IBM Global CEO Study The Government of the Future

© Copyright IBM Corporation 2008

IBM Global Business Services

IBM Global CEO Study

The Government of the Future

IBM CEO StudyMessages & Insights

July 2008

Global CEO Study 2008 | May 2008 2 © Copyright IBM Corporation 2008

We spoke to 1,130 CEOs and Public Sector Leaders to determine the characteristics of organizations of the future

How are organizations addressing: New and changing customers and clients – needs and issues Global integration – changes within the value chain Organizational innovation – their response to these changes

ANALYSIS

Quantitative and Qualitative

Current behavior Investment patterns Future intent Choices of financial outperformers Case studies of excelling organizations

SCOPE & APPROACH

1130 CEOs and Public Sector Leaders

One-hour interviews 78% Private, 22% Public Sector 32 Industries 33% Asia, 36% EMEA, 31% Americas 80% Established, 20% Emerging

Economies


The wisdom of the Executive Leaders led us to the five core traits of the “Enterprise of the Future”

Core Traits

Hungry for change

Innovative beyond customer imagination

Globally integrated

Disruptive by nature

Genuine, not just generous

1 2 3 4 5


Public Sector leaders are developing citizen centric solutions and joining up government – we are observing similar trends in the private sector

PUBLIC SECTOR LEADERS CORE TRAITS

1. Hungry for change: pursuing transformation programs as a means of meeting elevated expectations, despite financial constraints. Implementing sophisticated approaches to manage complex change.

2. Innovative beyond customer imagination: developing citizen centric solutions to deliver enhanced, tailored services and provide increased transparency and accountability.

3. Globally integrated: increasingly collaborating with different public bodies, NGOs and the private sector, sometimes even internationally. Considering more flexible organizational models, focused on core competencies.

4. Disruptive by nature: have fewer levers at their disposal than the private sector, but are using new technologies to develop innovative services and ways of working, delivered to citizens in new ways.

5. Genuine, not just generous: recognising increased citizen and public sector awareness of CSR issues to lead on CSR issues; through developing policy, implementing initiatives or acting as an exemplar through their own behaviors.

HigherLower

PRIVATE vs. PUBLIC



The Government of the Future is …

Hungry for Change


Public Sector Leaders continue to face a significant change gap, similar to their Private Sector peers, but are less confident about managing the change ahead

* Difference or ‘gap’ between expected level of change needed and past success in managing changeSource: IBM Global CEO Study 2008; n (2006) = 709, n (2008) = 1104, n (Government)= 180

Change Needed

No/limited Change

Moderate Change

Substantial Change

No/limited Success

Moderate Success

Successful

Past Change Success

Hungry for Change

77%

56%

78%

55%

83%

61%

15%

27%

12%

16%

11%

20%

8% 17%27% 19%6%9%

ChangeNeeded

PastChangeSuccess

ChangeNeeded

PastChangeSuccess

ChangeNeeded

PastChangeSuccess

2006 2008

23 %CHANGE GAP*21 %

CHANGE GAP*

2008

22 %CHANGE GAP*

Public Sector Leaders Global CEOs


Are you ready to develop or enhance the competencies that are needed to drive the change ahead?

How far are you on the change journey?

How do you respond to budget constraints and changing priorities?

What are the particular challenges that make change difficult to manage in your organization?

Does your organization have the skills required to manage complex change programs?

Hungry for Change




Innovative Beyond Public Imagination


Public Sector Leaders see more positive potential with informed and engaged citizens and stakeholders and are rapidly increasing their investment

Source: IBM Global CEO Study 2008, n (Global) = 1061; n (Government) = 177* Total investments: all asset investments + all investments in R&D, marketing and sales

6%

84%

10%15%

75%

10%

Global CEOs

Public SectorLeaders

Positive Impact

No Impact

Negative Impact

Rise of the informed, engaged citizen and stakeholder

Global CEOs

18%INCREASE 25%

INCREASE

PS Leaders

22%

26%28%

35%

Investment*

past 3 years

Investment*

next 3 years

Investment*

past 3 years

Investment*

next 3 years

Innovative beyond Public Imagination


Are you ready to meet the rising expectations of citizens, and develop new ways of engaging with your stakeholders?

Does the potential exist to deliver more tailored services to your citizens, based on an enhanced understanding of their needs?

Can you measure the extent of citizen participation in, and satisfaction with, the delivery of services?

What are the barriers in your organization to effective collaboration?

What is your organization doing to create a collaborative culture?

Innovative beyond Public Imagination




Globally Integrated


Public Sector organizations are pursuing different types of integration*

Source: IBM Global CEO Study 2008; * n (Public sector) = 38

Both sides equally important0Public Sector

3 2 1 0 1 2 3

Limited Global CooperationWide Multi-lateral Cooperation Globally

Everything in Home Country/Region Intensive Use of Near/Off-Shoring

Exclusive Use of Public/NGO Organizations

Intensive Use of Private Sectorfor Services

Limited Multi-lateral CooperationWide Multi-lateral Cooperationwithin Own Geography

*Note: We observed different levels of integration based on a number of factors, including type of business, jurisdiction, political factors, and societal expectations.

Globally Integrated


Are you ready to become a more fully integrated government organization?

Are there opportunities for your organization to become more integrated?

Are there opportunities to develop a more flexible and efficient operating model?

What are the constraints in your organization to becoming more integrated?

Do you have and are you developing leaders that think and act with integration in mind?

