Imagine — Chief

Operations
Operations Officer
that think

Global C-suite Study IBM Institute for

19th edition Business Value
B

The IBM Institute for Business Value, in cooperation

with Oxford Economics, interviewed 2,116 Chief
Operations Officers. In 238 face-to-face and 1,878
phone interviews, both quantitative and qualitative
responses were collected. The analytical basis for this
COO report uses 2,000 valid responses from the total
data sample collected.

More than 12,800 CxOs, representing six C-suite roles,

20 industries and 112 countries, contributed to our
latest research. We used the IBM Watson Natural
Language Classifier to analyze their contextual
responses and ascertain overarching themes. We also
used various statistical methods, including cluster
analysis and discriminant analysis, to scrutinize the
millions of data points we collected.
 1

How today’s COOs create

connected experiences
with “thinking” operations
For years, Chief Operations Officers (COOs) have been
thinking about how agility, automation, technological
prowess and the right mix of partners could help them
innovate their global operations. Now, they are applying
artificial intelligence (AI)/cognitive technology to
establish thinking processes — processes that
communicate real-time insights to employees and
partners across expanding ecosystems. COOs are
redesigning their business models and operational
execution to create:

– Cooperation and knowledge sharing

– Adaptive and self-learning systems
– Compelling customer experiences

A cadre of forward-thinking COOs are leading the way in

virtually every aspect of such process innovation — from
vision and value creation to execution and impact.
2

Two decades after the Internet became a platform for

transformation, we’re still wondering how it all might turn

A broader context out. The signals aren’t always clear. Today, winner-take-all
organizations are on the rise, but collaborative ecosystems
are flourishing as well. Even in industries where competitive
Perspective from the concentration is increasing, innovation hasn’t — as would be
Global C-suite Study expected — flatlined. Which way to the future?

The organizations that are prospering aren’t lying in wait to time

the next inflection point —the moment when a new technology,
business model or means of production really takes off. Remaking
the enterprise, they recognize, isn’t a matter of timing but of
continuity. What’s required, now more than ever, is the fortitude
for perpetual reinvention. It’s a matter of seeking and championing
change even when the status quo happens to be working quite well.

Drawing from the responses to a survey of executives across the

C-suite, IBM client engagements and our work with academics,
the 19th edition of the IBM Global C-suite Study, “Incumbents
Strike Back,” covers four topics that describe the changing
business landscape.1
 3

Dancing with disruption: Trust in the journey:

Incumbents hit their stride The path to personalization

Is disruption dead? Certainly, there’s less of it than most C-suite Personalization is a huge opportunity to grow revenues and loyalty,
executives anticipated. Just under three in ten say they’re but absent true customer insight, too many organizations are in
experiencing significant disruption; hardly the deluge expected. danger not just of falling short of their targets, but disappointing
What happened? As industries consolidated, startups deprived of their customers. Leading organizations are modeling a new path to
venture capital funding stalled at the gate — or were snapped up by insight; they are design thinkers. They use data to interrogate their
incumbents. Confounding the situation, C-suite executives report environments, create context and reveal what’s deeply human
that it’s not the fearsome digital giants they’re concerned about about their customers. To achieve the elegant and irresistible
most, but the once lumbering, now innovative, industry incumbents design of the customer experience, they don’t start with solutions;
that have gained the capacity to strike first and strike back. instead, they seek to ask the next best question.

Disruption hasn’t gone underground; instead it’s emerging as a They excel at two activities — customer co-creation and detailed
capability incumbents are ready to embrace. They orchestrate journey mapping. These activities generate insights in abundance,
advantage by continuously reallocating resources to invest in feed on-target personalization and have equally important second-
promising new areas. They have learned to move fast, experiment order effects: they propagate trust. Trust between peers in
and iterate. They’re reinventing themselves before they are forced co-creation communities is transferred to the enterprise and
by competitors to reconsider their options. extended outside the community by a cadre of influencers.
Likewise, journey maps cement trust by instilling a culture of
accountability to customers inside the organization. Leading
organizations dedicated to discovering their customers’ unmet
needs don’t just ask for loyalty on the basis of personalization.
They earn and provide reasons to trust.
4

Orchestrating the future: Innovation in motion:

