CEO Challenge CREATING OPPORTUNITY OUT OF ADVERSITY Building Innovative, People-Driven Organizations

Transcription

1 CEO Challenge 2015 CREATING OPPORTUNITY OUT OF ADVERSITY Building Innovative, People-Driven Organizations 1

2 Background on CEO Challenge Annual survey in its 15 th year; fielded from September 2014 to October 2014 CEOs asked to rank their top five challenges and top five strategies for meeting their top five challenges In addition we ask questions on: The most important hot button issues more immediate and tactical events and situations that CEOs believe will require much of their attention in the coming year. Two special questions on: Strategies and tactics for raising profitability in the near term Characteristics of becoming or remaining a high-performing organization 2

3 CEO CHALLENGE Big-Picture Trends Taking the offensive against slowing global growth Controlling the controllable Building a stronger and more dynamic relationship with customers critical to winning market share More integrated approach to innovation Growth challenges linked to strengthening human capital by a grow-your-own strategy A surprising lack of emphasis on cross-cultural competency Increasing comfort with big data, but continued uncertainty about how best to use it Sustainability emerges as a top global challenge CEOs seek to rebuild trust, sometimes below the radar CEOs expect much of themselves 3

4 CEO Challenge Year Over Year Global Results Human capital 1. Human capital 1. Human capital 1. Innovation 1. Business growth 2. Innovation 3. Customer 4. Operational excellence 5. Sustainability 6. Corporate brand 7. Government 8. Global political/economic risk 9. Global/international expansion 10. Trust in business 2. Customer 3. Innovation (T3) 4. Operational excellence (T3) 5. Corporate brand 6. Global political/ economic risk 7. Government 8. Sustainability 9. Global/international expansion 10. Trust in business 2. Operational excellence 3. Innovation 4. Customer 5. Global political/economic risk 6. Government 7. Global expansion 8. Corporate brand 9. Sustainability 10. Trust in business 2. Human capital 3. Global political/ economic risk 4. Government 5. Global expansion 6. Cost optimization 7. Customer 8. Sustainability 9. Corporate brand 10. Investor relations 2. Talent 3. Cost optimization 4. Innovation 5. Government 6. Customer 7. Corporate brand 8. Sustainability 9. International expansion 10. Investor relations 4

5 CEO Challenge Year Over Year Canada Results Operational excellence T1 2. Customer T1 3. Innovation 4. Human capital 5. Sustainability 6. Government T6 7. Corporate brand T6 8. Global political/economic risk 9. Trust in business 1. Operational excellence 2. Human capital 3. Customer 4. Innovation 5. Corporate brand 6. Government 7. Sustainability 8. Global political/ economic risk 9. Global/international expansion 1. Operational excellence 2. Customer 3. Human capital 4. Innovation 5. Government 6. Global political/economic risk 7. Sustainability 8. Corporate brand 9. Global expansion 1. Human capital 2. Global political/ economic risk T2 3. Customer T2 4. Cost optimization 5. Government 6. Global expansion 7. Sustainability 8. Innovation 9. Corporate brand 10. Investor relations 1. Business growth 2. Talent 3. Cost optimization 4. Government 5. Customer 6. Innovation 7. Sustainability 8. Corporate brand 9. International expansion 10. Investor relations 10. Global/international expansion 10. Trust in business 10. Trust in business 5

6 Academics most trusted spokespeople CREDIBILITY OF SPOKESPERSONS, 2014 VS IN CANADA Informed Public More Trust Less Trust 73% 60% 58% 57% 56% 53% 50% 50% 50% 50% 50% 41% 36% 34% 33% 28% Academic or Industry Expert Company Technical Expert Financial or Industry Analyst A Person Like Yourself NGO Representative Regular Employee Government Official or Regulator CEO 6

7 CEO CHALLENGE 2015 Global Top Five Strategies to Meet the Top Five Challenges 1 Human capital 2 Innovation 3 Customer 4 Operational excellence 5 Sustainability 1 Improve performance management processes and accountability Create culture of innovation Engage personally with key by promoting and rewarding customers/clients entrepreneurship and risk taking Improve our organizational agility/flexibility Ensure sustainability is part of the corporate brand identity and culture of the organization 2 Provide employee training and development Engage in strategic alliances with customers, suppliers, and/or other business partners Enhance quality of products/services Seek better alignment between strategy, objectives and organizational capabilities Incorporate sustainability goals into corporate strategic performance objectives 3 Enhance effectiveness of the senior management team Find, engage, and incentivize key talent for innovation Develop a more outward looking customer-centric culture Raise employee engagement to drive productivity Enhance portfolio of sustainable products and services 4 Raise employee engagement Apply new technologies (product, process, information, etc.) Increase speed of products and services to market Redesign business processes Engage with stakeholders to balance short-term performance pressures with long-term sustainability goals 5 Improve leadership development programs Adopt a user-centric approach to innovation Tailor marketing, promotion, Continual improvement and communications (lean six sigma, etc.) campaigns to key customer needs Treat sustainability issues as long-term risk issues 7

