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Seizing the Gen AI Opportunity: Insights from the 2024 IBM CEO Study

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CEOs Must Strike a Balance Between Caution and Courage to Harness the Power of Gen AI

CEOs who seek to position their companies to thrive in the years ahead should review the findings of the recently released 2024 IBM CEO Study and take appropriate action – particularly with seizing the immense opportunity Generative AI offers in building a competitive advantage.

This is the 29th annual release of the survey, which was taken by over 2,500 CEOs worldwide, reveals that Gen AI presents an “opportunity paradox” – it can drive immense productivity gains and uncover new avenues for growth, but also poses significant risks if not managed properly. CEOs must act with both caution and courage, accelerating transformation while uniting teams to deliver results responsibly.

A key challenge is that CEOs’ workforce isn’t as prepared for the Gen AI era as they believe. Significant retraining and reskilling will be needed, with 35% of the workforce requiring upskilling in the next 3 years. CEOs must accurately assess skills gaps and look to forward-thinking talent to redefine how work is done.

Gen AI also enables hyper-personalized products and experiences, but the customer isn’t always right about what they will want in the future. While co-creating with customers, companies must still innovate beyond current sentiment while using customer data ethically and transparently to maintain trust.

As strategic priorities shift, CEOs must be unsentimental and selective about partnerships, prioritizing expertise over long-standing relationships. Healthy debate among the C-suite is also crucial; CEOs must encourage diverse perspectives while providing clear rules of engagement for constructive conflict.

Internally, employees often resist the change Gen AI brings. CEOs must inspire adoption by communicating its value, providing ample training, and cultivating a culture of innovation. Importantly, there are no technology short-cuts – digital infrastructure investments must align with long-term business strategies, not just exciting new use cases, to provide a foundation for growth.

The study identified a group of top-performing CEOs whose organizations excel in areas like digital infrastructure, innovation, talent development, ecosystem partnerships and strategy execution. These leaders provide a model for the capabilities required to fully harness Gen AI.

Looking ahead, CEOs have ambitious plans for the technology. While less than half are focused on Gen AI pilots today, 49% expect to leverage it for growth by 2026. This will require taking calculated risks and leaps of faith to avoid being left behind.

Ultimately, successfully adopting Gen AI demands that CEOs confront difficult realities head-on – from talent gaps to legacy technologies to resistance to change. By taking an eyes-wide-open approach while moving with agility and speed, CEOs can seize the Gen AI opportunity and lead their organizations to outperform.

Here are the top takeaways and findings from the report, courtesy of ChatGPT4o.

The Top 10 Takeaways from the IBM 2024 CEO Study are:

  1. Gen AI has the potential to drive unprecedented productivity gains and reveal new growth opportunities, but also poses significant risks. CEOs must strike the right balance between caution and courage while moving faster than ever.
  2. The CEO’s team isn’t as strong as they think when it comes to leveraging Gen AI. Significant workforce retraining and reskilling will be required, and CEOs need to accurately assess skills gaps.
  3. Customers don’t always know what they want. Gen AI enables hyper-personalized products and experiences, but companies must use customer data ethically and be transparent to maintain trust.
  4. CEOs must be selective about partnerships, prioritizing expertise over sentimentality. Changing strategic priorities demand reconfiguring core business partnerships.
  5. Healthy debate among the C-suite is crucial for good decision-making. CEOs must set ground rules to keep conflict constructive and leverage the diverse expertise of their leadership team.
  6. Employees are resistant to change brought by Gen AI. CEOs must help them see its value, provide training, and create a culture that inspires adoption of new technologies.
  7. There are no technology short-cuts. CEOs must invest in digital infrastructure aligned with long-term business strategies, not just exciting new use cases.
  8. Top-performing CEOs’ organizations have more effective digital infrastructure, innovation, talent development, ecosystem partnerships and strategy execution compared to peers.
  9. Over the next few years, CEOs will increasingly leverage Gen AI to drive efficiency and growth. By 2025, over half expect to use it for expansion.
  10. Taking risks with Gen AI is necessary to remain competitive. CEOs on a “burning platform” must take a leap of faith while building organizational agility to pivot as priorities shift.

The Top 10 Findings from the IBM 2024 CEO Study are:

  1. 67% of CEOs say the potential productivity gains from automation are so great that they must accept significant risk to stay competitive.
  2. 62% of CEOs say they will take more risk than the competition to maintain their competitive edge.
  3. 72% of top-performing CEOs agree that competitive advantage depends on who has the most advanced Gen AI.
  4. 65% of CEOs say their organization’s success is directly tied to the quality of collaboration between finance and technology functions.
  5. 64% of CEOs say their organization must take advantage of technologies that are changing faster than employees can adapt.
  6. 61% of CEOs say they’re pushing their organization to adopt Gen AI more quickly than some people are comfortable with.
  7. 59% of CEOs say they aren’t willing to sacrifice operational efficiency today to drive greater innovation.
  8. 55% of CEOs say changing strategic priorities demand reconfiguring core business partnerships.
  9. 51% of CEOs are hiring for Gen AI-related roles that didn’t exist last year.
  10. 49% of CEOs expect to use Gen AI to drive growth by 2026, up from less than half focusing on generative AI pilots today.