The pull of platforms Agility for the enterprise

Who wouldn’t want to be an Amazon or Alibaba? An intrepid few Asked to rank the capabilities most instrumental to their success,
in every industry are venturing onto business platforms, creating CEOs cited two characteristics above all others: a new willingness
dazzling network effects by orchestrating direct interactions to experiment and the support of empowered employees. Leading
between consumers and producers, and pulling others fast in organizations are rethinking the employee construct at its most
the same direction. Organizations will need to consider whether elemental level: they’re cultivating autonomy and learning on
they reinvent themselves to own or participate in a business the fly by implementing a more fluid work structure made up of
model platform, or to do both. Regardless, the “rules” for cross-functional teams. For many, the initial inspiration to do so is
success are shifting. to get closer — and become more responsive — to their customers.

Platforms break down conventions. Prime among those Leaders in these organizations look to employees to actively
conventions is the value derived from proprietary advantage. challenge and reshape their own views on the course the
Platform operators create value from reciprocity — they cultivate company should take next. They make it clear that they value
win-win propositions for the network of organizations on their smart experimentation and rapid response to market changes.
platforms. Above all else, platform owners are ready to reallocate Their employees aren’t lined up neatly behind them; they’re
resources from defending markets to innovating in new ones. encouraged to explore.
Attracted by the potential for outsized returns, 28 percent of
the C-suite executives surveyed report their enterprises are As part of the Global C-suite Study, we interviewed over 2,100
reallocating some portion of capital to build out platforms. COOs to better understand how the COO function is evolving. In
Past and future reallocation could approach an estimated this report, we outline how COOs are innovating in response to
USD 1.2 trillion in the next few years. the challenging and changing landscape outlined in the Global
C-suite Study.
 5

“We did something very innovative

Connected experiences that is quite disruptive in our
industry. We transformed our
operations to be fully digital
across all of our channels.”
Chief Operations Officer, Telecommunications, Ireland

The sudden shock of disruption? That’s in the past. Instead of

feeling caught off balance by the ground shifting beneath them,
organizations have embraced a mindset of continuous reinvention.
Industry incumbents, once mired in legacy thinking, have learned
from the march of the digital giants. The result? They’re innovating
in new ways.

Members of the C-suite have broadened their focus from just

products to the totality of the customer experience. They’re
expanding partner networks, creating value from collaboration
across ecosystems and reallocating resources to create new
business models. In fact, launching a new business model has
become a top prerequisite — 2.4 times more so than in the past
few years (see Figure 1).
6

Figure 1 Breakaway Another IBM report has found that digital customer experiences
are more critical than ever to the success of a company, because
More organizations expect to businesses are interacting with their customers in many different
launch new business models ways. By using data from self-learning software and automated
processes, companies can create “connected experiences”
that build meaningful customer relationships across a variety
of channels.2
Past and future planned enterprise business model changes
In the recent past, organizations have pursued change primarily
by launching existing products and services in new markets. Now
Past 2 to 3 years Next 2 to 3 years they’re seeking a balance between new and existing markets.
They have also learned that growth can come from redirecting
16% 38% investments and resources to reinvent the customer experience.
Launching a new business 2.4x more
model within our industry For operations executives, the mandate to improve the customer
experience may not seem new. But exactly how they achieve those
improvements and how their operations change as a consequence
49% 48%
will be new. For leading organizations, different sources of data
Modifying elements of our no change and innovative technologies are playing an outsize role in their
existing business model operation makeovers. Organizations are returning to their industry
roots as they aggressively launch new business models.
30% 21%
Moving upstream or downstream 0.7x less
within the value chain

23% 14%
Purchasing an existing business 0.6x less
to acquire its business model

Q. How has/does your enterprise plan to change its business model in the past 2 to 3
years and within the next 2 to 3 years?
 7

Water Mission, a nonprofit organization that specializes in Figure 2 Good to go

environmental engineering solutions, is a great example of these
new business models. The organization’s mission is to help COO Reinventors Reinventors’ success suggests
communities in developing nations, including many in sub-Saharan Practitioners a bright future
Africa, obtain access to clean, safe water. But Water Mission has Aspirationals
learned to do more. It is empowering those communities to
manage and maintain their own water supplies, as well as the
supporting infrastructure. Water Mission uses remote monitoring
technology with their pumps, wells and equipment in order to
generate real-time data about conditions and usage, which the
organization analyzes to perform predictive maintenance and
maintain safe water supplies.

