Businesses worldwide are looking for growth in a global economy marked by slow, uneven recoveries in developed countries and slowing growth in developing countries such as Brazil, Russia, India and China.
But while they are all pursuing the same goal under similar conditions, chief executives in different countries see different obstacles to success, which, in turn, leads to different strategies, a poll of 729 CEOs from around the world suggests.
The poll, which was conducted by the US-based research organisation The Conference Board in partnership with the London-based Chartered Management Institute, found that UK-based CEOs considered their customers their biggest challenge. CEOs in the rest of the world, however, focused on their workforce.
UK business leaders seemed to be in the vanguard of a movement to place greater emphasis on customers, Ann Francke, CMI’s chief executive, wrote in the survey report. Customer relationships ranked fourth amongst all CEOs this year, up from seventh in 2012. But UK-based CEOs also need to be aware of the risk of neglecting other key priorities, Francke wrote.
For example, UK CEOs listed innovation eighth among top priorities they needed to address. CEOs elsewhere listed innovation as their third-highest priority, behind operational excellence. UK-based CEOs are also not chasing global expansion.
“Of course, there are no easy choices for CEOs faced with competing priorities and limited resources,” she added.
The 40 UK CEOs who participated in the poll also ranked operational excellence as their second biggest challenge. Human capital, which addresses hiring and workforce training, was third, government regulation was fourth, and corporate brand was fifth.
The top three priorities for UK CEOs also were within the top five in Asia, Europe and the US.
UK vs. rest of the world
Different to-do lists
Strategies to seek growth reflected the passion UK CEOs felt about customer relationships. Their top five strategic preferences were not only different but also ranked differently.
Customer relationships. In no region of the world do CEOs place customers as high on their list of challenges as in the UK, where CEOs’ top five strategies to improve customer relationships were to better understand customers’ or clients’ needs, to enhance the quality of the products, to personally engage with key customers or clients, to broaden the range of products or services and to make customer relationship processes more transparent.
Globally, CEOs thought it was more important to produce better products or services than to better understand what customers and clients needed. Their strategies to improve customer relationships also included bringing products or services to market faster and using competitive intelligence to better understand their customers or clients.
Operational excellence. UK-based CEOs were much less cost-conscious than their colleagues globally. Breaking down internal silos was the top strategy amongst UK-based CEOs to improve operations, followed by raising employee engagement and productivity and redesigning business processes. Employing various continual improvement strategies came in fourth, and making boards more effective was fifth amongst UK-based CEOs.
Globally, CEOs addressed the challenge by raising employee engagement and productivity, followed by reducing baseline cost. Breaking down internal silos was third, continual improvement was fourth, and seeking to better align strategy, objectives and organisational capabilities was fifth.
Human capital. UK CEOs didn’t share the overall global view that developing talented, committed and focused employees was the No. 1 priority to grow the business. But their top two strategies to address the challenge were the same as their colleagues: to develop talent internally and provide employee training. UK CEOs ranked hiring more talent third, followed by making senior management, front-line supervisors and managers more effective.
Globally, CEOs looked to raising employee engagement, improving performance management processes and accountability, and additional efforts to retain critical talent.
Government regulation. CEOs in the US and the UK considered government regulation a bigger problem than CEOs in other countries, even though World Bank research shows both countries are judged more business-friendly than most, including Germany, Japan and Switzerland.
But strategies to meet the government regulation challenge were similar the world over. CEOs everywhere said they strengthened internal regulatory compliance processes, increased lobbying activities, focused on competitive opportunities created by regulation and engaged with competitors to influence regulators.
UK-based CEOs also encouraged more industry self-regulation, while CEOs globally said they spend more time with regulators.
Corporate brand and reputation. CEOs in other countries don’t consider corporate brand and reputation as big a challenge as do UK CEOs, for whom it is inextricably linked to the ethical bonds a business develops with its customers, employees and societies. UK CEOs believe it’s important to communicate corporate values to customers and key stakeholders, improve alignment of business practices or management behaviour with corporate values, ensure ethical accountability throughout the business, use social media and other new communication technologies and enhance the quality of products and processes.
Related CGMA Magazine content:
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“How Corporate Expansion Strategies Can Target Emerging-Growth Powerhouses”: Rather than zeroing in on specific countries as they devise a strategy, companies should focus on cities – in particular the 440 cities in emerging markets projected to grow at double the global economic growth rate through 2025.
—Sabine Vollmer (firstname.lastname@example.org) is a CGMA Magazine senior editor.