The findings of this study underscore the urgency for CEOs to act swiftly. Priority steps include implementing Gen AI training for knowledge workers and leveraging this technology to optimize individual workflows and company-wide processes. CEOs should then harness Gen AI to drive key performance indicators such as revenue growth, cost management, margin expansion, and enhanced customer and employee experiences. As their expertise grows, CEOs will spearhead efforts to utilize Gen AI in developing transformative products, services, and business models, while simultaneously reshaping organizational operations and culture. The imperative is clear: those who most effectively deploy this critical technology will emerge as the winners of the future.

 

Why Portfolio Companies Must Embrace the Gen AI Revolution — Now!

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New Bain Global Private Equity Report Sees Gen AI is a Game-Technology for Portfolio Companies in Value Creation

Capturing the immense power of Generative AI to drive value creation is on the agenda of most private equity-backed CEOs. As the transformative force of our time, Gen AI is not just redefining the nature of work; it’s reshaping entire industries and disrupting business as we know it. Sooner or later, this revolutionary technology will impact every industry, every company, and the job of every knowledge worker.

The urgency to lean into Gen AI is resoundingly affirmed in the recently released Bain Global Private Equity Report 2024. In the chapter Harnessing Generative AI in Private Equity, Bain observes that Gen AI is asserting itself as a game-changing technology across the global economic landscape. They envision it being rapidly deployed in portfolio companies to drive:

Operational efficiency. AI tools enable portfolio companies to streamline operations, automate routine tasks, and optimize labor use, leading to significant cost savings and operational efficiency gains that directly impact the bottom line.

Talent acquisition and optimization. Gen AI can augment the capabilities of existing staff, empowering humans to focus on higher-value activities while AI handles more routine tasks, thereby optimizing talent utilization and unlocking hidden potential.

Market competitiveness. Early adopters of Gen AI can seize a powerful competitive edge in the market by enabling innovations that outpace rivals and disrupt traditional business models, positioning themselves as industry leaders.

Improved decision making. Gen AI turbocharges decision-making by providing comprehensive data analysis that uncovers insights not immediately apparent through conventional methods, enabling leaders to make smarter, more informed choices.

Customer Interaction. AI can revolutionize customer service and engagement through more personalized and responsive communication tools, driving customer satisfaction and retention rates to new heights.

Value Creation. Implementing AI-driven solutions can directly contribute to value creation by enhancing product offerings, improving service delivery, and creating entirely new revenue streams that propel growth.

The CEOs of PE-backed portfolio companies that I coach and consult are leaning into Gen AI with fervor. While the potential benefits touted in the Bain report are undeniably attractive, they don’t materialize automatically (a point Bain glossed over). To make those transformative strides requires significant training, practice, and widespread adoption of Gen AI across your entire organization.

When I train leaders on Gen AI, I introduce them to the Gen AI Essentials Pathway, a powerful learning protocol that emphasizes the foundational elements necessary to build Gen AI literacy, proficiency, and adoption skills. It encompasses five steps:

In the training, all knowledge workers (including the CEO and C-suite) discover how to select and use large language models (LLMs) and how to craft prompts that elicit excellent outputs. They learn the three powerful personas they can leverage to harness the full potential of Gen AI: as an assistant, a strategist, and a creative force. They practice writing targeted prompts that deliver exceptional results. They are introduced to fifteen high-impact use cases and corresponding prompts that are invaluable for leaders and managers. Then, they conduct workflow audits of their critical objectives and tasks to identify use cases where Gen AI can be applied to maximize brainpower and human potential.

Before embarking on any task, they start by asking, “Can Gen AI help me with this?” As the training concludes, they are invited to participate in the 30-Day Challenge. I share examples of individuals who have dedicated just 30 minutes a day to Gen AI for 30 days, developing a new, indispensable habit that results in significant productivity gains, time savings, and better decision-making. A goal of a 20% productivity increase is established as a starting point.

We reconvene a month later to share our learnings and breakthroughs. Many participants report productivity improvements that exceed the initial 20% target. We dive into the use cases they are applying, the AI tools they’ve experimented with, the remarkable results they are achieving, and the exciting next steps on their Gen AI journey. Suggestions and best practices are freely shared, all in a spirit of discovery, learning, and leaning into this extraordinary new superpower. We discuss pain points and opportunities across the company where Gen AI can make a transformative impact, and then prioritize high-potential projects. They receive additional training, collaborating to apply Gen AI in innovative ways. Then we rinse and repeat, building their Gen AI capability that puts them on the path to delivering the game-changing benefits described by Bain.