To better understand the forces at play today, we applied cluster

analysis to identify distinct segments of organizations among 81%
more than 12,500 participants in the Global C-suite Study. Three
71%
archetypes emerged, which we’ve named the Reinventors, the 67%
Practitioners and the Aspirationals. The organizations clustered
in these archetypes are at different stages of Digital Reinvention™
51%
and are eyeing opportunities from their respective vantage points. 45% 45%
38% 36%
The Reinventors, 32 percent of all COOs surveyed, are the 35%
standouts. They report that they outperform their peers in both
revenue growth and profitability or operating efficiency as well
as in innovation (see Figure 2). They optimize their business

High revenue High Leading

growth profitability innovator

Q. How does the revenue growth, profitability and market perception of your enterprise’s
innovation capability compare to that of your peers over the past 3 years?
8

processes to support changing strategic objectives. Reinventors

express confidence in their abilities to reshape their operations. “In order to meet demands
They have well-defined strategies to manage disruption.
of next-generation
Practitioners — 36 percent of COOs — haven’t yet developed the
capabilities to match their ambitions. And they are ambitious. Both
consumers, we have
Practitioners and Reinventors are building one of the most radical
business model options — the business model platform.
completely embraced
The Aspirationals, as their name implies, have some ways to go in
digital transformation.”
their digital reinvention and their ability to seize opportunities.
They make up 32 percent of the COOs surveyed.

In this report, we focus primarily on the Reinventors and the ways

they are innovating their operational processes.

Chief Operations Officer,

Insurance, China
 9

“Our growing network of partners,

Uncover to discover followed by adoption of advanced
AI technologies, provides an
exceptional experience to our
customers, which is positive for
our brand value in the market.”
COO, Financial Services, United States

Reinventors are design thinkers, adept at exploring and investigating

before settling on possible answers. In essence, they compete
through discovery — most typically to uncover unmet customer
needs. Design thinkers reimagine how business processes could
support new customer experiences that fulfill those needs. Most
COOs solve for optimization and alignment challenges across supply
chains and ecosystems. Design thinkers reconfigure connections
among participants in those supply chains and ecosystems to
create value.
 10

As design thinkers, Reinventor COOs seek to understand their

customers’ needs and wants to design personalized experiences
(see sidebar on page 11, “Reinventors are design thinkers”). They Figure 3 Learning loop
stand in their customers’ shoes by embracing customer co-creation
with detailed customer journey maps — and consequently create COO Reinventors Reinventors seek to understand
Practitioners relevant aspects of their
irresistible experiences. Seven in ten Reinventor COOs report customers’ lives and needs
they’re very effective at collaborating with their customers to Aspirationals
create products or services. Indeed, co-creation isn’t a one-time
occurrence or something that only happens during product and
service design (see Figure 3). Co-create on product
and service design
Integrate customer 70%
“We moved to data interpretation feedback
46%

and prediction across the full 35%

value chain, focusing on the

customer experience.”
Chief Operations Officer, Life Sciences, Switzerland 48
%
% 71
35 %
% 87
48 %
73%

Offer outstanding
post-sale services

Q. To what extent does your enterprise collaborate with and integrate customer
feedback in product and service design? How effective is your enterprise at creating
compelling customer experiences through post-sale services?
 11

With all eyes focused on the customer, Reinventor COOs look to Reinventors are design thinkers and excel at
AI/cognitive technologies for insights and impact (see Figure 4). For
customer co-creation. They frequently:
COOs, this means they leverage AI/cognitive technologies not just to
better understand customers (gaining insights) but also to redesign
important aspects of their operations (creating impact). This can Create close connections to customers
affect innumerable activities, from customer interactions such as to garner direct feedback
delivery to production that yields the right price point.
Analyze data and conduct detailed
journey mapping to develop
customer empathy

Figure 4 Get smart Turn to their partners to better

understand the customer experience
Reinventors turn to AI/cognitive
COO Reinventors technology to improve the
Practitioners customer experience Use AI technologies and cognitive
Aspirationals
solutions to reveal patterns that might
50% otherwise go undetected.
38%

