help improve their company’s digital business progress. 2019 looks like it might be a turning point year that offers an opportunity for the organisation to pause for breath and refocus its transformation efforts.
Toward the end of 2018, many signals suggested that a decade of economic growth was slowing down. China’s growth rate decreased. Germany, Italy, Japan, Switzerland and Sweden experienced contraction quarters. Global stock markets declined dramatically and the U.S. government bond yield curve inverted. This shift of fortunes had been anticipated by many economists and business leaders. After all – economies are always cyclical.
In 2019, it’s possible we will see twin dips in business confidence and technology belief that combine and reinforce. I can’t say it will happen – but I think most people reading this will acknowledge that it might. If that scenario does actually unfold, corporate risk attitudes toward all things “digital” might then change. CEOs should take stock. But they should not simply walk away from technology-related innovation and progress themes in their business strategies. Instead they should try to think differently than the herd and act strategically to exploit any pause in tech confidence and momentum.
CEOs should remember the Hype Cycle and not fall into the trap of disinvesting during any period of digital business disillusionment. Instead – focus resources on quiet, steady progress to get to the slope of enlightenment. It will be a good time to cull some of the superficial digital agendas that may have arisen when all things digital were fashionable playthings of some middle management careerists. It might also be smart to use some of the international trade challenges many are facing, to deepen digital change. For example moving facilities between countries is a green-field opportunity. Why replicate the old way of doing things in the new location? Force the new operation to be reborn digital.
If we did head into economic recession territory, this time it might arrive more slowly and predictably than 2009. That might offer an opportunity to thoughtfully reengineer the cost base of the company – rather than just go into cutting mode. Chasing digitally enabled growth has become the default pursuit for many. Refocusing your people on a major endeavour of digital productivity reengineering could be a better alternative for a while. As one CEO said to us recently – if you have been in business long enough, you know there’s a season for these things right?
Whatever happens one thing is for sure – most companies will need to continue developing their digital talent base. A confident and able tech-savvy culture is needed across many parts of the business – not just in IT. To that end many CEOs really need to work on their personal role as a corporate brand ambassador and talent magnet. How can you create the mission, display the zeal, induce belief and craft the workplace appeal to get the best people to come towards you?
We think that the CEO should also ask the CIO and chief HR officer (CHRO) to pair up and work together, to lead a significant program to scale up the digital workforce. But that won’t be enough if the Board of Directors doesn’t set out and support a strong digital element of the business strategy. We think many boards just don’t have enough tech-savvy in the room for the task at hand, so 2019 might be the right time to consider adding a topflight CIO or CTO as a nonexecutive director (paywall). That’s a subject for a future post.
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