This week I finally got a chance to sit down and digest IBM's latest Global CEO Study, newly published last month and entitled Capitalizing on Complexity. This marks the fourth study IBM has done (they complete them once every two years), and I've personally found them to be really useful for getting out of the weeds and looking at the big picture.
This report is based on the results of face-to-face meetings with over 1500 CEOs and other top leaders across 60 countries and 30+ industries. These leaders are asked all sorts of questions about their business challenges and goals, then IBM analyzes the answers and segments the respondents to isolate a group of high-performing organizations they call "standouts." The standouts are then further analyzed to find out how they are addressing their challenges and goals differently than average organizations.
As a quick summary (but don't just read my summary, go download the study for free), IBM found a big change this year. In the past three studies, leaders identified their biggest challenge as "coping with change." This year, they identified a new top challenge: "complexity."
If you've been reading marketing collateral or web copy from your vendors over the past year (someone must read that stuff...) this will come as no surprise to you. How many things have you read that start with something like: "In our increasingly complex world..." or "In the new deeply interconnected business landscape..." If the marketing folks are saying it, it must be true.
But I digress. Here's IBM's punch line:
More than 79% of CEOs see the world continuing to get more complex. And over 50% of CEOs doubt their ability to manage through this complexity.
According to IBM, the standout companies identified in the study have found ways to manage complexity that give them a competitive advantage.
Which bring us to my punch line:
Many of the ways standout companies are managing complexity sure sound a lot like the way we do things when we do them the open source way.
A few key findings from the report in bold below, and then some comments from me.
Finding #1: Creativity is the most important leadership quality, according to CEOs.
I loved this one.
I believe organizations doing things the open source way enable creative leadership to emerge much more quickly and efficiently than it can in traditional organizational structures. Why?
The power of meritocracy. When a creative idea can come from any person at any level of the organization at any time and have a chance to survive, good ideas often do survive.
When people see their good ideas survive rather than dying on their way through the bureaucratic gauntlet, they have an incentive to share more good ideas. Sometimes seeing your idea realized is an enormous reward on its own.
And if you have good ideas over a long period of time, people may start looking at you as a leader. Since a creative leader is rewarded better in a meritocracy, it should be no surprise that creative types tend to like working in meritocracies.
Non-creative leaders don't like meritocracy as much. Why? Because non-creative leaders are more likely to be successful if rewards are based on things like power and influence than the strength of their own ideas.
Finding #2: The most successful organizations co-create products and services with customers, and integrate customers into core processes.
We spend a lot of time on opensource.com highlighting examples of co-creation (and related ideas like open, user-driven, and customer-driven innovation).
The open source world was co-creating before co-creating was cool.
I'd like to think the success of the open source way in the software world was the inspiration for many of these experiments, whether the experimenters recognize it or not.
Finding #3: Better performers manage complexity on behalf of their organizations, customers, and partners.
I hadn't really thought about the open source way's ability to help manage complexity until I read this report. But thinking about it now, I wonder if running things the open source way makes it possible to manage complex projects more efficiently.
In my experience, most projects run the open source innovate faster than projects run in more traditional ways. Some of this has to do with the given enough eyes, all bugs are shallow effect of open source.
Beyond that, from a organizational perspective, I believe there is less rigidity to the structure of open source projects. Leadership can change quickly as needs change. Because the organization is also more fluid, resources can be moved from one project to another quickly, without lots of wrangling over "headcount" and other similar issues.
But perhaps the most important way the open source way manages complexity is by embracing open standards. Inside and outside of software, the use of open standards allows for better collaboration between different organizations with different interests. This openness and collaboration probably does more to reduce complexity than anything else.
Can you think of other ways the open source way would help CEO types manage complexity better? If complexity is today's grand management challenge, as IBM tells us, I expect the open source way could teach CEOs a lot of lessons they could use.
I'd love to hear what you think.