Four CXOs on “The Road Ahead”
Sierra Ventures hosted our quarterly CXO Advisory Board call on June 11th to discuss the impact of the current environment and the road ahead. Our four panelists - P&G CTO, HPE CIO, Medidata CTO / CIO, PwC Head of Digital & Data - represented a wide cross-section of industries including CPG, Healthcare, Technology, and Financial Services. We also had over 20 CXOs from the F2000 including Morgan Stanley, Alexion Pharmaceuticals, USAA, Tata Consultancy, Celgene, etc. as well as a dozen of our portfolio CEOs.
CXO Concerns have changed meaningfully in three months
Three months into the crisis here in the US, many of our CXOs have first reacted, then stabilized, and are now planning ahead. Companies moved quickly to cut costs and jobs to initially weather the pandemic. The federal government’s CARES Act and Main Street Lending Program enabled a partial recovery for some enterprises. With economies reopening and consumer sentiment starting to improve, they now have to focus on rebuilding the top line in an uncertain environment. [caption id="attachment_12992" align="aligncenter" width="1024"]
Source: PwC CFO Pulse Survey[/caption]
While the impact is just beginning to flow through the system and there’s still a lot of uncertainty, we had some interesting takeaways from the conversation.
- CXOs have not yet seen the full effect of the slowdown on their budgets. The panelists agreed with the PwC CFO survey (June 2020) that over 40% of global CIOs surveyed have IT cost reduction on their agenda, with targets to cut costs by up to 30-40%.
- The new ‘normal’ requires substantial investments in digital tools and capabilities. CFOs are more likely to cut general capex investments than digital, R&D or cybersecurity. Digitization has very quickly moved from innovation labs to production.
- The work environment has forever changed. Whether it’s the trend towards remote workers, the reduced need for permanent office space or corporate travel, or the increased requirement for collaboration tools, the thinking of CXOs has had to rapidly evolve.
- Every industry will experience rapid disruption with automation and digitization being common threads. For example, healthcare will see more digital therapies and personalized medicine, while technology and CPG companies have to rethink their supply chains.
- And finally, the panel advised startups to focus more on the economic value proposition of their offerings because there will be greater scrutiny than ever before. There seems to be a high degree of interest in Supply Chain Modernization, Intelligent Automation, and Hyperpersonalization.
We will be expanding on each of these areas in our subsequent blog posts. Stay tuned!