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CEOs worldwide turn from cost cutting to revenue growth, sensing economic rebound, according to land

Friday 27 February 2004 13:30 CET | News

In a survey by IBM Business Consulting Services, 80% of the worlds top corporate CEOs declared that their primary objective has shifted from cost-cutting to revenue growth. The report shows that many CEOs feel that the cost containment measures they have put in place over the last two years are now sufficient and, given a more positive view of economic trends, theyre focusing moreaggressively on growth and investment opportunities.
This new growth view was reflected by CEOs across all industries and around the world. A number of leaders in both the private and public sectors in Canada participated in the study. Two-thirds of the CEOs expect that growth to come from new products theyll develop over the next five years, with more than half expecting to enter new markets in search of growth opportunities. Asia and China in particular were cited as key new markets for revenue growth. In order to achieve their new growth objectives, 90% of CEOs expect to transform their enterprise to become more responsive, particularly to customer demand, within the next 5 years. More than half expect to be engaged in significant company-wide transformation initiatives within two years. - "Costs are totally controlled, and now we are focused on revenue growth," said the CEO of a bank in Spain. - "We are over the crisis and now were in a new cycle of growing the business," said a media company CEO in the UK. - "Our company, like most in our industry, is over the cost-cutting stage. Now it is about growing the top-line," added the CEO of one of the worlds largest telcos. "We are in attack mode, going into as many markets as we can." Barriers to Growth - Significant Skills Deficiencies As they reach for growth, however, CEOs highlighted several potential roadblocks. Most believe, for example, that their companies are not agile enough to identify and chase new market opportunities. 80% cited the ability to respond rapidly to changing market forces as a high priority in the next few years. Only 13% of CEOs rated their organizations as "very responsive" to changing business conditions with less than 10% feeling that their companies are responsive to their top three threats. In terms of becoming more responsive, the target most often cited by CEOs was the customer. More than 60% feel they need to do a better job capturing and understanding customer information rapidly in order to make swift business decisions. Almost 60% pointed to the ability to respond to customer dynamics in real-time. More than 50% predict greater customization of products by specific customer segments, with most CEOs focusing on significantly increasing customer input on the development of new and better products. - "We try pretty hard to identify external forces, and we do a pretty good job there," said the CEO of a top manufacturing company in Asia. "But then we are fairly slow in coming to decisions about what to do." - The CEO of a leading chemical company was even more pointed. "We have a history of not being flexible. We have 4,000 people worldwide that need to be reorganized to be more responsive." As companies reorient themselves toward new growth objectives in new markets and overall responsiveness, approximately 60% of CEOs feel the major barrier to change is limited internal skills, capabilities and leadership to manage the necessary transition. Just as CEOs recognize the need to change, they feel ill-prepared to do so. To date, less than 10% of CEOs rate their companys record of change management as having been very successful. More than half believe that they do not have the requisite skills to move into new markets and capture emerging growth opportunities. As a result, 75% of CEOs believe that employee education will become a critical success factor. People skills are now considered more important than such perennial factors as technology, globalization and regulatory concerns. All these issues ranked higher on the CEO agenda than environmental, socio-economic or geo-political issues. - A bank CEO in Europe noted that his company "cannot find candidates with the specific skills required to our business -- hence we must train all new recruits." - Many CEOs cited the need to develop multifaceted professionals: "We have strong researchers who are not strong busi

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Categories: Payments & Commerce | Payments General
Countries: World
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Payments & Commerce