27%
24% 21%

10%

Today In 2 to 3 years

Q. Indicate the impact of AI/cognitive technologies on your customer experience to date

and in the next 2-3 years. (Significant impact is 4/5 on 5-point scale.)
12

U.S.-based Baldor Electric Company, for example, designs and

manufactures industrial electric motors, drives and mechanical
power transmission products. Baldor knows that manufacturing Figure 5 Quick fix
downtime is costly — and the rapid manufacturing and delivery of its
custom motors is key to customer service. The company applied an COO Reinventors Reinventors rewire operations
AI-based analytics accelerator to publish real-time order information to move fast
Practitioners
along its production line. Integrating and analyzing sales, finance, Aspirationals
production and device data, Baldor is able to optimize its processes
from manufacturing to delivery. Use real-time information to
optimize processes/networks
COO support for better customer experiences extends well
beyond product and service design and even standard process
optimization. It also includes speed and responsiveness across
61%
their operations. Six in ten Reinventor COOs are already accessing
45%
real-time information to optimize their processes and networks for
quick actions and outcomes (see Figure 5). 40%

Q. To what extent does your business strategy apply real-time information to

optimize processes/networks?
 13

As systems thinkers, COOs are skilled at making sense of Business model platforms, in which multiple organizations and
their operational environments. Reinventor COOs excel at customer segments directly interact, are attractive in part because
orchestrating innovative Internet of Things (IoT) connections. of the considerable payoff. Organizations that own and operate
As sensors stream data from manufacturing equipment, shipping a platform typically receive high valuations for their businesses,
containers, networked buildings and more, real breakthroughs and and dominate their industries or category segments. Already,
entirely new ways of working (man and machine) become possible. 26 percent of COOs report that their organizations are
Among the Reinventors, 71 percent have a clear vision and plan for implementing a business model platform. Forty-four
the interconnectivity of the IoT. Just 54 percent of Practitioners percent are investing in or considering one.
and 45 percent of Aspirationals do.
For operations executives, business model platforms pose
A European-based organization, one of the world’s leading industrial new challenges as well as opportunities. To create a seamless
suppliers, is accelerating its digital transformation using cognitive customer experience, for example, organizations on a platform need
computing and the IoT. Among other activities, it is building virtual to stay in sync with each other. Platform owners are encouraged
models that represent highly complex industrial systems. This can to collect and circulate data freely so that member organizations
enable different approaches to product design, manufacturing and can collaborate to create mutual value. On business platforms,
after-sales service. The organization’s cognitive platforms can use connecting and creating insights for breakthrough innovation and
data from millions of sensors. This helps employees understand continuous learning becomes an everyday endeavor.
equipment performance in real time, monitor machines on- and
off-site, and offer preventative maintenance and optimization
services to their customers.

As the IoT opens up opportunities for insight, new business model

platforms such as Amazon and Alibaba promise to fundamentally
change the customer experience. In both cases, design and systems
thinking grow in importance.
14

“The combination of AI and

Processes that “think” the IoT will improve real-time
decision making and create new
and innovative experiences.”
COO, Energy and Utilities, Indonesia

As more organizations collaborate across an ecosystem or

business platform, the challenge of optimizing operations is
exacerbated by the need for these organizations to seamlessly
align their processes. This complex orchestration ups the ante.
Businesses need to see around corners and through blind spots,
gathering in-the-moment insights for rapid learning and new value.

Reinventor COOs recognize the importance of AI/cognitive

computing to automate and orchestrate new services and
integrated processes. In fact, 58 percent report that their
implementations of predictive analytics have delivered a higher
level of ROI than other technologies. And 46 percent report the
same results with AI/cognitive technologies. Moreover, when
we asked COOs specific questions about AI/IoT, 60 percent
of Reinventor COOs report that the integration of AI with IoT
technologies in their organizations can make a substantial
contribution to their digital reinvention over the next several
years (see Figure 6).
 15

In addition to the IoT, emerging technologies such as blockchain are

creating fresh data streams for analysis by savvy COOs. Logistics, for
Figure 6 Entwined example, has long remained dependent on a flood of paper that is
seldom digitized or electronically shared due to authenticity concerns.
COO Reinventors Reinventors know that One small error on paper can — and too frequently does — result in
the combination of AI/
Practitioners delays that spoil a shipment or hold up payments. Across the supply
cognitive and the IoT can
Aspirationals contribute significantly to chain, blockchains, which establish trust in the authenticity of data,
digital transformation are creating resources for visibility, forecasting and optimization.

