Organizations: Who can gain competitive advantage?

|May 11, 2015 0
Ninety-five percent of organizations use long-range planning; The CFO is the CEO's main partner, finds Gartner

SINGAPORE: Ninety-five percent of organizations that conduct long-range planning (five to 15 years) are more likely to outperform organizations that don’t plan ahead, according to Gartner’s 2015 survey of CEOs and senior business executives.*

“Long-term strategic planning can lead to benefits,” said Steve Prentice, vice president and Gartner Fellow. “More than 50 percent of organizations that underperformed did not engage in very long-term planning, and those that did, looked out on average 16 years. In the case of the outperforming companies, over 80 percent carried out planning that was very long term, and they looked even further ahead – a mean of 22 years.

Long-term strategic planning is a collaborative exercise for organizations’ senior management and directors, and the survey revealed that the CFO is the primary choice of partner by far for the CEO.

Overall, almost 40 percent of respondents named the CFO as either the first, second or third choice of partner for the CEO. The next most popular choices were the chief strategy officer (27 percent) and the board of directors (26 percent). The CIO, in contrast, was named as first, second or third choice by just 17 percent of respondents, behind chief marketing officer (18 percent), chief operating officer (20 percent), chairman (20 percent) and president/owner (23 percent).

The CFO is the primary choice for both under performing and outperforming organizations. The involvement of the board of directors and chief marketing officer declines to 24 percent and 14 percent, respectively, in these organizations. Overperforming organizations tend to increase the contribution of more technical roles, such as CIO, CTO, chief innovation officer, chief risk officer and chief digital officer.

“For CIOs to be seen as key contributors and advisors regarding the changes and disruptions that technology brings, they must seriously assess their position internally,” said Mr. Prentice. “They should position themselves as informed and objective innovators who understand the disruptive role technology will play in business over the next 10 to 20 years, and who can make an essential contribution to long-term and very long-term planning activities within their organization. They should look to the longer term, and identify, explore and experiment with potentially disruptive technologies and technology-enabled capabilities to understand, and be able to demonstrate and articulate, their likely business impact.”

Prentice concluded: “CEOs’ emphasis on long-range planning means that only CIOs who look ahead will stay ahead.”

More detailed analysis is available in the report “2015 CEO Survey: CEOs’ Emphasis on Long-Range Planning Means That CIOs Who Look Ahead Will Stay Ahead.” This report is part of the Gartner Special Report “C-suite Perspectives: 2015 CEO Survey,” which looks at how growth and technology are top priorities for CEOs, even as the need for deep structural change is not fully recognized. The Special Report can be viewed at http://bit.ly/ceosrvy.

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