CEO Sentiment and What We’re Advising
What’s on the minds of CEOs in our industry? A host of issues that evolve over time. We poll our leaders three times a year: once formally in an annual CEO Sentiment Survey whose results we publish and through our Outsell Leadership Community meetings twice each year. Here are some key items that are rising to the fore:
- Trade, tariffs, and Brexit. The data, information and analytics economy rests on GDP, which funds budgets for our services and drives commerce around the world. When friction in the system evolves, it portends friction in our industry’s growth rates. With political uncertainty comes economic uncertainty, and with that come concerns about our industry closer to home.
- New products for the core. This is the engine that is driving growth for our industry in the coming year. Leaders are telling us that investments in NPD for their core markets are their best route to growth over the next year.
- Our key initiatives focus on enhancing the analytics capabilities in our products and services.
- Talent remains our biggest obstacle to growth, especially in data science and sales.
- Improving new business sales and improving client or revenue retention is the biggest operational driver for growth.
Overall, technology adoption is still too low in the eyes of many leaders we poll, with less than 20% reporting that AI/ML are in place in their products or services today. Only 2% have a blockchain solution, and over half we polled still don’t see blockchain use cases at all. VR/AR applications are also still in the early days. Only 30% of the CEOs we polled have a set of diversity goals in place, while 41% have no such plans. Average gross margins are in the 40% range: lower than ideal for long-term health.
The following are on our radar and key to some of our prescriptive advice:
- It is critical to have a handle on the impact of new technologies on the key workflows of customers and their use cases in our industry’s products and services in each sector served.
- The convergence of data, information, and software (aka analytics) embedded in workflows at the point of decision is where the action is, and the dominant players will own these workflows.
- Incredibly noisy ecosystems are evolving, which is why we continue to be huge proponents of using the proven Outsell Growth Framework to navigate growth.
- More companies are going private and CEO churn persists. This is a phenomenon we cited after the Great Recession that hasn’t let up under the increased ownership by private equity of so many of our industry’s firms.
- Major platforms like Google and Facebook go unregulated even while they “do evil.” Not a day seemingly goes by without some major announcement of another breach of trust. It’s time for our industry’s leaders to step up and demand change here.
- We continue to see the importance of the new “trinity”: CPO, CDO, and CTO. These executives sit equally at the table to implement our best and finest offerings, with distinct but complementary roles.
- Investing in and improving our industry’s sales talent and performance is essential.
- We must rely on innovation and partnership models to get increasingly complex jobs done.
- Organic growth remains at about 3% which is the underlying driver of so much that goes on in our industry — from M&A, to pressure on margins, to attracting the best talent. Inorganic bold moves are the way forward for those with the deep pockets and will to succeed.
- Talent, talent, talent — it’s where we must start and end our focus. If we can’t hire the best and brightest because of high-flying technology, then mission-driven purpose trumps all.
Trust is the New Algorithm. It’s time to play to our strength. Authoritative sources that were so out of vogue, so yesteryear, so non–Silicon Valley are back in style. How about that?