If you want to get your people excited about Gen AI, you have to answer their first question: “What’s in it for me? “ When they see how Gen AI can help in their personal workflows to save time, help them make better decisions and do higher quality work, then they’ll be ready to tackle the company’s opportunities and challenges. Start by showing them how Gen AI can make their lives better.

A soldier isn’t forged without the crucible of bootcamp. A major league baseball player doesn’t reach the pinnacle of their sport without the rigors of spring training. Similarly, your team members won’t become Gen AI powerhouses without proper training and support. If you truly want to reap the rewards that Gen AI promises, invest in providing everyone with a solid foundation through comprehensive training and a robust learning process. Fail to do so, and you risk being left in the dust by competitors who are seizing this once-in-a-generation opportunity.

The Gen AI revolution is here, and the time to act is now. Portfolio companies that embrace this transformative technology and invest in building their Gen AI capabilities will be the ones that thrive in the new era of business. Don’t let this moment pass you by. Lean into the power of Gen AI, train your team to harness its full potential, and watch as your company soars to new heights of efficiency, competitiveness, and value creation. The future belongs to those who dare to embrace it — will you be among them?

Narratives of Tomorrow: Merging AI with the Art of Storytelling

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Are You Leveraging AI to Tell Your Leadership Stories?

In our Executive AI Bootcamp, a cohort of twenty-five CEOs has gathered weekly every Thursday in February for a fast-paced hour of learning, featuring guest speakers and interactive Q&A. In last week’s session, we delved into “AI for Teams,” uncovering strategies to enhance productivity and the quality of work among top leadership teams. We explored a four-step process designed to optimize both functional and cross-functional teamwork, as well as to streamline processes using Generative AI to augment team workflows. The key takeaway was the importance of blending technology with a human touch to achieve the desired outcomes and experiences.

Our focus in Executive AI Bootcamp has predominantly been on practical, actionable use cases within the C-suite. However, we’ve also explored how Gen AI is being innovatively applied in ways that could indirectly benefit this group of high-powered leaders. This exploration was enriched last week by a visit from Erich Archer, an Emmy-award winning creative executive and content strategist, known for his exceptional storytelling skills.

 

The power of storytelling, an art as old as time, is undeniable. Storytelling is baked into our DNA. Our ancestors were weaving tales 30,000 years ago, capturing hearts and minds to influence and persuade. Think of the best CEOs you know. They are likely skilled storytellers.

Erich Archer stands out as a master storyteller.  As the executive director for 1623 Studios, a nonprofit community media center in Gloucester, Massachusetts, storytelling is at the core of Erich’s profession. Recently, he has been merging his passion for storytelling with Gen AI. He introduced us to great-great-great-great grandfather, Rufus Archer, who lived in nearby Salem from 1812-1909. Rufus was a cooper (a barrel maker) and volunteer fire fighter.

Using a few old pictures his father passed along of Rufus, Erich combined his storyteller’s imagination with the technology of Gen AI to create a documentary in the style of Ken Burns. This project included:

  • Writing the script with ChatGPT4.
  • Researching historical events with Perplexity.
  • Generating lifelike images from the photographs with Midjourney.
  • Producing a video from these images with RunwayML.

This innovative blend of Ai technology and storytelling crafted a captivating two-minute video, which transported us back in time, making Rufus Archer’s story come alive. Erich showed us what is possible when we combine AI technology with a good story. He created his production in about twenty hours for less than $200 on his laptop.

Will Gen AI eliminate the need for human storytelling? Absolutely not. The essence of leadership often lies in sharing a compelling vision of the future, sometimes by drawing on our past and the timeless values of our ancestors. Erich’s project serves as a profound example of how we can marry humanity with technology to engage and inspire. To experience the Rufus Archer story and learn more about how Erich crafted his remarkable piece, visit his LinkedIn page.  ​Watch the full video and read how Erich made it here.​

Isn’t it Time to Boost Your Company’s Strategies with Gen AI?

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Two Ways of Infusing AI to Optimize and Accelerate Your Business

Your job as leader is to create value in a sustainable way.  That requirement is about to become impossible if you don’t effectively embrace Gen AI.

Gen AI is the most powerful technology of our lifetime. If you aren’t leveraging it in your business, you are on the fast track to obsolescence. Gen AI is radically changing every industry, every company and nearly job. And that includes your job, CEO.

It’s imperative to get in the game. You simply can’t wait as your competitors will pull ahead of you and create an insurmountable lead.

