CEOs have endured much over the last four years. Change and disruption have been constant, from the tragedy of the COVID-19 pandemic and supply chain issues to rapid growth to looming economic uncertainty and geopolitical instability. In response, CEOs are continuously pivoting.

Continuous pivoting means we need continuous planning. One error of annual planning is that it is too long of a cycle. We are living in an extremely dynamic world. Organizations built on large, monolithic annual planning cycles are at strategic risk.

To remain agile and nimble, organizations need to forecast monthly and adjust annual plans and corresponding quarterly OKRs (objectives and key results) based on market trends, revenue data, cost data, and other key metrics. This allows you to take advantage of opportunities faster and cut your losses more effectively.

Today’s challenging economic environment requires us to sharpen our focus. This starts with evaluating cost structures and taking actions to ensure our organizations not only remain solvent, but also have capital to reinvest in strategic areas. Understanding our customers, their buying behaviors, and the impact those subtle (and not-so-subtle) changes have on our organizations is certainly critical. Embracing corporate change to achieve sustainability and drive growth is a must.

Digitization is the foundation from which these strategies, and many others, are built. A year like this one gives us an opportunity to find new ways of using technology to transform our organizations and to produce better results.

Technology takes center stage

Despite a challenging economy, CEOs are charged with driving shareholder value in the form of top-line growth and margin expansion. Technology plays a key role in achieving both. This means the technology organization can no longer remain a back-office function — it has moved to center stage for every business.

Technology is powering every major business process in the enterprise, and every company has become a technology company. As CEOs, regardless of the industry we are in, we have to become incredible stewards of understanding the role of technology and how digitization can create better consumer experiences, generate new revenue streams, and lower cost structures. Technology also is no longer just owned and run by chief information officers (CIOs); every business leader in an organization is a key stakeholder whether you are a CEO, CFO, lines of business, or board of directors.

Today, 70% to 75% of the cost structure of every technology organization is in the maintenance (or “run”) part of the budget. If your technology organization is managing a billion-dollar budget, that means $700 million dollars is spent on maintaining the technology you have. There are efficiencies to be gained, and even a small shift in this distribution (50/50 or 60/40) can lower costs and free up capital for reinvestment to “change” or “grow” the organization and invest in digital initiatives that create value.

Technology plays a role in optimizing bloated technology budgets and driving value. Those who are trying to manage this in spreadsheets will find it challenging given the complexity, role, and value of technology. It requires an AI-powered data-driven approach that includes transparency, continuous planning, business alignment, continuous optimization, and very strong leadership.

As CEO, you are leading the digital agenda within your organization. Your board is looking to you to create new digital products and experiences that affect the bottom line and ensure the teams producing those products are delivering value in line with your OKRs.

Transformation is a team effort

The CEO may be the chief transformation officer, setting the tone and pace of change in the organization, but success is a team effort. Consequently, talent acquisition and retention will remain a top priority this year and beyond.

As technology moves to the forefront, CIOs will become even more visible in many organizations, and more will be required from them for companies to succeed in the long term.

CIOs must be innovative and proactive. They must be business and technology leaders and good stewards of capital, ensuring they are managing an efficient organization by providing transparency into their spend and value around what they are delivering. To do that, they must embrace modern technologies and modern analytics platforms like Technology Business Management.

The primary role of the CIO is to deliver a roadmap for digital innovation, continuously optimize technology budgets, and be aligned with the company strategy to ensure technology investments are delivering value against those objectives. This requires partnering with the business, showing them how technology can create new digital products and customer experiences, and then building those products while measuring the effectiveness of their new development workstreams to ensure resources are aligned to the right projects and continuously delivering value.

No roadmap is complete without considering the impact of new technologies. Artificial intelligence (AI) is becoming infused in enterprise technology, permeating vendor offerings, and it will continue to evolve. AI is both a disrupter and an acceleration opportunity, and technology budgets will increase for most organizations as a result. CIOs must acquire expertise in this area. And CEOs must demand three to five pilot projects in the roadmap that focus on areas where their companies can incorporate AI to prevent disruption, and more importantly, to take advantage of the technology in their business models.

Finally, risk and compliance will remain board-level concerns. There are so many ways organizations can be compromised. Protecting company information and data structures is paramount. This will continue to be a top priority for CEOs and CIOs.

For CIOs, this is a time for earning trust. CEOs are looking for leadership. CIOs can build credibility by bringing forth innovative ideas for digital products, shifting the split of their tech budgets to free up capital to reinvest, keeping the organization safe, and demonstrating progress and value via KPIs (Key Performance Indicators).

Embracing corporate change

Uncertainty is a breeding ground for change and for opportunity. This is certainly true today. Private equity has grown in recent years, giving CEOs more options than they had in the past. CEOs are looking at both M&A (mergers and acquisitions) and divestitures to help them achieve top-line growth and improve margins.

Sustainability is another top priority for CEOs that will drive corporate change. Embracing these efforts is not only the right thing to do as a corporate citizen but also, thanks to technological innovation, a smart way to improve efficiency and productivity within our organizations.

Technology is the common thread for delivering growth and increasing efficiency. No one knows precisely what will unfold in the next 12 to 18 months, but using the time we have now to drive more digitization will help us improve business results and position our organizations to capitalize on future market opportunities.

Conclusion

Change and disruption will continue, and the economic outlook is uncertain, but by embracing digitization and continuous planning, assembling effective leadership, and embracing corporate change, CEOs can provide the transformational leadership their organizations need now, regardless of what the future may hold.