The 2012 Global IBM CEO Study, “Leading Through Connections,” distills the collected insights from face-to-face conversations with more than 1,700 CEOs in 64 countries and 18 industries. The study results reveal that there are three imperatives that apply broadly across all geographies and industries, including the energy and utilities industry: Empowering employees through values; engaging customers as individuals; and amplifying innovation with partnerships.
For the energy and utilities (E&U) industry, specifically, the three imperatives are reflected in some interesting results. To take just one aspect of the findings, which falls in the imperative of engaging customers, it was notable that 67 percent of the 60 E&U CEOs who were interviewed see customer insights as the most critical focus area. (Insight into operations was close behind, with 55 percent of E&U CEOs citing it -- higher than the 50 percent of the total global CEO sample.)
Digging deeper, we learned that, once those insights are gained, E&U CEOs believe they can do better by leveraging this information. When CEOs were asked how effective their organizations are at deriving value from data, 42 percent of E&U CEOs rated themselves well, compared to 54 percent of outperformers in the global CEO sample. Similarly, when it comes to translating insights into action, again, just 42 percent of E&U CEOs gave themselves high marks, versus 57 percent of outperformers in the global sample.
It is well recognized that today’s consumers are more connected and empowered than ever before, and their expectations for utilities are raised by the interactions they have with their banks, Web retailers, and other organizations. This is not a new concept for E&U CEOs and thus when asked how they will change to meet customer expectations in the next three to five years, E&U CEOs revealed that they need to improve their understanding of individual customer needs, and also improve their response time to market needs. (By the way, those two changes were ranked numbers two and three. The number-one change E&U CEOs said they need to make to meet customer expectations is to increase social and environmental responsibility -- which is another fascinating topic, in itself.)
Cross-referencing these CEO Study findings with another recent study, “Knowledge is Power: Driving smarter energy usage through consumer education”, we see that understanding and engaging customers yields increased acceptance and recognition of value in new technologies. So the success of smart grid investments, for example, that require consumer engagement to meet some of their goals for reducing peak demand or overall energy consumption, hinges on this need CEOs have articulated to do a better job of understanding customer requirements, and turning that understanding into action.
The very positive conclusion that can be made from these study results is that energy and utilities CEOs understand what is happening with the empowered consumer. They understand the need to engage those consumers as individuals (so they are very much in synch. with that cross-industry theme from the CEO Study). And they can pinpoint the areas for improvement and develop a better capacity to take action, based on the insights gained from that understanding of their customers. For an industry that until somewhat recently talked about “ratepayers” instead of “customers,” this new mindset shows an impressive degree of adaptability and a good understanding of changing market dynamics.
To find out more about what energy and utilities CEOs had to say – about, for example, the rise of social media – the best way is to ask your IBM contact to share the E&U-specific results with you.
To read the results of the full study and see what all 1709 CEOs from across industries and across the globe had to say, download the report.