Consider the findings of recent CEO studies:

  • 99% of companies plan to increase investments in Gen AI. – Accenture
  • 97% believe that Gen AI will transform their business over the next 3 to 5 years. – Accenture
  • 62% of CEOs acknowledged the urgent need to act on Gen AI to maintain a competitive edge, yet 61% find it challenging to initiate this shift. – EY
  • 49% of CEOs say Gen AI will create new revenue streams in the next 3 years. – PwC
  • Executives launching Gen AI in 12 to 18 months expect 15.7% cost savings and 24.7% productivity improvements. – Gartner

How are you infusing Gen AI into your company’s strategy?

Two ways to bolster your company with Gen AI is to optimize your operations and accelerate performance metrics like revenue growth, gross margin, EBIDTA, expense reduction, sales per employee, customer experience, and employee engagement.

To take advantage of Gen AI, you must know its five superpowers. They are:

  1. Generate text, images, audio, code or video.
  2. Synthesize text, images, video, data, code or audio.
  3. Generate ideas and be a thought partner.
  4. Complete tasks as a copilot.
  5. Interact with users.

Here’s what to do. Log into ChatGPT4 or your favorite LLM, copy and paste this text to discover suggestions for optimizing your company’s operations.  You’ll need to fill in a few details below to provide context.

“You’re the knowledgeable advisor to the CEO. Our company is a _______ to the ______ industries. We sell directly to ______ through this (distribution channel). I’m brainstorming ways to use generative AI to optimize my company, making our internal processes more efficient. I want ideas in five categories:

  • Ways to use Gen AI’s capabilities to generate text, images, audio or video.
  • Ways I can use Gen AI’s capabilities to process or synthesize text, image, video, data or audio.
  • Ways I can use Gen AI’s capabilities to generate ideas or be a thought partner.
  • Ways I can use Gen AI’s capabilities to complete tasks as a copilot.
  • Ways I can use Gen AI’s capabilities to interact with users.

Can you brainstorm ideas in each of the following categories for me?”

As you receive suggestions that spark your interest, follow up with prompts to dive deeper and gain more specific information.

Now that you’ve got ideas to optimize your business, ask Gen AI for suggestions to accelerate your company’s performance.

Use this prompt on ChatGPT 4 or your preferred LLM:

“You’re an advisor helping me decide how to incorporate Gen AI into my product (or service), based on the metrics that I want to drive. My company is a (company description) that sells (product description). We have (#) metrics we’re trying to drive: (list metrics)

Can you give me suggestions for Gen AI-powered initiatives that I can implement into my product (or service) to drive these metrics? Can you brainstorm ideas in each of the following categories for me?”

  • Ways to use Gen AI’s capabilities to generate text, images, audio or video.
  • Ways I can use Gen AI’s capabilities to process or synthesize text, image, video, data or audio.
  • Ways I can use Gen AI’s capabilities to generate ideas or be a thought partner.
  • Ways I can use Gen AI’s capabilities to complete tasks as a copilot.
  • Ways I can use Gen AI’s capabilities to interact with users.

Optimizing your operations and accelerating the performance of your products, services or company are two use cases that Gen AI is particularly well-suited for. These are classic examples of what I call Everyday AI.

Use these two prompts to get in the Gen AI game and begin creating the massive value that is your company’s right to create.

One other important fact. When you augment your business with Gen AI, you increase your company’s valuation.  CB Insights, the business analytics platform that provides market intelligence on private companies, just reported the following valuation premiums for venture-backed companies that are AI-augmented vs. those which are not AI-augmented in 2023.

  • Seed stage – 21% premium
  • Series A – 39% premium
  • Series B – 59% premium

Firms that are established and have a strong commercial presence will also increase their valuations as they lean towards becoming AI-driven. Gen AI makes every company a technology company.

It’s time to get in the Gen AI game? You can’t sit on the sidelines. If you aren’t sure where to start, shoot me a message.

The Future is Now: Training is Critical to Navigate the Gen AI World

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CEOs Must Get Trained to Chart Their Company’s Gen AI Path

At the World Economic Forum’s Annual Meeting in Davos earlier this month, several major consulting firms highlighted the promise of Generative AI. The key takeaway: Embrace Gen AI now or risk obsolescence! Selected findings:

  • 99% of companies plan to increase investments in Gen AI. – Accenture
  • 97% believe that Gen AI will transform their business over the next 3 to 5 years. – Accenture
  • 49% of CEOs say Gen AI will create new revenue streams in the next 3 years. – PwC
  • 44% of working hours are ripe for AI-augmentation or automation. – Accenture
  • Executives launching Gen AI in 12 to 18 months expect 15.7% cost savings and 24.7% productivity improvements. – Gartner
  • Headcount reductions from Gen AI implementation are projected to be 3.8% in 2024, 6.1% in 2025 and 8.2% in 2026. – Gartner

The message is clear: Gen AI adoption is accelerating. However, most employees feel unprepared:

  • 61% of workers will need retraining by 2027. – World Economic Forum
  • 60% of white-collar workers fear jobs loss from Gen AI. – Oliver Wyman
  • 57% report insufficient Gen Ai training from their employer. – Oliver Wyman
  • 57% are overwhelmed about integrating AI into their roles. – edX

So what’s a forward-thinking CEO to do? Get trained on Gen AI yourself first. Discover firsthand how it augments productivity, strategy and creativity. See how it enhances decision-making and saves time. Then, get your top team trained on real-world AI applications.

