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What CEOs are Thinking About

Nov 4, 2005
By

Allen Bernard






The top worry for CEOs worldwide is sustained and steady top-line growth, with 37% of those surveyed naming it their top challenge.

U.S. CEOs are also expressing concerns over the ongoing effort to align IT with the business and the rising cost of employee healthcare, an issue that has low priority for CEOs in Europe and Asia, according to a global survey of chief executives released today by The Conference Board.

The survey of 658 global CEOs from 40 countries is from The Conference Board report, CEO Challenge 2006: Top 10 Challenges .


The annual CEO Challenge Top 10 report from The Conference Board, which produces The Consumer Confidence Index and the Leading Economic Indicators for the U.S. and other major nations, details specific challenges that CEOs face across regions, as well as by the company’s size, industry, and level of success — all factors affecting the concerns of CEOs.

In the U.S., the top four challenges are:

  • sustained and steady top-line growth (40%);
  • consistent execution of strategy by top management (38%);
  • customer loyalty/retention (37%); and
  • profit growth (27%).

    So what do these findings mean for IT? According to Linda Barrington, one of the report's authors and research director at The Conference Board, CIOs and other top IT managers need to be aware of their CEO's concerns and imperatives if they are to be effective in their own positions.

    "The challenge is to manage your daily operations so you've got the time to really understand these challenges and then some quiet time to think about 'How do I really internalize that to my function?'," said Barrington.

    Take consistent execution of strategy by top management, said Barrington and "[t]hat's one where, as the CIO, it sounds like something you want to be talking to; how is it you can support your CEO in trying to get to consistent execution of strategy by top management. That's the one that would require the most thought."

    By industry segment, CEOs in financial and other services industries and manufacturing also ranked aligning the business with IT as a Top 10 challenge. While CEOs of all stripe indicated they are expending more time and effort keeping with technology, she said.

    "So CEOs are finding that keeping up with technology a bigger challenge visa vi the others than they did last year," she said. "It could be for their own production processes, it could be they still haven't figured out their own Blackberry."

    CEOs in Asia rank profit growth as their top concern (42%), followed closely by sustained and steady top-line growth (41%); speed, flexibility, and adaptability to change (41%); customer loyalty/retention (35%); speed to market (33%); and corporate reputation (33%).

    CEOs based in Europe are most concerned with speed, flexibility, and adaptability to change (39%); followed by profit growth (38%); and sustained and steady top-line growth (37%).

    The survey also reveals a rising emphasis on challenges linked to increasing competitive pressure.

    More CEOs than last year have increased the importance of faster speed to market, keeping up with new technologies, industry consolidation, seizing opportunities for expansion/growth in North and South America, outsourcing and facing non-traditional competitors in their business.

    Security of plant, operations and employees also rose in the relative rankings, driven in part by the proximity of the survey to the July 7 London bombings.

    Among those challenges falling in relative ranking over the past year are realizing gains from mergers, acquisitions and alliances, and vigilance on ethics. Cash management, short-term performance pressure, cost of capital, debt burden, and transnational regulation issues also fell.

    Among the survey’s other key findings:

  • While product innovation is sixth in the Top 10 rankings of CEOs in both Europe and the U.S., it is only 25th among CEOs in Asia.
  • Sustained and steady top-line growth and consistent execution of strategy by top management were the top concerns of CEOs across all sizes of business.
  • Among the higher ranked challenges of CEOs of companies with more than $5 billion in worldwide sales are stimulating innovation and creativity, enabling entrepreneurship, and speed, flexibility, adaptability to change.

    Survey Methodology

    The Conference Board’s CEO Challenge Survey 2006 was conducted during July and August 2005. All findings and data in this report represent the accumulated experience of the senior executives surveyed.


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