TCS 2021 Global Leadership Study: Key Findings Report

Summer 2021
TCS 2021 Global Leadership Study
Key Findings Report
TCS Thought Leadership Institute
Where, How and What Leaders Will Compete With
in the New Decade

2
New products
and services
New business
processes to create
demand and supply
New approaches to
managing talent and
creating a new culture
New sectors, regions,
business models
This 2021 study from Tata Consultancy Services (TCS) examines how leaders of large global enterprises have recalibrated their
organizational strategies for the next few years, through 2025. Specifically, the study explores how senior business leaders are striking a
balance between innovation and optimization in four arenas.
TCS 2021 Global Leadership Study: Overview
Digital strategies – deciding which
businesses and markets to be in
WHERE TO COMPETE
WHAT TO COMPETE WITH
Digital offerings – defining the products
and services to offer
HOW TO LEAD
Leadership approaches to managing people who
are working in increasingly digital ways
Digital ways of conducting business
HOW TO COMPETE
INNOVATION OPTIMIZATION
vs
Improving existing
products and services
Existing sectors, regions, business
models
Improving existing ways
of creating demand and
supply
Improving existing talent
management approaches
and the current culture

3
In a more digital decade, what is
more important: innovation or
optimization?
Question:
The Big Takeaway
Even with the massive digital opportunities senior leaders anticipate, most are significantly
underestimating the amount of innovation they will need to compete tomorrow.
Essential takeaways at a glance
Senior leaders predict that
continued growth and profitability
will likely come from new
collaborators (even
competitors), new digital
offerings, and new industries and
ecosystems
1
Senior leaders predict
innovation and a customer &
employee centricity need to
drive their culture more than
shareholder value
In an increasingly digital business
environment, senior leaders
predict many areas of the
organization will be subject to
cyberattacks
Senior leaders predict that
optimization will be more
important than innovation
for organizational growth and
profitability between now and
2025
2
3
4
TCS 2021 Global Leadership Study

4
Overall, senior leaders believe that
Continued growth and profitability will likely come from new collaborators
(even competitors), new digital offerings and new industries & ecosystems
Why this matters
Companies project a big increase in revenue from digital products and services; greater digital marketing, sales and service processes; and entry into digital ecosystems
that cross industries. The ability to participate with competitors and partners in cross-industry digital ecosystems with new, more highly digital products and services
will be essential to seize new, revenue-driving opportunities in the mid-2020s.
of their revenue will come from industries or
ecosystems outside of where they currently operate
45%
Senior leaders recognize that digital business is rapidly expanding into what
will be new industries or ecosystems for their business.
1
All respondents

5
Why this matters
Innovation, customers and an employee-centric approach will be a higher
priority to organizational culture than shareholder value
Why this matters
These findings underscore the Amazon effect: customer-centricity and innovation reign supreme in an increasingly digital economy. These two traits—along with
employee experience, diversity, quality and sustainability—are expected to influence company culture more than shareholder value.
Innovation ranked
Overall, senior leaders ranked innovation, customer centricity and employee experience higher as
cultural priorities than shareholder value.
#1across all 1,200+ senior leader respondents
2
Innovation
Diversity, inclusion, equal opportunity
Quality driven
Customer centricity
Sustainability
Learning, upskilling, reskilling
Shareholder value
Transparency
Purpose driven
Risk tolerant
Employee experience
Ranking
11
10
9
8
7
6
5
4
3
2
1
All respondents

6
Why this matters
These findings underscore the Amazon effect: customer-centricity and innovation reign supreme in a digital economy. These two traits—along with
The customer ranks
#1in the areas where senior leaders say their
companies need to more effectively use data
When asked where they need to more effectively use data, senior leaders ranked 4 customer-related
processes the highest of 8 areas. Overall, they believe they must get much better at using data about
customers to create demand, provide better support, improve the customer experience and products and
services.
Ranking:
Digital
marketing
campaigns
Sales
initiatives
Customer
service
Products
used by
customers
Distribution
operations Suppliers Employee
performance
Manufacturing
operations
1 2 3 4 5 6 7 8
Innovation, customers and an employee-centric approach will be a higher
2
cont’d
All respondents