With you and your top team AI-enabled, have informed discussions about your Gen AI ambition. Where’s the potential? What possibilities exist? How can AI augment strategies and create better futures? What work is off-limits to Gen AI? What new skills are needed? How will you reskill your people?

The Executive AI Bootcamp starting February 1 is an excellent first step for CEOs. Check it out. If you are a CEO, and desire to lean into an AI-powered future, join us.

 https://www.youtube.com/watch?v=dO9x8yyyMeE

The Winds of Change are Blowing

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Develop Your Gen AI Strategy Now or Risk Falling Behind

Generative AI is the most important technological development in our lifetime. This is the year when businesses must harness the power of Gen AI or risk obsolescence.

The writing is on the wall. The recent EY CEO Outlook finds 62% of CEOs see an urgent need to leverage Gen AI to remain competitive, yet 61% find initiating this shift challenging. Meanwhile, McKinsey identifies Gen AI adoption as the #1 priority for CEOs in 2024. The time for action is now.

Gen AI is more than a passing fad. 97% of executives in a recent Accenture survey believe it will essentially reshape their business within three to five years. Early adopters are already realizing tremendous value, with expectations of 15.7% cost savings and 24.7% productivity gains in the first 12-18 months.

Yet, most CEOs I talk to don’t have a Gen AI ambition or vision. Most companies are still woefully unprepared. A Gartner survey found only 9% of CIOs have an AI strategy in place, with over one-third lacking any plans to formulate one. This lack of strategic vision leaves the door wide open for savvier competitors.

The future of your business depends on getting smart on Gen AI’s potential quickly. You must set the ambition and the vision of how your business can be optimized, accelerate performance and transform, augmented by Gen AI, and equip your top team with the knowledge and capabilities to use Gen AI in their personal workflows and identify company-wide high-impact use cases.

I coach and train CEOs and their top teams, to assist them in becoming more productive, creative and strategic, using Gen AI as their co-pilot. This Thursday, I am kicking off Executive AI Bootcamp: 30 Days to Reinvent Your Leadership, for a select group of 25 CEOs who are committed to embracing Gen AI now and in the future. I have three open spots for CEOs who are energized and committed to discovering Gen AI’s possibilities. Message me if you are interested and, if selected, the benefit you seek to receive from this free training.

Don’t get left out in cold as the winds of change blow past you. It’s time to move to future proof your leadership. Optimize your business for the age of AI. The time to start is now.

Here’s Why Smart CEOs are Embracing Gen AI

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Twelve months after the launch of generative AI large language model ChatGPT, one thing is certain. Gen AI has been widely accepted and adopted, being the on-ramp for tens of millions who seek an intelligent partner who can generate and synthesize text, code, audio, video and images. Think of it as a smart teammate who can brainstorm ideas, interact with customers and complete tasks.

As 2023 has been the year when gen AI went mainstream with individuals, 2024 will be the year when business follows. Over the next year, smart CEOs who have not yet discovered the powers of gen AI will adopt and implement AI solutions to boost productivity and increase profitability. Getting trained and incorporating gen AI into individual and company-wide workflows will move from novelty to necessity.

If you have not discovered the superpowers of gen AI, it is imperative to move quickly. This is no time for taking a “wait and see” attitude or to sit on the fence. If you need more facts and projections about the torrential growth and enormous opportunity of AI, consider the following:

Unprecedented global growth. AI is projected to contribute over $15 trillion to the global economy by 2030. Source: PWC Global 2023 Artificial Intelligence Study

Capture a competitive advantage. The AI investment forecast will approach $200 billion globally by 2025. Source: Goldman Sachs

Opportunities for early movers. 82% say AI may provide new attack strategies for adversaries. Source: KPMG 2023 CEO Outlook

Enormous productivity potential. $4.4 trillion is the potential productivity gain from AI. Source: McKinsey

Top investment priority. 70% of CEOs report generative AI is their top investment priority.  Source: KPMG 2023 CEO Outlook

Boards desire AI acceleration. 66% of board members want to accelerate the adoption of AI. Source: IBM

Quantity and quality of knowledge worker productivity rises substantially. AI increases knowledge worker productivity by 66% and work quality by 40% on certain tasks. Source: HBS and BCG.

