Execution is taking precedence over profit and top-line growth as a focus for CEOs , according to a Conference Board global survey of CEOs, who chose “excellence of execution” as their top challenge and “keeping consistent execution of strategy by top management” as third-greatest.
The survey of 769 CEOs from 40 countries is from The Conference Board report, “CEO Challenge 2007: Top 10 Challenges.” CEOs rated their greatest concerns from among 121 enumerated challenges.
Sustained and steady top-line growth, which led the pack last year, now ranks second, with profit growth fourth, and finding qualified managerial talent fifth, The Conference Board reported (pdf).
“This year’s overall top challenge shows that CEOs from around the world are realizing that strong execution is a critical factor in driving profits and revenues,” says Jonathan Spector, President and CEO of The Conference Board. “These executives are also becoming increasingly aware of the crucial role that people play in growing their companies.”
The annual CEO Challenge Top 10 report from The Conference Board details specific challenges that CEOs face across regions (pdf), as well as by the company’s size, industry, and level of success – all factors affecting the concerns of CEOs. Highlights of the Conference Board report’s findings follow:
Judging by this year’s US Top 10, finding qualified managerial talent (sixth place) and top management succession (seventh place) have become the dominant people issues for US CEOs, replacing last year’s top HR concern, healthcare costs.
The two concerns are closely intertwined, because competition for talented managers will become even fiercer as many baby boomers depart the “top of the house” to move into “third-stage careers” and retirement.
After ranking seventh last year, the challenge of employee healthcare benefit costs slipped out of the US top 10 in 2007. Its lower ranking as a greatest concern is most likely due to the downward movement of average annual rises in employee premiums for employer-sponsored health coverage, illustrating successful implementation of cost-containment innovations.
But the cost of employee healthcare benefits still ranks much higher for US CEOs (16th) than it does for CEOs in Asia (where it ties for 69th place) or Europe (where it ties for 71st place).
Comparing ‘More Successful’ and ‘Less Successful’ Companies
Of the 125 publicly traded US companies grouped as either “more successful” or “less successful,” CEOs from the “less successful” cohort feel more pressure from the costs of healthcare benefits (17.5%) than CEOs from “more successful companies” (10.4%).
A comparison of the two groups also shows that the “less successful” US CEOs (19.6%) report more strain from the costs/supplies of oil/energy challenge than their “more successful” counterparts (4.4%).
(Those with average return on assets (ROA) greater than or equal to the median were labeled “more successful.” Those with ROA below the median were labeled “less successful.”)
With such cost pressures driving a sense of urgency, it seems only natural that 21.1% of the “less successful” US companies rate speed, flexibility, adaptability to change among their greatest concerns, as opposed to 10.4% of their “more successful” US peers.
Similarly, 47.4% of the “less successful” rank consistent execution of strategy by top management among their greatest concerns, compared with 32.8% of their more successful US competitors.
Follow rest of article here.