Frost & Sullivan
Annual CEO Survey on Growth
GIL 2009: Abu Dhabi
October 2009
CEOs’ Top Objectives: Comparative Analysis
Top Growth Objectives: Comparative Analysis Total of Top-Three Rankings
93%
Revenue growth
60%
2007
2009
60%
Customer satisfaction
26%
36%
Competitive strategy
30%
No data available.
Raising capital
30%
17%
26%
Employee satisfaction
5%
17%
Shareholder satisfaction
6%
13%
Cost reduction
21%
20%
Working capital management
12%
0%
20%
40%
60%
80%
100%
Source: Frost & Sullivan
Growth Environment
CEOs’ Top External Challenges: Comparative Analysis
CEOs' Top External Challenges: Comparative Analysis Total of Top-Three Rankings
2008
48%
2009
Econom ic recession
65%
54%
Com petitive pressure
49%
45%
Difficulty raising capital
30%
38%
Disruptive/em erging
technologies
13%
0%
20%
40%
60%
80%
Source: Frost & Sullivan
CEOs’ Top Internal Challenges: Comparative Analysis
CEOs' Top Internal Challenges: Comparative Analysis Total of Top-Three Rankings
50%
Not implementing strategy
at best practices level
2007
2009
52%
74%
Finding talent in market
place
45%
20%
Lack of reliable information
34%
25%
Corporate antibodies
8%
0%
20%
40%
60%
80%
Source: Frost & Sullivan
CEO Survey : Sources of Growth
Top Successes Regarding Growth
#1 Success
#2 Success
#3 Success
30%
23%
20%
22%
17%
15%
18%
15%
16%
15%
14%
19%
15%
13%
13%13%
11%
9% 9%
10%
10%
7%
6%
4%
4%
2%
3%
0%
Competitive
Strategy
Total Sample
Selecting
54%
Strategic
Partnering
Product
Launch
Geographic
Expansion
Technolgy
Strategies
54%
47%
47%
37%
What are the top three strategies that you have had the most growth in the past three years?
Distribution
Channel
Optimization
22%
Mergers &
Acquisitions
Growth
Sourcing
20%
13%
CEO Survey: Growth Strategy Team
Develops Your Growth Strategies?
Team Dedicated to Growth Strategy
99%
CEO
Corporate Strategy/
Developm ent
38%
Yes
62%
No
63%
Marketing
Managem ent
63%
Sales Managem ent
62%
Research &
Developm ent
53%
Investors/CFO
52%
42%
Market Research
0%
20%
40%
60%
80%
Com petive
Intelligence
37%
0%
20%
Do you have a team dedicated to formulating growth strategies? If yes, who is involved in developing your growth strategies?
40%
60%
80%
100%
Note: Multiple mention question.
CEO’s Assessment:
Organization’s Core Growth Strategies
Top-Two Ratings
60%
53%
52%
52%
51%
50%
49%
48%
Developing
competitive
strategies
Technology
integration
40%
30%
20%
10%
0%
Vision alignment
Evaluating growth
strategies
Developing new
products
Generating growth
strategies
Source: Frost & Sullivan
CEO Survey: Satisfaction with Growth During 2009 Recession
CEO Satisfaction
Board Satisfaction
Bar 1
Satisfied
Bar 1
28%
Satisfied
Dissatisfied
72%
0%
20%
40%
60%
80%
58%
Dissatisfied
42%
0%
20%
40%
60%
80%
Is your Board satisfied with the growth your organization is achieving? Are you satisfied with the level of growth your organization is achieving?