Blockchain’s ability to manage transactions — without requiring a

central point of control — may be the new foundational paradigm shift
60% in business model reinvention. It can increase trust, accountability and
transparency across extended business networks for operational and
31% financial transactions. In our research, COOs report that blockchain
22% will support their enterprise strategy by providing security,
transparency and automation. Many are piloting blockchain
capabilities in various market sectors and specific business functions.
They are identifying new and potential opportunities to transact
securely and efficiently with their expanding ecosystem of partners,
suppliers, manufacturers, lenders and more. And when ready to
commercially scale, almost 80 percent revealed that they are focused
on the core of their network —  their customers.

Q. To what extent will AI/cognitive computing and IoT technologies contribute to the
digital transformation of your enterprise in the next 2 to 3 years? (Significant impact is
4/5 on 5-point scale.)
16

Many organizations begin their AI journeys by applying For example, an agricultural startup in California helps growers
intelligence and advanced automation capabilities to improve reduce water consumption and energy usage while increasing
their understanding of customer needs — and create more its farm production yields. The company implemented a cloud-
compelling customer experiences. Nearly half of Reinventor based, decision-optimization solution that employs IoT and
COOs apply AI more broadly (see Figure 7). They use AI to cognitive language processing technologies. Sensors placed
enhance decision making overall, drive new business models and in the soil provide data on current conditions. This data is
revenue streams, and enable a new classification of IoT-driven supplemented by unstructured and semi-structured inform-
products and services based upon reasoning and learning. ation extracted from agriculture documents and reports, as
well as live weather data feeds. As a result, the startup, using
a chatbot to conduct personalized question-and-answer
dialogue, can provide farmers with tailored farm conditions
and predictive recommendations.

Figure 7 New classes of IoT products Enhanced decision making New services, business models
and services that sense, reason in the organization and and revenue streams
and learn with customers
Exponential effect
47% 47% 47%
Reinventors use AI for
24% 26% 31%
broad transformation
27% 22% 26%
COO Reinventors
Practitioners
Aspirationals

Q. To what extent do you agree that combining AI/cognitive computing and IoT technologies in the scenarios listed above relate to your business?
 17

Predictive analytics has allowed organizations to forecast and Demand management/forecasting:

operate more flexibly in real time. With AI/cognitive systems
Cognitive + cloud
connected to the IoT and cloud, they can now automate and
autonomize for the unexpected. COOs anticipate creating cognitive
A perfume and cosmetics company in Brazil has increased demand
processes across their operations. However, they see the greatest
forecast accuracy by 20 percent and enhanced operational agility
benefit in three core areas: risk management (56 percent), demand
by enabling real-time “thinking” insights into customer demand.
management and forecasting (43 percent), and inventory and
Accurate demand forecasting is vital to planning production and
network optimization (39 percent), as we explore in the use
marketing campaigns months in advance. But predicting the
cases below.
demand for a new product that has not yet been released and
has no sales history is even more difficult. The company built
Risk management: predictive models that analyze extensive marketing, sales,
Cognitive + cloud + machine learning production and macroeconomic data. Aligning demand from
end-customers and franchisees with greater precision, the solution
A large energy company in Russia wanted to reduce uncertainty reduces stock-out situations, which results in higher sales and
in the exploration and development of oil and gas fields. These lower costs.
activities are not only risky but also enormously expensive and
capital intensive. Understanding risks posed by an extended Inventory and network optimization:
network of suppliers that provide the infrastructure, monitoring
Cognitive + cloud
systems and services is critical. The company determined that
about 80 percent of the data related to assessing this risk was
A UK-based retailer of electronics and automation components
already on the Internet, but it was unstructured. It used an AI risk
relied heavily on forecasting and planning to meet future product
assessment solution to plumb this mountain of data. The company
demand. These plans needed to be communicated immediately to
incorporated advanced machine learning algorithms to assess risk
suppliers to ensure proper inventory levels. But communications
and flag problematic suppliers, including those who might be
were often slow and disjointed. The retailer solved this challenge
unable to fulfill their on-time and quality commitments. It then
by implementing an advanced analytical communications and
provided analysts with recommended actions.
data-sharing cloud-based platform. Today, they manage supply
chain connections in real time and optimize inventory — while
consequently improving the customer experience.
18

“We have optimized our internal

Motivate to innovate processes and systems to offer
real-time support to our
employees. We can now track our
customer queries in real time and
resolve them quickly. This leads
to a better customer experience.”
Chief Operations Officer, Energy and Utilities, United States

Reinventor COOs clearly understand where their industries are

headed and can inspire their teams to get there (see Figure 8).
They have the tools and techniques, experiences and organizational
culture to navigate shifting tides. Seventy-three percent of the
Reinventor COOs report that their organizations have been very
successful at managing change in the past and can respond to
emerging business trends in the same way.

