The globally integrated economy requires fresh thinking and innovative approaches to managing change. 

In today's globally integrated economy, CEOs are bombarded by change -- can they handle it? According to IBM's 2008 Global CEO Study [1] of 1,130 CEOs, which was conducted face-to-face in 40 countries, CEOs are battling to keep up with the pace of change.

CEOs reported a surprising level of optimism about [2]change as an opportunity to build new competitive advantage. In fact, 83 percent of surveyed CEOs expect substantial change in the future, an increase of 28 percent in just two years.

Yet, while CEOs see change ahead, their ability to effectively manage change is increasing at a far slower pace. CEOs rate their ability to manage change 22 percentage points lower than their expected need for it, a ‘change gap' that has nearly tripled since 2006.

The study reveals that CEOs were specific about where the most important change will occur - within their own customer base as two classes of customers emerged: the ‘information omnivore' and the ‘socially-minded' customer. Of all the trends in the study, CEOs plan their most substantial increases in investments to reach these new customer sets.

The study highlights how the ability to absorb and manage [3]change is driving a wedge between winners and losers in the marketplace. Those CEOs who demonstrate the capacity to manage major change can beat the competition by reaching these new classes of customers, and making bold moves to shift business design around global integration.

The "information omnivore" craves all types of information and often broadcasts its views and expectations worldwide via the Internet. These customers are swapping passive roles for much deeper involvement. Customers are also watching virtually every move companies make. CEOs agreed that customer expectations around CSR are increasing, and that CSR will play an important role in differentiating an enterprise in the future.

All of this points to an obvious conclusion. The globally integrated economy requires fresh thinking and innovative approaches to managing change.

These global findings are broadly consistent with trends in the Australian and New Zealand market place. The change gap is as strong locally as it is globally, and is a wake-up call to businesses in A/NZ. This gap highlights an urgent need for CEOs to sharpen capabilities throughout their organisations, and the pressure is on to manage change effectively.

Local CEOs revealed significant differences from the global findings in relation to the external forces that will shape their business and investment opportunities. The CEOs interviewed from Australia and New Zealand highlighted people skills as the greatest external force impacting their business in the next three years. We also found that local CEOs view corporate social responsibility as a key business opportunity, and plan on dramatically increasing their focus and investment in this area.