TOP 5 CEO CHALLENGES: 2008!!!

Well, I’ll start with the one I’ve been wrestling with for the past many years; and I’m sure it must be quite obvious to you all by now. I, uhh, am growing bald... Alright, I guess I’ve lost almost all of it by now. Imagine what a ‘challenge’ I’ve had to grapple with to start off 2008! But I suspected that the majority of CEOs globally also suffered the same ‘challenge’! I wasn’t way off, as my subsequent investigations revealed that 66% of global CEOs are ‘challenged’ by some or the other kind of hair loss. And there, amusingly so, began my quest to understand the top challenges that CEOs will face this year!

I stopped at the favourite global watering hole, namely the NYSE CEO Report 2008, to find out the top five! 240 of the world’s top business leaders in more than 24 countries, when asked ‘which internal factors will affect revenue growth the most?’, gave the following list in order of priority: Management team; New technology; Strength of company brand; Strategic partnerships; Customer loyalty! Interestingly, even last year (in the NYSE CEO Report 2007), CEOs had confirmed that the same top five factors affected revenues the most. Coming back to the 2008 report, when asked a similar question with respect to what affects profit growth the most, CEOs cited the following critical factors: Operational efficiency; Management team; Compliance costs; New technology; New product development! Surprise surprise, even last year, the factors were ditto the same! The latest report quotes the statistics that 74% of today’s CEOs definitively agree “Management teams have more impact on revenue growth than they did three years ago!”

I stopped again, and this time at the superbly compiled 2007 Technology Fast 500 CEO Survey by Deloitte and Touche! With respect to ‘what factors drive growth’, the CEOs were unanimous in ranking ‘High-quality employees’ at a smashing number one. Sound business strategy, strong leadership, unique products and right timing in the market place came in at the next four positions. When questioned on ‘key operational challenges’ facing them, ‘finding, hiring and retaining qualified employees’ again came in at a super #1. And for the question of what were the ‘key personal challenges’ facing CEOs, the answers were again unanimous: ‘Developing leaders and delegating responsibility’ was number 1! Just to satisfy my suspicion, I stole a quick look at Deloitte and Touche’s 2001 CEO survey. For the question, ‘What is the single biggest challenge in managing your company’s rapid growth?’, the answer bulldozing in at number 1 was ‘Finding, hiring and retaining qualified employees.’ And when questioned, ‘What is your biggest obstacle as you continue growing your business?’, the factor of ‘Qualified workforce shortages’ was again at, you guessed it right, number 1.

If you thought that ‘global surveys’ were different from what the Asian CEOs were thinking, rest assured! The world renowned Conference Board, which surveyed 769 global CEOs from 40 countries in their report, CEO Challenge 2007: Top 10 Challenges, showed that for Asian CEOs, in the top ten challenges list, ‘Finding qualified managerial talent’ is completely and resoundingly at number 1; a fact confirmed by the brilliant 2007 report by The Economist, titled CEO Briefing: Corporate Priorities..., which proved that for emerging markets, ‘Lack of available talent’ represented the ‘greatest barrier’ for growth! Over the years 2003 till 2006, in four exhaustive and incisive studies done by the top HR consultants, the Ken Blanchard Companies, over 2000 respondents confirmed ‘developing leadership bench strength’ as the issue number one!

“People before strategy,” is what the world’s most successful CEO Jack Welch believes in, “My main job was developing talent. I was a gardener providing water and other nourishment to our top 750 people. Of course, I had to pull out some weeds too!” Steve Jobs fanatically believed that his “people are the moving force” behind Apple’s products; “My job is to create a space for them,” he famously quoted! I could go on and on but the fact is that ‘retaining passionate and talented people’ – and not fighting competition or worrying about products, technology or markets – is the number one issue today’s CEOs should focus on! If you have to make that one choice, be the Jack and the Steve of today, passionately, fanatically! Indefatigably, the truth is that the top five global challenges across continents, across sectors, across corporations that CEOs of today face are people, people, people, people and... hair!

I still haven’t found a workable solution around it guys :-(

TOP 5 CEO CHALLENGES: 2008!!!