8 CEO CHALLENGE 2015 Global Top Five Strategies to Meet the Bottom Five Challenges 6 Corporate brand and reputation 7 Global political/economic risk 8 Government 9 Global/ international expansion 10 Trust in business 1 Communicate corporate values to customers and key stakeholders Improve our organizational agility/flexibility Strengthen internal regulatory compliance processes Enter new geographic markets Actively engage with all with existing products/services stakeholders 2 Ensure ethical accountability throughout the organization Integrate long-term risk recognition into strategic planning Focus on competitive opportunities created by Develop local management talent for top roles Foster an environment of open and transparent communications 3 Enhance quality of products and processes Update contingency plans and procedures for crises (e.g., geographical, political, relocation of employees) Encourage more industry self- Tailor marketing and communication messages to local market Focus on my own behavior as a model of ethical leadership 4 Improve alignment of business practices/management behavior with corporate values Reduce exposure to risky countries/regions Engage with competitors to Form joint ventures in target influence regulatory agenda geographic markets Make sure the quality and safety of products and services are delivered consistently at a fair price 5 Enhance corporate brand awareness and understanding across different cultures Get Board more actively involved in enterprise risk management Personally spend more time with regulators Introduce new localized products/services for customers/clients in new geographic markets Better communicate corporate values within the organization 8

9 CEO CHALLENGE 2015 Top Five Strategies to Meet the Top Five Challenges in Canada 1 1 Operational excellence Seek better alignment between strategy, objectives and organizational capabilities 2 Customer Develop a more outward looking customer-centric culture 3 Innovation 4 Human capital 5 Sustainability Find, engage, and incentivize key talent for innovation Improve leadership development programs Ensure sustainability is part of the corporate brand identity and culture of the organization 2 Continual improvement (lean six sigma, etc.) Enhance quality of products/services Engage in strategic alliances with customers, suppliers, and/or other business partners Improve succession planning for current and future needs Incorporate sustainability goals into corporate strategic performance objectives 3 Break down internal silos Engage personally with key customers/clients Apply new technologies (product, process, information, etc.) Improve performance management processes and accountability Engage with local communities to enable sustainable growth and manage expectations 4 Invest in employee training and development to improve employee skills base Use competitive intelligence to better understand customer/client needs Create culture of innovation by promoting and rewarding entrepreneurship and risk taking Enhance effectiveness of the senior management team Invest in new technologies to reduce both environmental impact and exposure to resource scarcity 5 Improve our organizational agility/flexibility Tailor marketing, promotion, Leverage expertise of and communications senior leaders to develop campaigns to key customer high-potentials and needs transfer knowledge Provide employee training and development Engage with stakeholders to balance short-term performance pressures with long-term sustainability goals 9

10 CEO CHALLENGE 2015 Top Five Strategies to Meet the Bottom Five Challenges in Canada 6 Government 1 Personally spend more time with regulators 7 Corporate brand Increase investment in corporate brand communication externally 8 Global political/economic risk Improve our organizational agility/flexibility 9 Trust in business Actively engage with all stakeholders 10 Global/internation al expansion Enter new geographic markets with existing products/services 2 Engage with competitors to influence regulatory agenda Redefine corporate brand positioning Integrate long-term risk recognition into strategic planning Foster an environment of open and transparent communications Introduce new localized products/services for customers/clients in new geographic markets 3 Increase lobbying activities to promote a level playing field 4 Engage with the public to influence government Communicate corporate values to customers and key stakeholders Enhance quality of products and processes Update contingency plans and procedures for crises (e.g., geographical, political, relocation of employees) Engage with governments to solve pressing social problems Focus on my own behavior as a model of ethical leadership Improve transparency of decision-making processes externally Enter new geographies/regions to secure access to critical input materials Form joint ventures in target geographic markets 5 Focus on competitive opportunities created by Improve alignment of business practices/management behavior with corporate values Get Board more actively involved in enterprise risk management Make sure the quality and safety of products and services are delivered consistently at a fair price Develop local management talent for top roles 10

11 CEO CHALLENGE 2015 What are your firm s profit expectations for the coming year? Increase substantially 15.5% Increase moderately 58.5% Remain the same 18.6% Decrease 4.5% N=938 N/A 3.0% 11

12 CEO CHALLENGE 2015 Top 10 Strategies for Increasing and Maintaining Profitability Global Canada United States Europe Asia China Latin America N=943 Profitability Strategies N=27 N=230 N=133 N=332 N=79 N=80 1 Focus more strongly on revenue growth Launch new products/services Leverage innovation to increase efficiency of processes T2 2 4 Leverage technology to increase efficiency of business operations T2 7 5 Increase employee engagement initiatives T T5 6 Intensify training of employees in critical areas of operational performance Organizational restructuring T5 8 9 Launch customer engagement initiatives & loyalty programs to increase demand Eliminate low margin operations Consolidate supply chain for efficiency T

13 Meeting the Challenges: Implications for the C-Suite Chief Executive Officer Building an agile organization requires a strong and innovative change management function Managing the tradeoff between innovation and sustained performance is a minefield Chief Strategy Officer The notion of sustainability needs to be embedded throughout the organization and business processes; it needs to be viewed as a part of the risk portfolio Chief Financial Officer Investment in intangibles is more critical than ever; stop viewing them as a cost rather than an investment Chief HR Officer CEOs are focused on employee engagement as a driver of improved productivity and critical to growth CEOs believe that culture has overtaken technology as the critical enabler of innovation, and they are emphasizing the importance of a strong entrepreneurial culture to drive growth. Help build a culture of innovation Chief Talent and Learning Officer CEOs are stressing the importance of strong leadership for organizational growth, along with improving leadership development programs While practitioners view global awareness and cultural sensitivity as critical to leadership development; CEOs rate these traits low on their list. How do you fix the disconnect? General Counsel In a tightening economy where individuals and organizations are tempted to take shortcuts, maintaining a strong culture of ethics is critical CEOs are stressing the importance of cybersecurity 13

14 The Conference Board, Inc. of New York, New York In collaboration with The Conference Board of Canada The full report can be accessed at e-library/abstract.aspx?did=