A few weeks back, IBM released the results of its study of more than 1,700 CEOS from 64 countries and 18 industries worldwide, revealing a burgeoning trend toward openness, transparency and employee empowerment from the command-and-control ethos that has characterized the modern corporation for more than a century.
Technology is the key enabler of this shift. The IBM study found that a majority (71 percent) of global CEOs regard technology as the number one factor to impact an organization’s future over the next three years—considered to be a bigger change agent than shifting economic and market conditions.
Across all aspects of their organization—from financials to competitors to operations—CEOs are most focused on gaining deeper insights about their customers. Seven out of every ten CEOs are making significant investments in their organizations’ ability to draw meaningful customer insights from available data.
Given the data explosion most organizations are facing, CEOs recognize the need for more sophisticated business analytics to mine the data being tracked online, on mobile phones and social media sites. The traditional approach to understanding customers better has been to consolidate and analyze transactions and activities from across the entire organization. However, to remain relevant, CEOs must piece together a more holistic view of the customer based on how he or she engages the rest of the world, not just their organization. The ability to drive value from data is strongly correlated with performance. Outperforming organizations are twice as good as underperformers at accessing and drawing insights from data. Outperformers are also 84 percent better at translating those insights into real action.
In conjunction with the report, IBM’s Lee Han Tjioe took a closer look at the 10 percent of respondents from the insurance industry. The study reveals three imperatives impacting geographies and industries: Empowering employees through values; engaging customers as individuals; and amplifying innovation with partnerships.
CEO Study customer imperatives are particularly relevant to the insurance industry, Tjioe observes. “Consumer interaction is more diverse than ever before. Demographics can no longer predict customer behavior—if it ever could.”
Insurance CEOs have begun recognizing this and moving their organizations toward a customer-centric approach. Of the 147 Insurance CEOs interviewed for the study, 76 percent identify customer insights as the most critical investment area, compared to 73 percent of the global CEO sample.
A majority, 71 percent, aim to improve the response time to market needs, and 69 percent to improve the understanding of customer needs—a big step up for an industry that for decades lived in a tightly regulated seller’s market, where customer expectations hardly mattered.
This is the age of multi-modal interaction, or simultaneous access to multiple interaction points, and insurance CEOs have been hearing the message, Tjioe remarks. “They plan to extend the traditional ways of interacting—agents, brokers and call centers—to a more balanced approach that includes the Web and peer-group interaction. Specifically, insurance CEOs intend to shift the focus away from one-way advertising via traditional methods to social media. Today, 35 percent of them see traditional media as one of the three most important engagement mechanisms and this will drop to 9 percent over the next three to five years.”
Conversely, Tjioe observes, the insurance industry’s use of social media will rise from 4 percent today to a whopping 51 percent within the next three to five years. “Customer focus for Insurance CEOs means getting everybody involved: employees, for whom flexibility and communicativeness become the most important personal traits, partners, including agents and brokers, and finally the CEOs themselves —68 percent of Insurance CEOs see customer obsession as the key characteristic that a successful CEO needs.”
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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