They cited revenue growth as their main goal twice as often as other priorities like cost cutting or increased profitability. Reflecting the various stages of economic recovery underway around the world, companies in China, India and North America were the most upbeat. Industries also are recovering at different speeds. Despite an upbeat focus on growth, the survey detected a strong underlying concern about costs and complexity. Nearly 6 out of 10 executives said that they favor long-term results over short-term earnings. Where will companies invest to unlock growth and profits?
Four big themes emerged from the survey: Innovation, information technology, reducing costs and complexity, and understanding customers. Mergers and acquisitions are another key investment trend. The uptick is likely to be particularly strong in Asia. Top 10 tools through the years This interactive chart shows the most popular tools cited by executives in the latest survey and how they compare to the most widely used tools of past years.
In boardrooms around the world, innovation is top of the agenda, as transformative technologies move from lab to market, revolutionizing business models, industries and markets. A key challenge for any company is the sheer volume and breadth of transformative technologies such as genomics, nanotechnology, robotics, advanced materials, industry 4.
Executives may view innovation as a strategic ace for coping with those forces, allowing them to steer transformation instead of being crushed by it.
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Based on responses to the survey, companies in China, India and Europe appear to be placing greater emphasis on innovation and long-term growth capabilities, substantially outpacing North American companies, likely for different reasons. China and India may be seeking to wield innovation to leapfrog established global market leaders. European firms, by contrast, are likely turning to innovation to power growth in a stagnant market and renew their competitive edge.
Companies may also be turning to innovation in response to declining customer loyalty.
Nersesian, Roy L. (R.L. Nersesian, Roy Nersesian)
Of course, developing innovative products and services is one way companies can differentiate themselves from the competition and keep customers coming back. Another tool related to improving customer loyalty, Customer Segmentation, ranked 10th in usage and third in satisfaction in European companies were the biggest users of Customer Segmentation. The urge for a more sustainable economy also may be spurring investment in innovation. Governments, companies and consumers increasingly are embracing sustainable products and processes.
Two key obstacles to growth and profits loomed large in the survey: Sixty percent of executives said excessive complexity is raising their costs and hindering growth. Globalization has given rise to exceedingly complicated corporate configurations plagued by excessive layers of management, fuzzy decision making, matrix structures and an exponential increase in communications—all of which undercut growth and profits. And there is no quick or simple antidote. At least half of the executives surveyed seem to be adapting to current challenges by trying new techniques.
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But rooting out complex structures and processes is no small feat. And even when such programs succeed, costs notoriously tend to creep upward over time. Others, including Change Management Programs, got lower-than-average global satisfaction marks. Complexity Reduction, introduced in , looks poised to do better—it ranked No.
As companies battle with complexity, Zero-based Budgeting may be another tool poised to rise in usage: A more radical approach much under discussion in boardrooms, it starts with reenvisioning the business from top to bottom. By starting with a blank sheet of paper, Zero-based Budgeting helps managers look beyond their existing organization—particularly those with complex structures following mergers or acquisitions—and design an ideal structure based on strategic goals.
Investing in the digital transformation trend to fuel growth and innovation, master complexity, and confront risks. Digital technologies have been transforming the global economy for decades, but the pace of change is quickening. Innovative new products and services enabled by IT will create tectonic shifts in industries, growth opportunities, risks and disjunctures. That may be one reason why executives are determined to improve their digital agility.
Companies may increase investment in IT to achieve a wide array of goals, from better supply chain management to increasing customer loyalty. They could also identify new markets or improve data security in an era of growing risks and volatility. The ranking of the Big Data Analytics tool in underscores the management trend.
The tool helps companies glean valuable insights from massive quantities of data that can fuel growth. Introduced to the survey in , it ranked first in satisfaction in and 11th in usage. The industries moving quickest to harness advanced analytics are healthcare, financial services, pharmaceuticals and biotech, and technology and telecommunications.
Nersesian, Roy L. (R.L. Nersesian, Roy Nersesian)
Companies that are successful in applying advanced analytics utilize it to automate a number of carefully selected decisions so that they are done better and faster, Bain research shows. Executives in chemicals and metals and consumer products are the least likely to say that advanced analytics had a significant impact on their marketing strategy.