Globally Integrated




Disruptive by Nature


Public Sector Leaders are strongly focused on collaboration – internally and externally

Business Model Innovation Preferences

Source: IBM Global CEO Study 2008; n (Global) =350; n (Government) = 107; Strong focus on BMI type includes 6 to 7 scores on a 1 to 7 scale (69% of total population)

13%

25%

22%

55%

7%

26%

34%

18%

Global CEOs

Public Sector Leaders

Enterprise Model

Revenue Model

Industry Model

Multiple BMI

Enterprise Model Innovation Focus

Global CEOs

Public Sector Leaders

41%

67%

54%

67%

Work WithinOrganization

Intense Collaborationwith External Partners



Are you ready to innovate?

Are you collaborating with other organizations – public, private or internationally?

Are you exploiting the potential offered by new technologies to deliver new services and change your ways of working?

What are the barriers to realizing innovative business models for your organization?

How do you encourage innovative ideas and nurture them through to implementation?





Genuine, not just Generous


Public Sector Leaders are increasing investment to meet growing expectations from citizens and stakeholders

Increasing citizen/stakeholder expectations of social responsibility

Source: IBM Global CEO Study 2008; n (Global) = 794; n (Government) = 130; * Total investments: all asset investments + all investments in R&D, marketing and sales

78%

7%

23%

20%

67%

13%

Positive Impact

No Impact

Negative Impact

14%

17%

20%

25%

Investment*past 3 years

Investment*next 3 years

Investment*past 3 years

Investment*next 3 years

24%INCREASE 26 %

INCREASE

Global CEOs PS Leaders


Global CEOs

Public SectorLeaders


Are you ready to meet the increasing expectations of citizens and the private sector regarding CSR?

Are you collaborating with others on CSR issues?

Does your organization have a strategy and someone at the most senior level responsible for CSR issues?

Is your organization a leader on CSR issues?

How do you communicate your organization’s achievements regarding CSR?



Where are you today on the maturity matrix? Where do you need to be?

Ad hoc and reactive change

Citizen intelligence

Exploring global opportunities

Exploring Business Model Innovation opportunities

Regulatory compliance

Project driven change

Citizen information transparency

Driving specific global initiatives

Experimenting with BMI

Strategic philanthropy

Change portfolio and program

Two-way Citizen interaction

Building global capabilities systematically

Implementing BMI initiatives

Values based self-regulation

Anticipating and proactive change

Citizen collaborative development

Global centers of excellence

Multiple BMI strategies

Efficiency through CSR

Change becomes the strategy

Expanding Citizen aspirations

Global enterprise innovation

Radical and pervasive BMI

CSR as growth platform

HUNGRY FORCHANGE

GLOBALLYINTEGRATED

DISRUPTIVE BY NATURE

GENUINE, NOT JUST GENEROUS

INNOVATIVE BEYONDPUBLICIMAGINATION

Building the Organization of the Future

Conclusion


For more information, please contact

IBM Institute for Business Value

• James (Jim) Cortada (WW)[email protected]

• John Reiners (AP, EMEA)[email protected]

• Lynn Reyes (US)[email protected]

• Edgar Mounib (WW, Healthcare) [email protected]

For all study materials and book orders: www.ibm.com/enterpriseofthefuture w3.ibm.com/services/gbs/ceo_study_2008.html

Public Sector (PS), Contacts- GBS, Global Government Industry

• Sietze Dijkstra, Global Industry Leader, [email protected]

- GBS, Public Sector (Americas)• Toni Yowell, PS Strategy & Change (S&C), [email protected]

• Kerri Stevens, Sr. Consultant, PS S&C, [email protected]

- GBS, Public sector (Asia Pacific)• Michael Dixon, AP PS Leader, [email protected]

• Jeffrey Rhoda, China PS Leader, [email protected]

• Steven Davidson, AP S&C Leader, [email protected]

- GBS, Public Sector (EMEA)• Geir Haugen, Nordics PS Leader, [email protected]

• Frans Bentlage, Europe SW & Benelux PS Leader, [email protected]

• Jacqui Warren UK PS S&C Leader, [email protected]

• Thorsten Gorchs, Germany PS Leader, [email protected]

For additional Government–Public Sector materials: http://www-03.ibm.com/industries/government/index.jsp

Contact Information


Acknowledgements

Public Sector Contributors• Sietze Dijkstra, Global Industry Leader

Government, GBS

- Asia Pacific• Michael Dixon, Partner, GBS AP Public

SE Executive, GBS• Jeffrey Rhoda, IBM Sales & Distribution,

Public Sector (China)

- Europe• Marie-Odile Crinon, Directeur Secteur

Public, GBS (France)• Dr. Thorsten Gorchs, Partner, Leiter

Public Industry, GBS• Geir Haugen, Public Sector Leader,

GBS, Nordics• Jacqui Warren, Strategy & Change,

Public Sector, UK

Continued…- Americas

• Bert Bleckwenn, GBS Public Sector Strategy & Operations PMO

• Jonathan Breul, Partner & Executive Director, IBM Center for The Business of Government

• Emily Craig, Service Area Manager, Organization Change Strategy

• Nicole Gardner, Vice President, Social Services

• Brenda Kunkel, GBS Federal Healthcare & Social Services

• Al Morales, General Manager, Public Sector Federal Industry Leader

• Tom Romeo, VP, Federal GBS• Dick Warrick, Associate Partner, Public

Sector Business Strategy• Toni Yowell, V.P., Practice Area Leader,

Public Sector Strategy & Change

We particularly want to thank everyone (clients and IBMers) involved in the 181 interviews with Public Sector leaders. We also extend our appreciation to the following subject matter experts who contributed to the development of this publication.

Acknowledgements

Documents

IBM Global CEO Study The Government of the Future