COO Reinventors lead from a position of trust. They actively solicit

ideas from their employees and empower their teams to take
action. They cultivate autonomy and continuous learning by
creating cross-functional teams empowered to respond
proactively — with minimal management oversight — to customer
needs and new opportunities. Seventy-three percent report having
a fluid work structure based on teams that span functions.
 19

A ship management company in Norway needed to collect

considerable data on transport conditions to better investigate
Figure 8 incidents. Employees on land and at sea needed to work together
Shared vision
efficiently for the safe passage of both vessels and cargo.
COO Reinventors Employees at sea work in demanding and often inhospitable
Reinventor COOs understand
Practitioners where their industries environments, with safety a top priority. The company developed a
Aspirationals are headed
collaboration platform with advanced analytics, empowering its
employees around the world to share and react to real-time data,
ideally before an incident occurs.
Leadership has a strong understanding of where our industry is heading
As organizations liberate their employees to share in decision
making, they still need to upgrade their workforce skills and
48% 65% 85% approaches to talent acquisition. Many COOs are actively training
employees in new digital and emerging technologies, while others
We actively solicit input from employees to develop new ideas focus on recruiting the needed talent (see Figure 9). In general,
Reinventor COOs focused slightly more than their peers on training
versus hiring to acquire skills.
45% 56% 78%

Our teams are empowered to decide on the best course of action

37% 48% 77%

We promote and support collaboration and knowledge sharing

among employees

36% 51% 75%

Q. To what extent do you agree that your leadership has a strong understanding of
where your industry is heading? (To a large extent is 4 or 5 on a 5-point scale.)
Q. To what extent do you agree that your leadership solicits employee input to develop
new ideas, promote transparency and empower employees?
20

Figure 9 Up to date Organizations are pursuing many creative ways to address the
digital skills gap in both the short and long term, including new
Changes in the 2 to 3 university, technical and vocational programs — as well as
years to embrace digital apprenticeships and certifications.
environments
Many organizations are considering a “new collar” approach —
filling technical jobs with workers who do not have a traditional
college degree but do have the technical training, skills and
Train employees in emerging technologies
aptitudes for many of today’s hard-to-fill jobs. One example is
44%
Pathways in Technology Early College High Schools (P-TECH) that
Hire talent equipped with digital skills offer a seamless pathway from high school to college completion
41% and career readiness within six years.3
Provide employees with collaboration tools to foster innovation
37% PNC Bank and IBM partnered to expand new collar technical career
training opportunities. The program, Corporate America Supports
Reorganize functions and/or teams You, is designed to build in-demand technology skills to prepare
36% veterans for new collar careers in the United States.4 These include
Establish more flexible work arrangements/schedules skilled positions such as data and cybersecurity analysts.
35%
Provide mobile devices to increase employee efficiency
29%
Develop new or alternative career paths
19%
Deploy bots or robots to perform routine tasks
16%
Access crowdsourcing platforms to acquire talent
14%

Q. As a result of the changing digital environment, which of the actions listed above is
your enterprise most likely to implement within the next 2 to 3 years?
21 21

“We started to hire people In a recent IBM Institute for Business Value study, “The human-
machine interchange,” 70 percent of operational executives

with digital skills who can reported that digitization and intelligent machines lead to higher
value work.5 Sixty-one percent said that intelligent machines will

accept any kind of create meaningful impact on changing job descriptions and
activities in the next three years.6

challenge and respond/ COOs agree. When asked how AI/cognitive computing will help
support positively.” their enterprises compete in the next several years, 43 percent
reported that they expect it to significantly enhance workforce
capabilities and productivity. Because AI/cognitive systems don’t
just provide answers but also the reasoning and evidence behind
the answers, they have the potential to elevate employee expertise
and the actual value of their work. Paradoxically, it seems, AI/
cognitive has the potential to liberate employees from being mere
cogs in the machine.