 Leaders fear being unprepared for AI. 81% of executives say learning AI is mandatory. 79% fear being unprepared without it. Source: 2023 edX AI Survey

 Learning and applying AI tools will soon be mandatory. 77%s of executives say AI skills will become more important over the next two years. Source: 2023 edX AI Survey

Saves time. In IT, a 55% increase in productivity when generating code. In marketing and sales, an 80% reduction in time to marketing copy drafts. In customer service, a 75% potential reduction in volume of human-serviced contacts. Source: McKinsey

It’s getting better. The gen AI models are far from perfect, but they are improving rapidly. AI is either “good” or “excellent at 70% of managerial skills. Smart managers will use AI to make better decisions and improve their performance. Source: Indeed.

Widespread workforce retraining is required. 61% of workers will require retraining by 2027. Source: WEF Future of Jobs report

Everyone needs a smart teammate. AI is a smart, tireless teammate. 91% of executives would like AI to support them. 81% are excited to learn AI skills and apply them to their job. 75% hope many aspects of their jobs can be augmented by AI. Source: 2023 edX AI Survey

Still skeptical? The 2023 edX AI survey, taken by over thirteen hundred CEOs and C-suite leaders, found that 47% of the respondents believed “most” or “all” of the CEO role should be completely automated or replaced by AI – and 49% of the CEOs agreed!

The advent of gen AI marks a pivotal moment in technological evolution, and there’s no turning back. For CEOs, achieving proficiency in gen AI is not just beneficial, it’s imperative. This new era demands a transformation of the CEO’s role, leveraging AI to future-proof their leadership and pave the way for others.

Understanding and utilizing gen AI to enhance decision-making is the first step. Once mastered, it opens doors to vast improvements in business operations, and the development of innovative AI-augmented to products and services. The potential of gen AI extends to elevating your productivity, creativity and strategic thinking. To stay in the game and thrive, it’s time to get going on your AI journey.

 

Executive Teams Continue to Flounder Post-Pandemic: Here’s What CEOs Need to Do

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Four actions every CEO must take to shape their top team into a cohesive, high-performing unit.

Good CEOs create top leadership teams by selecting the best executives they can find. Great CEOs differentiate themselves by shaping a high performing top team that operates cohesively. But cohesive teamwork is on the decline the past three years.

According to DDI’s CEO Leadership Report 2023, CEOs don’t believe their top team is on the same page. Since the pandemic, more than two-thirds of CEOs say their executive team is ineffective at driving strategy. This problem is seen by other senior and mid-level leaders and creates a lack of confidence in the CEO and top team. Top teams may have high performing individuals, but still not work cohesively if CEOs don’t shape positive team dynamics and create consensus on the company’s top priorities.

The DDI findings are consistent with the results reported earlier this year from the Leadership Confidence Index, which showed the confidence CEOs have in their top teams has dropped precipitously since mid-2021, falling 7.1%.

Three key messages from these findings:

  1. CEOs are concerned about their top team members abilities to drive strategy, transform and reinvent the business.
  2. Top team members are concerned how they work collectively as a team, how they lead change, and how they role model a positive culture.
  3. The next-generation leaders (those who report into top team members) have the lowest levels of confidence about top teams, creating potential retention and succession risks.

It doesn’t have to be this way.  Great CEOs are obsessed with the psychology and performance of their top teams. They care about the dynamics of the team and how the team works together. They know a high performing top team can be a huge value creation lever.

The four actions smart CEOs can take to build a value creating top team are:

  1. Focus on the roles, then the team.
  2. Create clarity.
  3. Shape the team’s dynamics.
  4. Build a team to perform and transform.

Fail to focus on developing your team and you will experience mediocrity. Excellent performing top teams don’t get there by accident. Get these four actions right and you will shape a group of talented senior executives into a cohesive, capable and committed top team that creates great value.

Why are Executive Leadership Teams Failing to Perform?

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What Can Be Done?

If you are a CEO and you have lost confidence in the performance of your executive leadership team (top team), you are not alone.  According to a recent study, CEOs, top team members, and their direct reports have all lost confidence in the top team over the last eighteen months.

Results from the Leadership Confidence Index, released last month, shows the confidence leaders have in their top teams has dropped precipitously since mid-2021, falling 7.1%.

Developed by executive search and leadership advisory firm Russell Reynolds Associates, the Leadership Confidence Index captures the views of CEOs, C-suite level leaders, board directors and next generation leaders on their top team. Reflecting on the capability, the behavior and how they respond to key issues, leaders’ confidence in their top teams has trended downward of late.

Three key messages from this study:

  1. CEOs are concerned about their top team members abilities to transform and reinvent the business.
  2. Top team members are concerned how they work collectively as a team, how they lead change, and how they role model a positive culture.
  3. The next-generation leaders (those who report into top team members) have the lowest levels of confidence about top teams, creating potential retention and succession risks.

It doesn’t have to be this way.  Great CEOs are obsessed with the psychology and performance of their top teams.  They care about the dynamics of the team and how the team works together. They know a high performing top team can be a huge value creation lever.

