Skip to main content

CEOs Worldwide Turn From Cost Cutting to Revenue Growth, Sensing Economic Rebound, According to Landmark IBM Survey

Yet Most Claim Serious Lack of Skills and Capabilities to Exploit Growth Opportunities

SOMERS, NY - 23 Feb 2004: In a survey unveiled today by IBM Business Consulting Services, 80% of the world's 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, they're focusing more aggressively on growth and investment opportunities.

This new growth view was reflected by CEOs across all industries and around the world. Two-thirds of the CEOs expect that growth to come from new products they'll 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 2 years.

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 organization's ability to respond to changing business conditions as "very responsive," 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.

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 company's 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.

"Clearly, CEOs are keen to transform their enterprise, to improve responsiveness, in order to go after growth objectives and new market opportunities, but they feel that they are at a crossroads -- where there is strong desire but limited capability," said Ginni Rometty, Managing Partner, IBM Business Consulting Services. "Most CEOs feel that significant deficiencies in skills and capabilities, both inside and outside their organization, may threaten the growth agenda."

The Global CEO Study 2004, the largest survey ever undertaken based on in-person CEO interviews, polled 456 top CEO's worldwide. The CEOs interviewed represent all major countries and industries. The survey is intended to provide a comprehensive view of the CEO planning agenda for the next 2-3 years.

Contact(s) information

Ian Colley
IBM Media Relations
(914) 766-2316
colley@us.ibm.com

Stacy Simpson
IBM Media Relations
(646) 598-2447
stacysim@us.ibm.com

Related XML feeds
Topics XML feeds
Services and solutions