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Dealing with complexity and uncertainty

I found some time to look at IBM’s last CEO Study which is named “Capitalizing on Complexity“. The main focus of the study is the increasing complexity and how to CEO’s are dealing with it. They categorized some of them as “Standouts”:

Today’s complexity is only expected to rise, and more than half of CEOs doubt their ability to manage it. Seventy-nine percent of CEOs anticipate even greater complexity ahead. However, one set of organizations — we call them “Standouts” — has turned increased complexity into financial advantage over the past five years.

Big differences between the Standouts and the others are:

  • Decision style: (54% difference between Standouts and others) “… quick decisions even when facing uncertainty.”
  • Simplify operations: (30% difference between Standouts and others) “… the need to simplify their operating
    strategies in order to better manage complexity.”
  • Business model innovation: (81% difference between Standouts and others) Types of business model innovation considered:
    • Enterprise model: Specializing and reconfiguring the business to deliver greater value by rethinking what is done in-house and through collaboration.
    • Industry model: Redefining an existing industry, moving into a new industry, or creating an entirely new one.
    • Revenue model: Changing how revenue is generated through new value propositions and new pricing models.

My conclusion is very simple, who’s dealing with increasing complexity and uncertainty in a better way can innovate more, this is the key for success.

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