A new way to grade Aussie CEOs

IBM's CEO Survey shows successful leaders are using marketing and technology to discover customers' personal spending habits. As this trend grows, those who don't will be vulnerable to takeover.

We now know a way to find takeover targets – pick the chief executives and boards who have not cottoned on to the new ways they can use their market position.

You will remember that the Telstra 2012 Productivity Survey isolated that companies that measured their productivity were among Australia’s best performers (Waking up to productivity, March 28). Unfortunately a minority of Australian CEOs understand this but the laggards are starting to grasp the implications.

Now IBM has produced remarkable research on what is driving successful companies, both globally and in Australia. Again, I suspect too many of our CEOs are worried about short-term problems to cotton on to how the winners have changed their ways of doing business.

The IBM survey first emphasises that the successful Australian and global companies have found ways to have less structured organisations and engage their employees through openness. But I am going to concentrate on how companies are achieving success by gaining a better understanding of their customers.

Enlarge the graph below and see whether the company you are invested in or work for uses these techniques.

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In Australia Coles and Woolworths have shown the way to use massive marketing, backed up by technology, to discover the personal spending habits of their customers via loyalty programs.

But the IBM survey shows that this is just an example of a global wave to engage customers both large and small.

It is just as important for a bank, accountancy firm, and food supplier or motor parts maker to know exactly what their customers are doing. Simply making the product or offering a service is no use unless the customers want it.

CEOs globally – and especially in Australia and New Zealand – identify customer insights as their most critical investment area.

In other words, they are prepared to invest to know more and more about their customers and to adjust their business patterns to their customers.

Of course, relating with customers and the community is much more than analysing databases and the IBM survey shows a dramatic change in the way companies plan to engage with their community.

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Note the enormous fall in traditional media and the rise in social media and websites. The key to the future of many companies will be how they adapt to this new customer and community environment. If they fail, those who know how to do it will take over.

A report on the IBM 2012 CEO Study is available here:

2012 CEO Study.pdf 2012 CEO Study.pdf