GERRY McGOVERN: Better Connected Live 2016

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Embedding digital culture Gerry McGoverncustomercarewords.com May 24, 2016

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Hes not a serious candidateKarl RoveJune 2015

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Customer Carewords Ltd. customercarewords.comExpertsDonald Trump

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Customer Carewords Ltd. customercarewords.comEuro Grexit4

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Customer Carewords Ltd. customercarewords.comEuro Grexit6

2012: The Irish property market is still in freefall, according to the ratings agency, Moodys, which is predicting house prices will fall a further 20%

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Customer Carewords Ltd. customercarewords.comExperts7

TYPEINCREASECEO PAY535%STOCK MARKET300%PROFITS115%WORKER PAY32%INFLATION28%

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Customer Carewords Ltd. customercarewords.com8The numbers are in on 2014 CEO compensation, and as the old Seinfeld joke goes, they are real and they are spectacular. CEO pay is also controversial as the income gap widens in America.The average S&P 500 company CEO made 373 times the salary of the average production and non-supervisory worker in 2014, up from 331 times in 2013, according to the AFL-CIO.

Why is CEO pay rising sharply, and how are CEO pay packages structured to maximize executive compensation? Here are the basics you need to know to understand the big numbers behind the CEO headlines.1. How much do CEOs get paid?

The average pay package last year was $22.6 million, up from $20.7 million in 2013, according to an analysis of companies' proxy disclosures by executive-compensation data firmEquilar.The average gain in total compensation for the 200 highest-paid U.S. CEOs worked out to 9.1 percent last year. That handily thrashed the 2.4 percent economic growth and meager increase in personal income that other Americans enjoyed.Read MoreThe top paid CEOs of 2014 are The average U.S. family made $51,939 in 2013, according to the Commerce Department. The average worker makes $24.87 an hour, up 2.2 percent in the last 12 months, according to the most recent unemployment report from the Labor Department.

Rob Friedman | E+ | Getty Images2. How much of the money comes from salary, and how much from bonus and stock options?

A little more than a third of CEO pay comes in cashthe exact percentage fluctuates based on market conditions.

A survey by the Hay Group forThe Wall Street Journal, released last month, found that 37 percent of CEO pay was in cash last year, up from 35 percent in 2013, while the percentage paid in stock and stock options dropped 4 percentage points, to 54 percent. Pensions and perks made up the rest of the CEOs' package at the 50 major companies studied.

Hay found that companies added to the stock portion of CEO packages after the 2008 financial crisis, when stock prices were low and giving execs equity was likely to make them richer in the long term. The shift toward cash now may reflect higher stock prices, according to the study.

3. How tightly is CEO pay tied to performance?

Not very tightly at all, according to a much-cited 2000 study in theJournal of Management. It found that variations in company performance account for only about 5 percent of the variation between how much companies pay their top executives. The No. 1 variable is the size of the company, accounting for 40 percent of the difference.Last year, the CEO compensation growth of 9.1 percent trailed the S&P 500's 13.4 percent total return.

CEO compensation is not a good proxy for long-term company performance, either.Of executives who were among America's top 25 highest-paid CEOs in any year between 1993 and 2012, 22 percent worked for financial firms that took federal bailout money, according to the left-leaning Institute for Policy Studies.4. What do CEOs need to do to cash in big?

Equilar's data shows that there is a connection between the biggest CEO checks and companies that have been making deals, such as going public, doing big mergers or divestitures and reorganizations. Examples abound.YahooCEO Marissa Mayer made $42.1 million, up 69 percent from 2013, as the search-engine company sold its shares in Chinese e-tailerAlibaba's initial public offering. That drove a 25 percent total return for Yahoo shareholders.John Malone's unending deal-making has long helped spawn big paydays for the executives who have led a multiyear effort to spin off many of the businesses ofLiberty Media, where Malone is chairman, without having to pay taxes. Among the beneficiaries are Liberty CEO Greg Maffei ($74 million, paid by Liberty),Discovery Communicationschief David Zaslav ($156 million), and Tom Rutledge ($16 million) of Malone-controlledCharter Communications.GoProfounder Nicholas Woodman made $77.4 million. GoPro went public last June, and has zoomed in value to $6.88 billion.5. What can shareholders do about runaway CEO pay?

The short answer: Not much.Read MoreCEO compensation needs to be gutted by shareholders: AFL-CIO

Under the 2010 Dodd-Frank law, public companies must hold an advisory shareholder vote on executive compensation every three years. But the vote is nonbinding unless a company decides otherwise.

6. How is executive compensation regulated?

Not heavily. The tax code limits a company's ability to deduct pay of top executives above $1 million a year, but the provision exempts some forms of performance-based pay and has been criticized by politicians of both major parties as loophole-ridden.The Securities and Exchange Commission is considering a proposal to make companies explain their executive compensation, including explicitly comparing executive pay to stock performance, both at the company and its peers and competitors. The proposal passed a preliminary vote last month and is now in a public comment period.By Tim Mullaney, special to CNBC.com

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PREDICTABILITY

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Customer Carewords Ltd. customercarewords.comExpertsDonald Trump

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COMPLEXITY

UNPREDICTABILITY

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DIGITALCOMPLEX

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Customer Carewords Ltd. customercarewords.com12Government eu

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2015

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Pew, 2015Government Fairness

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Customer Carewords Ltd. customercarewords.com14US government

The long-term erosion of public trust in the federal government has been mirrored by a steep decline in the belief that the government is run for the benefit of all Americans.The 1960s were a period in which Americans had highly favorable attitudes toward the federal government. In 1964, 64% said that the government was run for the benefit of all the people, according to the National Election Study. Just 29% said that the government was pretty much run by a few big interests looking out for themselves.At the same time, an overwhelming majority of the public (77%) said they could trust the federal government just about always or most of the time.Yet within a decade, trust had plummeted and the share of Americans who said the government was run for the benefit of all had fallen nearly 40 percentage points from 64% in 1964 to 25% in 1974.Over the course of the past half-century, the two measures have mapped very closely. Currently, just 19% say the government is run for the benefit of all and an identical percentage says they can trust the federal government just about always or most of the time.

