Managing Change

There is a new global study by IBM on managing change . . . here is a summary I thought was interesting from Forbes.com. As usual, talent is key!



Managing change is an inevitable task for the modern chief executive, yet almost one in five feel a lack of control over the process, a new study from IBM suggests.

According to The Enterprise of the Future, a biennial global study conducted by IBM (nyse: IBM - news - people ), the number of CEOs successfully managing change increased to 61%, from 57% in 2006. At the other end of the spectrum, those corporate leaders reporting "limited or no success" in managing change increased to 19%, from 12%.

Today's CEOs are running their companies in a dynamic business environment, with industry-wide or global events not always within their control.

Overall, CEOs rate their ability to manage change 22% lower than their expected need for it, a "change gap" that has tripled since 2006. In other words, eight in 10 CEOs are expecting "change," but only six in 10 say they have been able to adapt successfully.

The idea of change is very broadly defined in this, the third edition of IBM's study, conducted in conjunction with the Economist Intelligence Unit. The first was published in 2004. This is the largest CEO sample size to date. Change is really defined by the 1,130 CEOs in this focus group, rather than by IBM.

The report includes business and public sector leaders from 40 countries across a variety of industries and geographic locations. Of the companies included, 19% employ more than 50,000 people, while 22% have less than 1,000 employees.

IBM asked these CEOs, in person, what they think has driven this change by listing nine external forces affecting every industry--market, socioeconomic, macroeconomic and technological factors, people skills, globalization, regulatory concerns as well as environmental and geopolitical issues. Based on CEO responses, the top three were market factors, people skills and technological factors.

More specifically, CEOs said that if they are to successfully manage change, they must focus on their customer base.

How do they intend to do this? CEOs said they will invest company resources into global integration, partner collaboration and corporate social responsibility (CSR). Woven into that trio is the hunt for talent, which is scarce these days.

Jim Guyette, president and CEO of Rolls-Royce North America (other-otc: RYCEY.PK - news - people ), had comments published in the study.

"A few years ago, we were a national company," Guyette said. "Now we're a global company. Our integrated supply chain must adapt to meet demand in 50 countries. We're going to have to bring people in from the outside."

In IBM's research, Nintendo (other-otc: NTDOY.PK - news - people ) is described as an exemplary organization since it partnered or collaborated successfully by directly connecting with customers to meet the demands of the changing marketplace. The Japanese videogame company's wildly popular home gaming console, the Wii, is a product of that.

On the CSR front, IBM features Marks & Spencer (other-otc: MASPY.PK - news - people ), a British retailer that has dedicated approximately $390 million over five years to becoming a more socially responsive operation.

A vast majority of companies worldwide are acting as M&S has, but some CEOs are struggling to put CSR into practice, according to the research. The concern about environment issues varies by continent.

In the study, IBM learned that CEOs said they intended to invest 25% more of their company's resources in specifically CSR-related activities over the next three years.

"Our company is investing extensively in corporate social responsibility," said Yves Carcelle, chairman and CEO of Louis Vuitton. "We need to be a reference in this domain. As the leader in the luxury industry, we have to stay ahead."