Chief Operations Officer

IT and Professional Services, UK
22

Uncover to discover

How to create thinking Design thinkers collaborate with their customers, business
partners and service providers across the lifecycle of their
operations: Act now product/service portfolios.

– Uncover ways to apply intelligence to operational functions and

activities to power real-time insights that are suitable for action.
– Broaden your ecosystem of partners and customers. Leverage
your ecosystem to achieve competitive differentiation by sharing
assets, skills, data and information. Communicate regularly.
– Use design thinking to collaborate with customers and build
capabilities across the entire product/service lifecycle. Analyze
customer data and conduct detailed journey mapping to explore
the customer experience.

How do you plan to collect, connect and consume real-time signals

and information for operational agility and flexibility?

Train processes to think

The infusion of AI into the IoT enables a new class of products and
services with the ability to reason.

– Use predictive analytics and AI to optimize operational processes.

Infuse intelligence into decision making from product/service
conception through design and development. Implement using
global standards and fine-tune to market specifications.
 23

– Enable a new class of IoT-driven products and processes that

can reason and learn with the support of AI. Use AI technologies “AI/cognitive computing
and cognitive solutions to reveal patterns that people might
otherwise not see or predict.
will help us to reinvent
– Instill customer loyalty while creating agile operations with our business by providing
learning processes. Use data interpretation and prediction
across the entire value chain, remaining customer-focused. effective knowledge about
To what extent will you individualize the customer experience with
optimized processes and networks?
the needs of our customers
with intelligent processes to
Motivate to innovate
execute on those needs.”
Reinventor COOs empower their teams to think, act and share.

– Train employees to embrace emerging technologies and work

with intelligent processes. Consider a “new collar” approach
that addresses the digital skills gap with technical and
vocational programs.
– Create high-value work environments. Empower your teams to
decide on the best course of action. Equip them with automated
human-to-device and device-to-human understanding.
Encourage and reward collaboration and skills sharing.
– Actively solicit input from employees to develop ideas and
innovate products, services and processes. Rapidly prototype Chief Operations Officer
approaches to enable testing and refinement before full Telecommunications, Brazil
adoption and scaling.

How will you enhance the digital competency of your operations to

bring higher value work to your employees?
24 24

Notes and sources Related IBM IBV C-suite Program executive reports

1 “Incumbents Strike Back: Insights from the Global C-suite Study.” IBM To read the full report, “Incumbents Strike Back,” please go to
Institute for Business Value. February 2018. http://www.ibm.com/ ibm.com/globalcsuitestudy. You can also find copies of our
globalcsuitestudy monthly insights and four related C-suite executive reports on IoT,
artificial intelligence, blockchain and the experience revolution at
2 Opher, Albert (Al), Padma Krishnan, Michael Del Casino, Mary Nguyen,
the same location.
Brendan Cooper. “Ushering in the era of connected experiences.” IBM.
December 2017. https://public.dhe.ibm.com/common/ssi/ecm/20/ Related IBM publications
en/20012520usen/global-business-services-white-paper-external-
20012520usen-20180115.pdf Opher, Albert (Al), Padma Krishnan, Michael Del Casino, Mary
Nguyen, Brendan Cooper. “Ushering in the era of connected
3 Crozier, Jennifer Ryan, Rashid Davis and David Levinson. “Addressing
experiences.” IBM. December 2017. https://public.dhe.ibm.com/
the skills challenge with P-TECH schools.” IBM Institute for Business
common/ssi/ecm/20/en/20012520usen/global-business-
Value. February 2018. https://www-935.ibm.com/services/us/gbs/
services-white-paper-external-20012520usen-20180115.pdf
thoughtleadership/ptechschools/

4 “Corporate America Supports You.” Citizen IBM Blog. https://www.ibm. Opher, Albert, Mark Peterson, Hila Mehr. “Disruptive Competencies
com/blogs/citizen-ibm/tag/corporate-america-supports-you/ for a Cognitive IoT World.” IBM. March 2017. https://www-01.ibm.
com/common/ssi/cgi-bin/ssialias?htmlfid=GBJ03079USEN
5 Butner, Karen, Dave Lubowe and Grace Ho. “The human-machine
interchange: How intelligent automation is reconstructing business
operations.” IBM Institute for Business Value. October 2017. https://
www-935.ibm.com/services/us/gbs/thoughtleadership/
humanmachine/

6 Ibid.
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