For many companies, particularly smaller players, the era of Big Data poses a daunting resource challenge. Without the skills and capital to tap the potential of the ongoing digital transformation, many may find it increasingly difficult to close the gap with data leaders and benefit from the trend. What percentage of companies are in good shape? That figure is high, and some may be overestimating their ability. Indeed, concerns about cyber attacks showed the largest increase among all management trends since our last survey—a trend that may be accelerating the shift toward greater investment in IT.
Bain research shows that attacks are not only becoming larger but they are more complex and targeted on financial gain.
Management Tools & Trends 2015
And some organizations face advanced persistent threats. This anxiety is likely to have risen since the November cyber attack on Sony Pictures Entertainment by North Korea. Why are companies so ill-equipped to deal with the growing threat of cyber attacks? In our experience, companies often suffer a disconnect between their risk management efforts and the development of cybersecurity capabilities. We also see inconsistency in the way companies approach security planning, operations and funding. Together, these mistakes create gaps in strategy and operations that leave organizations vulnerable.
Leading organizations take a more strategic rather than operational approach to security. Another trend linked to growth and the digital transformation is the desire to better understand customers. Leading companies know that improving customer loyalty can help raise revenue and profits. Satisfaction and Loyalty Management tools can help by tracking customer views and satisfaction and diagnosing root causes of defection. Employee Engagement Surveys meanwhile ranked No. Each survey highlights regional differences in tool use and satisfaction. An interesting pattern that emerged from the survey was a clear split between regions preferring traditional tools and those going for newer tools linked to the digital transformation trend.
By contrast, Chinese and Indian companies strongly prefer newer and innovation-linked tools such as Big Data Analytics, Digital Transformation, Disruptive Innovation Labs and Complexity Reduction— perhaps viewing these tools as a way to catapult themselves into global markets as fast followers. Are two distinct camps emerging—an old school and a new school of tool users? An Updated Guide for Executives and Managers provides an overview of the concepts of operations management combined with evaluations of important computer software tools that businesspeople might use or consider purchasing for their companies.
The author also considers how the Japanese approach to business changed operations management for businesses throughout the world. The book is arranged in ten chapters. Topics include historical material, including the economic theories of Adam Smith ; the engineering of Eli Whitney ; similarities and differences in feedback mechanisms of the United States , Soviet Union , and Japan; and considerations of concepts of quality under definitions crafted by theorists Frederick Taylor and W.
Nersesian introduces the concept and use of quantitative models and how to select the best model to use for a given business situation. He provides guidance on business forecasting, establishing inventory and purchasing practices, creating useful production schedules, and applying concepts of quality and continuous improvement to business and manufacturing processes. Nersesian's work "will be useful for beginning executives and managers involved in operations management or who are eager to learn about up-to-date computer programs in relation to production," commented Hollie Marie Easterling in the International Journal of Commerce and Management.
In addition, Easterling noted, "The book also help managers and executives better understand quantitative models, work teams, forecasting, inventory classification systems, purchasing practices, and continuous improvement. A Comprehensive Guide to Conventional and Alternative Sources covers the need for creating new and sustainable sources of energy for the world of the new century.
Nersesian notes the grim but often overlooked fact that running out of a natural resource does not mean that demand will drop or that alternates can be found.
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He discusses the tremendous technological demands of energy production, and how many improvements and advances will be necessary to meet the global need for energy. He recounts the California energy scandal, looks at the use of biomass energy sources worldwide, considers alternative energy sources, and describes the ongoing quest for a truly sustainable energy source. He also explores how a hydrogen-based energy economy would function and what it would mean to the world's troubled environment. An Updated Guide for Executives and Managers, p.
A Guide for Business Planners and Strategists, p. With Visual Basic Application, p. A Computer-based Guide for Nonspecialists, p. Greenwood Publishing Web site, http: Cite this article Pick a style below, and copy the text for your bibliography. Retrieved September 21, from Encyclopedia.
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