7
In an increasingly digital business environment, between now and 2025
many areas of the organization are viewed as likely to experience
cyberattacks
Why this matters
Pursuing digital business opportunities comes with risk. As companies’ products, services and processes for creating demand and supply become increasingly digital,
their exposure to cyberattacks widens significantly. The findings suggest that organizations need to ensure their systems are secure across all business units and
disciplines, especially their customer, finance and intellectual property data.
by senior leaders as the area
predicted to have the greatest
number of cyberattacks
between now and
2025*
#1
Senior leaders rated ranked finance, followed by customer databases and R&D, as the top areas
predicted to have the highest number of cyberattacks between now and 2025.
Financewas ranked
* Survey question excluded IT dept. as a possible answer
Ranking:
3
2
1 Finance
Customer databases
Research & development
Legal
Sales/e-commerce
Marketing
Distribution/supply chain
Human resources
Ecosystem partners
Manufacturing/production
All
respondents
3
4
5
6
7
8
9
10
All respondents

8
42%
58%
58%of senior leaders on average predict that optimization of their current business
model and offerings will be more important for organizational success than
innovation*
Why this matters
Senior leaders believe they will be focused on optimizing their current business, but overall study findings indicate that innovation will be a major factor in
determining their organization’s success in the mid-2020s. This suggests that despite predicting far greater digitization of their businesses and the marketplaces in
which they will compete by 2025, most companies are significantly underestimating how much innovation they will need by then.
When asked which will be more important between now and 2025 in their strategy, products and
services, demand- and supply-generation processes, and culture and talent management approaches,
most senior leaders chose “optimization” across each arena.
* An average of all respondents across all 4 arenas
4 Optimization ranks as more important than innovation for organizational
growth and profitability between now and 2025
vs
Innovation
Optimization
All respondents

9 TCS Internal
The study asks: What are “Leaders” doing differently from "Followers"?
“Leaders” are firms with higher-
than-average increases in revenue
and net profit in their industry
between 2015 – 2019.
+65%
net profit
These companies are
+73%
of the total survey sample.
In this study, we compared the best-performing companies ("Leaders") in the last half of the 2010s to the worst-performing firms
("Followers"). "Leaders" see their digital opportunities between now and 2025 much differently than do "Followers."
“Followers” are firms with lower-
than-average increases in revenue
and net profit in their industry
between 2015 – 2019.
-15% -36%
These companies are
33% of the total survey sample.
29%
VS
Innovation
Optimization
vs
Leaders Followers
revenue
and
revenue net profit
and

10
56% 42%
Leaders
vs
Followers
revenue revenue
58% 34%
Leaders Followers
vs
80% 23%
Leaders Followers
vs
55% 35%
Leaders Followers
vs
Why this matters
Companies project a big increase in revenue from digital products and services; greater digital marketing, sales and service processes; and entry into digital
ecosystems that cross industries. The ability to participate with competitors and partners in cross-industry digital ecosystems with new, more highly digital products
and services will be essential to seize new, revenue-driving opportunities in the mid-2020s.
Clearly, most “Leaders” realize they must collaborate extensively with competitors to be key players in
digital ecosystems. Lower performers still regard competitors as enemies to avoid. “Leaders” also
anticipate that more of their revenue will come from purely digital offerings compared to “Followers.”
Leaders
1 Continued growth and profitability will come from new collaborators (even
competitors), new digital offerings and new industries & ecosystems
of “Leaders” are more
willing to collaborate
with competitors
80%
of “Leaders” plan to
expand these kinds
of collaborative
relationships
55%
of “Leaders” include
ecosystems when
building their future
strategy
58%
of revenue (on avg)
will come from purely
digital offerings according
to all “Leaders”
56%

11
Why this matters
These findings underscore the Amazon effect: customer-centricity and innovation reign supreme in a digital economy. These two traits—along with employee
experience, diversity, quality and sustainability—are expected to influence company culture more than shareholder value.
Overall, “Leaders” ranked customer-centricity #1 as a cultural priority, above shareholder value, while
Followers ranked it #6. This finding suggests that higher-performing companies embed a “customer
first” mindset across the organization.
2 Innovation, customers and an employee-centric approach will be a higher
Leaders
#1
“Leaders” rank customer-centricity as their most important cultural trait
Innovation Diversity,
inclusion and
equal
opportunity
Quality
driven
Customer
centricity
Environmental
sustainability
Learning,
upskilling
and reskilling
Employee
experience
Shareholder
value and
financial
performance
Transparency Purpose
driven
Risk
tolerant
LEADERS
FOLLOWERS
#1
#6