Religious belief in BritainSource: newsbatch.com

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Customer Carewords Ltd. customercarewords.com16Trust media

EthicalSkepticalAnalyticalCynic alDisloyalMillennial

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Source: Pew, Edelman, Gallup, Eurobarometer

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Brad Tuttle, Customer Service Hell, 2011.YESyes

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Source: Economist Intelligence Unit , 2015

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Customer Carewords Ltd. customercarewords.com21The pressure is on organisations to optimise the value of social media, cloud-based computing, mobile technology and big data analytics by embracing digital transformation from the top down.Yet according to a new study, one third of companies still have businesses split between digital and traditional practices, and only one in 20 claim a seamless customer experience across channels throughout the purchase cycle.So what can companies do better to embrace digital transformation, and which ones are doing it right?Dont stop half-wayA new study released by the Economist Intelligence Unit revealed companies ahead of the digital transformation curve have made greater progress in a fully digitally transformed business model and have seen greater results.The Digital Evolution: Learning from the leaders in digital transformation report,sponsored by Accenture and Pegasystems,wasbased on a global survey of 444 executives from the healthcare, finance and telecommunications industries. It suggested that digital transformation aspirations are high, yet making progress can be complex.One third of companies surveyed still have their business split evenly between digital and traditional practices, with most companies admitting their digital processes are only partially integrated. Meanwhile, only 5 per cent of executives surveyed globally were able to claim they had a seamless customer experience across channels throughout the purchase cycle.Adapt to customer expectationsThe growing sophistication of digital consumer technologies such as smartphones and social media platforms means that customers now have high expectations for their digital interaction with businesses. This rapid shift in customer expectations is now seen as one of the biggest drivers for digital transformation, the report found.Companies ahead of the game showed they are more likely to present a seamless, omni-channel customer experience, while more advanced companies showed success in integrating their digital processes seamlessly into other functions of the business.To be truly digital, you have to give your customers that end-to-end experience, Pegasystems A/NZ managing director, Scott Leader, said. Its not good enough to have the front-end bit, like the website or the mobile app. You need to have that seamless experience moving through to back-end fulfilment. And I think the first step there is really a maturity assessment and look at what they need to do to become a truly digital organisation.At the same time, companies identified as being ahead of the curve are driven by a wider range of forces. They were more likely to cite the pace of technological chance in their industry and growing competitive pressure as drivers than those behind the curve.Meeting customer needs and expectations is the key driver behind digital transformation but really, companies ahead of the curve are keeping ahead both in terms of innovation and those competitive pressures, Leader said.Looking at the new age and millennial consumer, Leader said expectations around service have risen substantially higher.Weve seen with Uber, for example, people expecting that level of service, he said. They want to know where their car is, when its arriving and how long its going to take. They want that seamless payment experience until the end, and to walk away a happy customer.Another example I could use is Dominos Pizza, which is really selling technology and the experience of being able to track your driver and know exactly when your pizza is arriving and who your driver is. Customers are now demanding that type of experience.Leverage real-time dataWhen it comes to the core capabilities companies sought to improve through digital transformation, 57 per cent of respondents identified the ability to support real-time transactions, more than any other capability. In addition, over one third cited improving employees with real-time information from any device as a top priority.Real-time data also played a part in personalising the customer experience and gaining new insights into customer behaviour, the report found.READ MOREChief digital officer interview: Day in the life of Penguins digital storytellerReal-time interaction management or real-time transactions, where youre engaged with the customer, could be along any of the channels - it could be a call centre, on a mobile app or a website, you could transfer between those channels, Leader explained. And the customer expects you to know who they are, so if they start on your website and come into your call centre, you need to know what theyre interested in, what their issue is and how to fix it in real time. It is an area that is there much more scope to deliver in.Consider separating and externalising digital capabilitiesThe two most common challenges identified by companies facing digital transformation were finding the right organisation and governance model moving forward.While the majority of companies have adopted a centralised strategic approach that reports to a c-suite executive, the report found ahead-of-the-curve companies are more likely to set up distinct digital business units in order to introduce new digital practices without the burden of legacy processes and systems.Ahead-of-the-curve companies also showed a greater propensity to look outside the organisation to boost their digital capabilities. These companies were more likely to outsource their digital processes, invest in digital startups or form joint ventures or partnerships to boost their digital capabilities.Embrace executive collaborationCompanies leading the way for digital are also more likely to have a chief digital officer (CDO) leading their transformation initiatives, the report found. While over half of survey respondents reported the CIO or CTO holding a primary leadership role in digital transformation, the report stressed digital transformation is rarely a one person job. The majority (69 per cent) of companies have at least two members of senior management taking a primary leadership role in digital transformation.Leader agreed CDOs will need to have a more collaborative role in organisations as digital transformation takes hold.If you look at companies that are ahead of the curve, they have set up a separate unit with a responsive ability for digital and have a CDO who is driving that, he said. The report, however, did also flesh out that for the ahead-of-the-curve companies, you cant just rely on the CDO, you need that push from c-suite executives.READ MOREThe role of chief digital officer: Destined to become redundant?A good example of effective executive collaboration Ive seen rece...

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