The dynamics of a top team can make or break a company. Investors understand this and cite the quality of the top team as the single most important non-financial factor in evaluating a new IPO. When a top team works together with a common vision and supportive behaviors, the company is twice as likely to have above median financial performance. Yet most senior executives report their team is underperforming. How about you? On a scale of 1 to 10, how is your top team performing today and how should it be performing?

During the new normal as top teams are meeting regularly and in-person again, top teams need to raise their collective games to fulfill the needs of their stakeholders. The need for the top team to perform today and transform for tomorrow is particularly acute in this environment of economic headwinds.

If you are the CEO or a business unit president, consider the following:

  • Is your top team aligned strategically?
  • Is there a healthy working climate within your top team?
  • Do your team members trust one another?
  • Does your top team have the capability to successfully lead the company?
  • Is your top team embracing and leading change effectively?
  • Are your top team members growing, developing and reinventing individually and collectively?
  • Is your top team a positive role model for others within the company?
  • Is your top team transforming your business by embracing the opportunities of digital transformation and of ESG initiatives?
  • Does your top team have the necessary skills and mindsets to capture opportunities this year? In the future?

If you answered “no” to any of these questions, you are not alone. High performing top teams don’t become high performing by accident – they are built and attended to continually. Your top team should create tremendous value and be a competitive advantage. If not, you’ve got a problem.

The good news is as CEO and leader of the team, you can dramatically lift your team’s performance by partnering with a top team coach. Your top team coach will listen to you and show you how to create clarity, increase capability and build commitment within your team.  Through a series of customized team advance sessions, conducted over several months, you can build a high-performing top team while your team works on your business.

During the team advance sessions, all team members get better – individually and collectively. In a relatively short time, with focused effort, they will perform at a higher-level running today’s business, while driving transformation and building the future to which you committed. A top team in which you and your stakeholders will be confident.

What’s the price you pay if your top team is not high performing? Is that a price you can afford? Transforming your current team into a powerfully performing top team, Optimizing Your Top Team, is key for your company to thrive in today’s complex world – a competitive advantage that cannot be duplicated.

Top Reports for Healthcare CEOs in 2023

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Informative Resources for Executives to Create Massive Value

For the first time in person since 2020, the 41st annual J.P. Morgan Healthcare Conference is taking place January 9-12, in San Francisco. Over 8,000 attendees representing 550 healthcare companies have gathered for the premier conference, widely considered to be the largest and most informative healthcare investment symposium in the industry. It connects global industry leaders, emerging fast-growth companies, innovative technology creators and members of the investment community.

With hundreds of CEOs meeting face-to-face for the first time in three years, the networking and insights shared this week are a welcome return to the past.  With the higher cost of capital, a focus on tightening the balance sheet, geopolitical concerns, and other factors, we are in an era that requires innovation and value creation. Every healthcare company CEO needs all the resources, connections, expertise and insights they can get to help their company win.

As a CEO executive coach working exclusively in the healthcare sector, I’m asked daily by my clients and others for connections, information, and updates about what’s new in our industry. Since work obligations made it impossible to attend live and converse with colleagues at this year’s event, here’s a list of the most useful reports for healthtech sector CEOs (and other leaders) from the past year I’m recommending.

The selected CEO content comes from research conducted by EY, CB Insights, Accenture, Pitchbook, SVB, McKinsey, KPMG and more, with a short description of the report and a link for quick access. Addressing topics like disruptive technologies, digital health, the future of healthcare, the growing role of private equity, the strategies of the biggest players, these reports share valuable insights. Which forces are transforming the healthtech industry? Which trends deserve the most attention? Which innovations are likely to disrupt? You’ll find the answers within this baker’s dozen list of informative free reports. As you review the material, even in choppy economic waters, you will see there is still a tremendous opportunity for healthtech companies to grow and become more valuable.

Pulse of the Industry Report 2022: In today’s disruptive healthcare environment, how will medtech transform? – EY

To gain deeper insights on where medtech has been and where it’s headed, download the full annual Pulse of the Industry medical technology report. There you will find original perspectives on how medtech can rethink innovation to address new challenges and opportunities in commercial models, supply chain and talent management. https://tinyurl.com/5n8ysx2t

Digital Health and Medtech: New Signals for Transformation – Accenture

Globally, healthcare is experiencing increasing pressure and disruption, from affordability challenges to shifting patient expectations. Care is expanding from hospitals to ambulatory and at-home care, but the industry remains at the beginning stages of having the capabilities to meet this shift. Medtech must find an approach that reflects and benefits from the speed of transformation now enabled by digital innovation. Five trends that can help medtech companies mature and scale their capabilities to thrive in this new paradigm of digital health are shared. https://www.accenture.com/us-en/insights/life-sciences/rise-digital-health

