CREATING OPPORTUNITY OUT OF ADVERSITY Building … › ecole-des-dirigeants › nouvelles › ... · six sigma, etc.) Enhance quality of products/services Engage in strategic alliances

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CEO Challenge® 2015 CREATING OPPORTUNITY OUT OF ADVERSITY

Building Innovative, People-Driven Organizations

http://www.conference-board.org/


Background on CEO Challenge

Annual survey in its 15th 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



CEO CHALLENGE 2015

10 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



CEO Challenge Year Over Year – Global Results

2012 2011

1. Innovation

2. Human capital

3. Global political/

economic risk

4. Government

regulation

5. Global expansion

6. Cost optimization

7. Customer

relationships

8. Sustainability

9. Corporate brand

and reputation

10. Investor relations

1. Business growth

2. Talent


4. Innovation

5. Government

regulation

6. Customer

relationships

7. Corporate brand

and reputation

8. Sustainability

9. International

expansion


1. Human capital

2. Operational

excellence

3. Innovation

4. Customer

relationships

5. Global

political/economic

risk

6. Government

regulation

7. Global expansion

8. Corporate brand

and reputation

9. Sustainability

10. Trust in business

2013

1. Human capital

2. Customer

relationships

3. Innovation (T3)

4. Operational

excellence (T3)

5. Corporate brand

and reputation


economic risk

7. Government

regulation

8. Sustainability

9. Global/international

expansion


2014

1. Human capital

2. Innovation

3. Customer

relationships

4. Operational

excellence

5. Sustainability

6. Corporate brand

and reputation

7. Government

regulation

8. Global

political/economic

risk


expansion


2015



CEO Challenge Year Over Year – Canada Results

2012 2011

1. Human capital


economic risk T2

3. Customer

relationships T2


5. Government

regulation

6. Global expansion

7. Sustainability

8. Innovation

9. Corporate brand

and reputation


1. Business growth

2. Talent


4. Government

regulation

5. Customer

relationships

6. Innovation

7. Sustainability

8. Corporate brand

and reputation

9. International

expansion


1. Operational

excellence

2. Customer

relationships

3. Human capital

4. Innovation

5. Government

regulation

6. Global

political/economic

risk

7. Sustainability

8. Corporate brand

and reputation

9. Global expansion


2013

1. Operational

excellence

2. Human capital

3. Customer

relationships

4. Innovation

5. Corporate brand

and reputation

6. Government

regulation

7. Sustainability


economic risk


expansion


2014

1. Operational

excellence T1

2. Customer

relationships T1

3. Innovation

4. Human capital

5. Sustainability

6. Government

regulation T6

7. Corporate brand

and reputation T6

8. Global

political/economic

risk



expansion

2015



CREDIBILITY OF SPOKESPERSONS, 2014 VS. 2015 IN CANADA

Academics most trusted spokespeople

73%

58% 56%

53% 50% 50%

36% 33%

60% 57%

50% 50% 50%

41%

34%

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

2014 2015

More Trust Less Trust

Informed

Public



CEO CHALLENGE 2015

Global Top Five Strategies to Meet the Top Five Challenges

1 Human capital 2 Innovation 3 Customer

relationships

4 Operational

excellence

5 Sustainability

1 Improve performance

management processes

and accountability

Create culture of innovation

by promoting and rewarding

entrepreneurship and risk

taking

Engage personally with key

customers/clients

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,

and communications

campaigns to key customer

needs

Continual improvement

(lean six sigma, etc.)

Treat sustainability issues

as long-term risk issues



6 Corporate

brand and

reputation

7 Global

political/economic

risk

8 Government

regulation

9 Global/

international

expansion

10 Trust in

business

1 Communicate corporate

values to customers and

key stakeholders


agility/flexibility

Strengthen internal

regulatory compliance

processes

Enter new geographic markets

with existing products/services

Actively engage with all

stakeholders

2 Ensure ethical

accountability throughout

the organization

Integrate long-term risk

recognition into strategic

planning

Focus on competitive

opportunities created by

regulation

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-regulation

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

influence regulatory agenda

Form joint ventures in target

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

CEO CHALLENGE 2015

Global Top Five Strategies to Meet the Bottom Five Challenges



CEO CHALLENGE 2015

Top Five Strategies to Meet the Top Five Challenges in Canada

1 Operational

excellence

2 Customer

relationships

3 Innovation 4 Human capital 5 Sustainability

1 Seek better alignment

between strategy, objectives

and organizational

capabilities

Develop a more outward

looking customer-centric

culture

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,

and communications

campaigns to key customer

needs

Leverage expertise of

senior leaders to develop

high-potentials and

transfer knowledge

Provide employee training

and development

Engage with stakeholders

to balance short-term

performance pressures with

long-term sustainability

goals



CEO CHALLENGE 2015

Top Five Strategies to Meet the Bottom Five Challenges in

Canada

6 Government

regulation

7 Corporate brand

and reputation

8 Global

political/economic

risk

9 Trust in

business

10 Global/internation

al expansion

1 Personally spend more

time with regulators

Increase investment in

corporate brand

communication externally


agility/flexibility

Actively engage with all

stakeholders

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

Communicate corporate

values to customers and key

stakeholders

Update contingency plans

and procedures for crises

(e.g., geographical,

political, relocation of

employees)

Focus on my own

behavior as a model of

ethical leadership

Enter new

geographies/regions to

secure access to critical

input materials

4 Engage with the public to

influence government

Enhance quality of products

and processes

Engage with governments

to solve pressing social

problems

Improve transparency of

decision-making

processes externally

Form joint ventures in

target geographic markets

5 Focus on competitive

opportunities created by

regulation

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



CEO CHALLENGE 2015

What are your firm’s profit expectations for the coming

year?

3.0%

4.5%

18.6%

58.5%

15.5%

N/A

Decrease

Remain the same

Increase moderately

Increase substantially

N=938



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 2 1 1 3 4 1

2 Launch new products/services 4 2 2 1 1 3

3 Leverage innovation to increase efficiency of processes 3 4 6 2 T2 2

4 Leverage technology to increase efficiency of business

operations 1 3 4 4 T2 7

5 Increase employee engagement initiatives T8 5 3 9 7 T5

6 Intensify training of employees in critical areas of

operational performance 5 9 8 5 6 9

7 Organizational restructuring 6 8 9 7 12 T5

8 Launch customer engagement initiatives & loyalty

programs to increase demand 10 6 5 10 8 13

9 Eliminate low margin operations 11 10 7 11 9 8

10 Consolidate supply chain for efficiency T17 15 15 6 5 4



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

Meeting the Challenges: Implications for the C-Suite



The Conference Board, Inc. of New York, New York

In collaboration with

The Conference Board of Canada

The full report can be accessed at

http://www.conferenceboard.ca/

e-library/abstract.aspx?did=6756

www.conferenceboard.ca


http://www.conferenceboard.ca/e-library/abstract.aspx?did=6756








Documents

CREATING OPPORTUNITY OUT OF ADVERSITY Building … › ecole-des-dirigeants › nouvelles › ... · six sigma, etc.) Enhance quality of products/services Engage in strategic alliances