There are some fascinating surveys coming out at the moment, and another one has just landed in my inbox from my former colleagues at PricewaterhouseCoopers. This one - the UK Snapshot from the 13th Annual Global CEO Survey - is a fantastic research resource for students preparing for BUSS4 in June 2010 and January 2011.
The CEO survey can be found here. I have summarised some of the ley learning points which students might want to consider during their research below:
The recession in the UK was a painful experience for UK CEOs
- Many had to make dramatic changes to their organisations (link to BUSS4 spec - change management)
- Short-term objectives and actions were the focus: reducing headcount; selling off assets; preserving cash (link to BUSS3 spec - financial objectives; cost minimisation)
- CEOs had to reassess their attitude and approach to risk and contingency planning (link to BUSS4 spec - managing risk; planning for uncertainty)
- 96% of UK CEOs implemented cost-reduction exercises - 62% of which involved reducing headcount. The drive has been for an improvement in efficiency
UK CEOs believe that there has been a significant shift in consumer behaviour
- Shifts in consumer spending (predictable, given the nature of the recession) - but 36 of UK CEOs think the shift in demand in their existing markets is a serious threat to their growth prospects
- 75% of UK CEOs expect UK consumers to spend less in the future and save more
- More active involvement of consumers in new product development
- Greater consumer interest in environmental & CSR activities and records of companies
Coming out of the recession - growth will be largely organic and financed internally
- A clear and well-understood to differentiate products or services in the face of much-increased competition (link to BUSS2 marketing competitiveness, BUSS3 marketing strategies)
- Growth expected to be funded by internally generated cash (link to BUSS3 - selecting financial strategies)
- Organic growth rather than acquisitive growth is the predominant growth strategy for CEOs - a clear focus on better penetration of existing markets (link to BUSS3/4 - Ansoff)
- 74% of CEOs in the UK are committed to continued cost-cutting in 2010
- Only 14% of CEOs see acquisitions (external growth) as the main opportunity to grow their business (but this is up from just 7% in 2009). The proportion of UK CEOs expecting to make acquisitions back in 2008 was 23%. [note: a key question for BUSS4 students - why are acquisitions so much more unpopular than just two years ago?]
Risk management will become a much more important part of the strategic management process
- CEOs expect a much more restrictive regulatory environment (link to BUSS4 - legal environment)
- A cultural shift is taking place- linking reward structures closer to risk management (link to BUSS4 corporate culture / change management)
- The emergence of a new box in the organisational structures of larger, more complex businesses - the CRO (Chief Risk Officer)
- CEOs increasingly looking for their businesses to work closer with suppliers to manage risks (link to BUSS2 - working with suppliers)
A change in the culture of managing people is taking place
- Over half (52%) of UK CEOs expect to make significant changes to their strategies for employee motivation
- 65% plan to increase spending on leadership training
- 74% of CEOs plan to change their firm’s organisational structure in 2010 as we exit the recession
- 41% of UK CEOs have outsourced a business process or function during the recession - 39% plan to do more outsourcing in 2010
...and finally - what are the major lessons that UK CEOs have learned from the recent recession in the UK?
- The challenge of the recession has been to make their firms more resilient (the survival instinct) without missing out on opportunities as they emerge
- CEOs have learned more about their business models - how and why they make money (or not); which aspects of the operations & functions add real value
- Need to stay disciplined on costs, but still incur them to support innovation
- Ask the banks for finance, but dont assume you will get it
- Long-term planning is still critical - but business planning needs to assume greater volatility in the external environment
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