Openness is a success factor in the modern company, and social media is the means of enhancing it, a new survey of chief executive officers worldwide has found.
Social media will soon be the communications tool of choice for leaders, with the CEOs in the global survey predicting a four-fold increase in its use by leaders within five years.
At present, just 16% of the 1,700 CEOs who completed a survey by technology company, IBM, use social media, but the respondents expect that to increase to 57% within a few years.
The disastrous outcome for EnergyWatch – which has been brought to its knees by the racist posts of its former CEO, Ben Polis – illustrates how risky social media can be in the hands of ill-prepared leaders.
CEOs and other c-suite executives are “off-to-school” to master the art of social media communications skills, according to Sarah Adam-Gedge, the head of IBM’s global business services. “I need to be off-to-school,” Adam-Gedge tells LeadingCompany, while declining to comment on Polis’ gaffe. “I think all CEOs are off to school, but the biggest risk is not knowing how to access the world of social media.”
Hand-in-hand with social media comes a new emphasis on “openness”.
The survey finds: “CEOs are changing the nature of work and leadership by adding a powerful dose of openness, transparency and employee empowerment to the command and control ethos that has dominated modern enterprise for more than a century.”
Companies that emphasise openness deliver better returns both in revenue growth and in profits, the survey finds. “Those that are more open are 30% more likely to be successful,” says Adam-Gedge, who is involved in the CEO interviews that are a key part of the survey – it is not done online – and also provides one-to-one feedback on the results to participants.
The openness that delivers results is – specifically – between leaders and employees, customers and partners, Adam-Gedge says.
With employees, that openness includes finding ways to engage, either one-to-one or in groups, or through forums in which leaders listen and take action as a result of what they hear. “Change programs are difficult as we know, but organisations that are more open have more success,” she says. “And that goes straight to the bottom line.”
With customers, social media is again expected to make the biggest difference. “Most engagement with customers today is face-to-face, but the rise of social media is going to completely outweigh that,” Adam-Gedge says. “Companies can work out what the individual is after. I am a frequent traveller, so the organisations that work our my personal preference from kids underwear to airport loungers will get me to come back and spend more.”
Trust, an outcome of openness, is essential to the third group – business partners – whom leaders hope to reach with a more open approach. Outperforming companies are more often “partnering” with organisations outside their own. “Collaboration is about having shared outcomes, beliefs and goals, not just contracts,” Adam-Gedge says.
The burgeoning coal seam gas sector is a case in point, relying on partners to build pipes and transport the product under water, skills that they do not have. Says Adam-Gedge: “They can’t do it all themselves. We don’t have a lot of experience in coal seam gas. These companies are at huge risk if the pipeline is not built.”
Retail and wholesale companies are becoming closer. “I was talking to the chief marketing officer of a branded food company who wanted to get closer to consumers, but couldn’t because the retailer is between them,” she says. “So now they are going to the market with the retailer, both going to the footie match to build brand awareness.”
Key to the success of a four-fold increase in the use of social media is being able to manage the influx of data with analytics, and CEOs have told IBM that they see technology as the number one factor that will influence their business, she says.
Despite this, the chief information officer, formerly the go-to IT executive, is being ousted from their role by the “chief marketing officer” – a new c-suite role that has emerged in recent years. Because the CMO has carriage of the strategy in the new world of social media communications, they are ascending in importance at the expense of the CIO.
By 2017, the CMO will have a bigger IT budget than the CIO, Adam-Gedge observes. This has led Adam-Gedge’s division of IBM, global business services, to recently replace regular surveys of CIOs with surveys of CMOs.
IBM will release the full details of the biennial CEO study survey on May 23.