12
Why this matters
“Leaders” believe that digitally empowering employees will be more impactful to the organization,
including over automation of real-time analysis of the company’s financial condition.
Highly personalized sales and marketing campaigns
Improving employee satisfaction, productivity and team collaboration
Personalized, automated and higher value customer experiences
Mass customization of products and services
R&D simulations that prove the feasibility of product concepts and engineering designs
Sophisticated, automated post-sales support and troubleshooting
Real-time automated analysis of the company’s financial condition
Highly trackable and traceable distribution
Production/manufacturing operations that can switch rapidly from global to local supply
Manufacturing that can be shifted to customers’ premises (like 3D printing)
1
2
3
4
5
6
7
8
9
10
#2
“Leaders” ranked
digital capabilities that
improve employee
satisfaction,
productivity and the
ability to collaborate
Leaders
cont’d

13
28%
44%
vs
Leaders Followers
Why this matters
“Leaders” will more heavily rely on their executive teams to help drive innovation, up from 39% over
the last decade. This finding suggests that company executives must more fully embrace an innovation
mindset.
Leaders
of “Leaders” will look their leadership teams to drive innovation
compared to “Followers”
cont’d
44%

14
Why this matters
More “Leaders” value innovation and look for it in more diverse places than “Followers,” such as customers, front-line employees,
middle managers and market research. The findings also suggest that Followers need to look at new sources of innovation to be
more competitive in the mid-2020s.
Leaders
of “Leaders” will mine innovation from more sources than “Followers”
Leaders
Followers
cont’d
* This is an average of respondents across all 4 arenas, starting with the minimum of 33%
33%
Leaders
/executive
team
Market
research
Customers directly
(including customer
data and analytics)
Front-line
employees
Front-line
employees
Customers directly
(including customer
data and analytics)
Middle
managers
Middle
managers
Leaders
/executive team
Channel partners that
bring the company’s
offerings to customers
Channel partners that
bring the company’s
offerings to customers
Suppliers
Suppliers
Academia
Academia
Best Sources of Digital Innovation Through 2025
*Mentioned by at least 33% of respondents
Market
research
1 2 7 8
3 4 5 6

15
Why this matters
Pursuing digital business opportunities comes with risk. As companies’ products, services and processes for creating demand and supply become increasingly digital,
their exposure to cyberattacks widens significantly. The findings suggest that organizations need to ensure their systems are secure across all business units and
disciplines, especially their customer, finance and intellectual property data.
“Leaders” are more obsessed with customers than “Followers”; this finding suggests they'll also be more
obsessed with preventing cyberattacks on customer data.
3 In an increasingly digital business environment, many areas of the
organization will be subject to cyberattacks
Customer
databases
Finance
Research &
development
Marketing Legal
Sales/
e-commerce
Human
resources
Distribution
/supply chain
Ecosystem
partners
Manufacturing
/production
as subject to cyberattacks
#1
“Leaders” rank customer databases as
Leaders
Followers
Leaders
1 2 3 4 5 6 7 8 9 10
Finance
Research &
development
Marketing
Legal
Sales/
e-commerce
Human
resources
Distribution
/supply chain
Ecosystem
partners
Manufacturing
/production
Customer
databases

16
43%
57%
Why this matters
Senior leaders believe they will be focused on optimizing their current business, but overall study findings indicate that innovation will be a major factor in
determining their organization’s success in the mid-2020s. This suggests that despite predicting far greater digitization of their businesses and the marketplaces in
which they will compete by 2025, most companies are significantly underestimating how much innovation they will need by then.
When asked which will be more important between now and 2025 in their strategy, products and
services, demand- and supply-generation processes, and culture & talent management approaches, even
“Leaders” chose optimization across each arena.
Leaders
4 Optimization ranks more important than innovation for organizational
growth and profitability between now and 2025
of “Leaders” on average predict optimization of their current business
model will be more important for organizational success than innovation
57%
vs
Innovation
Optimization

17
Even with the massive growth in digital opportunities that senior leaders anticipate,
most are underestimating the amount of innovation they will need to compete this decade.
Are senior business leaders prepared to lead their organizations to higher
performance in the mid 2020s?
The Big Takeaway

18
TCS 2021 Global Leadership
Study
Where, How and What Leaders Will Compete With in
the New Decade
Key Findings Report
TCS Thought Leadership Institute
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