The Future of Healthtech 2022 – SVB

Dramatic shifts over the past year indicate that a market rebalancing is underway, with investments and valuations lowering from 2021’s boom. However, the healthcare industry is more resilient during periods of downturn and remains ripe for innovation.

https://www.svb.com/trends-insights/reports/healthtech-trends-report

2022 State of VC, PE & M&A: Health Tech – Axios Pro

What forces are transforming the healthtech industry right now? Which trends deserve the most attention? Which firms are making the biggest impact on VC, PE and M&A? This report answers those questions. https://www.axios.com/pro/venture-capital-private-equity-manda

Private Markets Rally to New Heights – McKinsey Global Private Markets Review 2022

This annual review of private market investing shares research on industry dynamics and performance. Private markets bounced back last year, despite a new set of risks with a war, higher inflation and interest rates, supply chain and labor challenges. Private equity continued to drive global growth. Private equity fundraising ‘winners’ do so by growing their flagships and raising more frequently. https://tinyurl.com/5yc627u7

US Private Equity Breakdown 2022 – Pitchbook

After a busy start to the year, US private equity dealmakers are finally feeling the bite of higher interest rates, with activity in Q3 collectively slowing across M&A, growth equity and recap deals by more than 20% year-over-year. Yet what may seem like a dramatic decline could also be considered a reset. Far from being a new normal, 2021’s blistering pace of activity was an aberration, making the “old normal” of the pre-pandemic years a better comparison for private equity, according to this report. https://pitchbook.com/news/reports/q3-2022-us-pe-breakdown

Book of Strategy Maps – CB Insights

This 67-page coffee table book of strategy maps shines a light on the strategies behind some of the world’s most important companies – from JNJ, to CVS Health, to Optum.

https://www.cbinsights.com/research/report/book-of-strategy-maps/

2023 US Venture Capital Outlook – Pitchbook

With 2022 coming to an end, many investors are happy to turn the corner on a year that saw crypto ride a remarkable rollercoaster and VC firms clutching their pearls. 2023 is shaping up to be an even more stress-inducing ride for investors, according to this outlook. But while analysts predict some downward movement, there is of course always some upside—if you know where to look. https://pitchbook.com/news/reports/q4-2022-pitchbook-analyst-note-2023-us-venture-capital-outlook

H12022 Digital Health Review – Fletcher Spaght

The report contains details on revenue performance, investments and exits (M&A, IPO).

https://www.fletcherspaght.com/post/h1-2022-digital-health-review

Trust Barometer Global Report 2022 – Edelman

The report is published in January and covers a range of timely and important societal indicators of trust among business, media, government and NGOs, shaping conversation and setting the agenda for the year ahead. https://tinyurl.com/2s4z9kpk

Book of Market Maps – The CB Insights

The reports consist of 31 pages about healthcare companies that are navigating the marketplace. Fascinating and comprehensive. https://www.cbinsights.com/research/report/book-of-market-maps/

2022 Year in Review Images – McKinsey

Reflecting on the past year sheds light on pivotal moments and forges the path toward a resilient future. The past year has been anything but ordinary. The unnerving combination of war, inflation, energy scarcity, and climate change wasn’t what anyone expected as life was just beginning to move forward from the COVID-19 pandemic. 2022 has also proven to be a year of resilience. McKinsey designers put a lens on the images that helped bring our insights to life, and their selections are telling.

https://www.mckinsey.com/featured-insights/2022-year-in-review/2022-the-year-in-images

CEO Outlook: Growth Strategies in Turbulent Times – KPMG

Tested by enormous challenges in quick succession — a global pandemic, inflationary pressures and geopolitical tensions — it’s encouraging that CEOs, surveyed in the 2022 CEO Outlook, were confident in their companies’ resilience and relatively optimistic in their own growth prospects. The 2022 CEO Outlook draws on the perspectives of 1,325 global CEOs across 11 markets to provide insight into their 3-year outlook on the business and economic landscapes. https://tinyurl.com/5n8mnvba

CEO 2022 Study: Own Your Impact: Practical Pathways to Transformational Sustainability – IBM

The IBM Institute for Business Value, along with Oxford Economics, interviewed 3,000 CEOs from 40+ countries and 28 industries as part of this series. These conversations focused on executives’ perspectives on leadership and business; their changing roles and responsibilities; and sustainability, including how they are addressing challenges, what they see as opportunities and visions for the future. https://www.ibm.com/downloads/cas/6NJEKDD8

For additional CEO resources for 2023, see The CEO’s List of “Must Have” Tools for 2023: The Best New Studies, Books, Articles, Apps and Resources for CEOs Who Seek To Create Value in an Uncertain World.

Sometimes it is the smallest insight that can have the biggest returns. When CEOs are equipped with the right insight, at the right time, they make better decisions and all stakeholders benefit. Invest some time reviewing this excellent content to help you lift your game. To become the exceptional, value-creating CEO you are meant to be.