“ONLY QUACKS HAVE ZERO VISION!”

This was actually my father’s infuriated ‘coupe de grace’ statement at my teenage nephew! According to him, my nephew’s vision could be compared with that of a bottomless pit... totally undefined! Accusing my nephew of not having even one clear defined objective in his life, my father shouted at him that – despite his having joined the undergraduate business management programme at a leading business school in India (much at the behest of ‘the family’) – the only profession that would welcome his zero vision attitude would be the honourable one that’s been mentioned above! Being a mute amused spectator to all this, and seeing the nonchalant grunt of a response of my nephew, I decided to find out whether vision was really as important to companies as all those management gurus – and my father – had made it out to be?

It was perhaps the illustrious Jim Collins who – through an almost 70 year long study (ending 1995) – in his exceptional book, Built To Last, showed that ‘visionary companies’ gave stock returns that were almost 700% more than ‘comparison (not so visionary) companies’. More recently, Stanford, in its electrifying May 2005 working paper, (Vision, Key to Creating Shareholder Value) quoted John Browne, CEO of global energy giant BP, who says, “You have to remember what your vision is, and you have to be disciplined about sticking to it in order to create shareholder value!” No wonder, since Browne took over as CEO in 1995, BP’s annual revenues have increased from $26.95 billion to $274.32 billlion – a stupendous rise of 917.88%! In a 2003 HBS report (Guiding Growth: How Vision Keeps Companies on Course), famed author Mark Lipton, who wished to prove that having a vision is of no use, amusingly had to finally confess to the contrary that “vision, in fact, makes a profoundly positive difference” to a firm’s performance. Lipton goes on to show how even “the best talent is attracted to firms with a compelling vision.”

The top-line global consulting firm, Grant Thornton’s Catalyst (their business journal) mentions that “companies maximising their shareholder value have clearly defined strategic plans (vision) that are forward looking and focused on long term success.” According to the results of a massive research by the remarkable Ken Blanchard Group of Companies (covering 2,004 worldwide respondents between 2003-2006), “failing to communicate the vision in a way that is meaningful,” is the biggest mistake that leaders make when working with others. But then came the shocker! The most respected management author, Jim Heskett, in the HBS paper titled ‘How much of leadership...’, quotes, “Companies growing (shareholder) value the most are the ones with leaders that have a clear vision, continually communicate that vision, and then get out of the way!”

And in this discreet line lies the most dramatic and compelling vision theory of modern times! The concept of ‘Zero Vision’ corporations, the other name for companies like GE, Toyota, Wal-Mart etc! How’s that you might wonder! This ‘zero vision’ concept was in reality initiated by CEOs of Japanese corporations in the late 1950s and 60s, who – in their patriotic endeavour to become world leaders – drilled into their business managers that it was purely their vision, and not their CEO’s vision, that was going to determine their firms’ success... or failure. However paradoxical it might sound, the fact is that this philosophy immediately forced the business managers working below the CEO to suddenly assume quasi-CEO responsibilities. And history shows that Japanese firms succeeded like nobody’s business, and purely because of the unbelievably high passionate commitment that was instilled in the managers due to zero vision at the top!

Interestingly, if one were to think about identifiable American visionary leaders, one would find quite a handful (from Michael Dell to Steve Jobs, from Jack Welch to Sam Walton); but if you had to name ten visionary Japanese leaders, your name list would most probably stop at one (that is, if you knew Akio Morita of Sony). That’s the extent of their commitment to zero vision! But thankfully, the same ‘visionary’ US leaders of yesteryears – from Bill Gates (Chief Architect, Microsoft) to Sam Plamisano (CEO, IBM); from Paul Otellini to Craig Barett (Intel) – are now changing to appreciate the fact that unless zero vision is passionately embraced at the top, and unless promising managers are shoved forcefully into the battlefield, radical growth beyond preset benchmarks can never be attained. However much my dad might hate it, zero vision is the philosophy of the future, and is here to stay within modern day CEOs...and oh yes, within teenaged nephews too...

“ONLY QUACKS HAVE ZERO VISION!”