9
Future Growth Strategies: Comparative Analysis
Future Growth Strategies: Comparative Analysis Total of Top-Three Rankings
54%
Strategic partnering
2008
40%
2009
31%
29%
Customer strategies
42%
Geographic expansion
29%
33%
Competitive strategies
28%
25%
24%
Mergers and acquisitions
59%
Product launches
20%
21%
17%
Distribution channel optimization
27%
Technology strategies
12%
0%
20%
40%
60%
80%
Source: Frost & Sullivan
Assessment of Organization’s Core Growth Strategies:
Comparative Analysis
Assessment of Organization's Core Growth Strategies: Comparative Analysis % Best Practices/Strong Ratings
53%
Vision alignm ent
Developing new products
52%
Evaluating grow th strategies
52%
2009
51%
Generating grow th strategies
49%
Developing com petitive strategies
48%
Technology integration strategy
42%
Creating strategic alliances
41%
Im plem enting grow th strategies
Launching new products
31%
Expanding into new geographic m arkets
31%
29%
Outsourcing strategy
20%
Distribution channel strategy
18%
Merger and acquisition strategy
0%
20%
40%
60%
80%
Source: Frost & Sullivan
CEO’s Rating of Their Own Leadership Ability
Rating of Leadership Ability: Top-Rated
Top-Two Ratings
80%
76%
70%
66%
70%
63%
63%
62%
60%
50%
40%
30%
20%
10%
0%
Collaborating with
your team
Visionary
Aligning vision with Creating a culture of
Communicating
Developing powerful
understanding of the management team growth, innovation, organization's vision
strategy
industry
and leadership
Source: Frost & Sullivan
The CEO Survey’s Top 5 Enlightenments
1. “Great Recession” impacts growth strategy
2. CEO’s are misaligned with their teams
3. CI & Strategy are under utilized
4. Misunderstanding of best practices
5. Corporate arrogance is a major unknown
challenge
The Growth Diagnostic Blueprint
What it is
It is the keystone to interpreting client needs
•
•
Rosetta Stone was used to translate lost languages, the
GSB will translate client needs into Frost & Sullivan
solutions
•
A platform for our vision and value proposition
•
A point of integration for all Frost & Sullivan
services into a concise diagnostic tool
What it does
•
Provides a comprehensive diagnostic of the
growth process and Strategy
•
Focuses client on where to invest
•
Reveals new opportunities for growth
•
Puts you in a powerful competitive position
5 Core Areas of Diagnosis: Starting Point
1 Growth Benchmarking?
2 GIL Culture?
3 Visionary Perspective?
4 CEO’s Growth Team?
5 Growth Pipeline System?
Recommendations
•
Perform a Growth Diagnostic!
•
Learn Best Practices in Each Career
•
Develop a Diversified Growth Pipeline
•
Develop your GIL Culture with CEO’s Team
•
Visionary Perspective
•
Growth Benchmarking
•
Growth Pipeline
The Growth Acceleration System
(FGP)
18
Recommended Action (if the survey hits home)
1. Get team together for a growth strategy workshop
2. Perform a growth diagnostic on your company
3. Create a Best Practices benchmarking program
4. Get the CEO Involved with Best Practice Mentality
5. Perform vision alignment certification
6. Document the visionary perspective
7. Develop a market share expansion strategy
19
Overall Growth Picture
Current Overall Growth Rate
2009
2008
2007
80%
61%
60%
53%
40%
36%
32%35%
26%
20%
58% of CEOs describe
their organization as at
least “above the industry
average.”
14%
12%
13%
12%
6%
0%
Below industry average
At industry average
Above industry industry
Within in top 10% of
industry
#1 in industry
Source: Frost & Sullivan
20
Future Growth Strategies: Comparative Analysis
Future Growth Strategies: Comparative Analysis Total of Top-Three Rankings
54%
Strategic partnering
2008
40%
2009
31%
29%
Customer strategies
42%
Geographic expansion
29%
33%
Competitive strategies
Secondary Point: Product launches are
being considered as a future growth
strategy by significantly fewer CEOs.
28%
25%
24%
Mergers and acquisitions
59%
Product launches
20%
21%
17%
Distribution channel optimization
27%
Technology strategies
12%
0%
20%
40%
60%
80%
Source: Frost & Sullivan
21
What Does This Tell Us?
1.
2.
3.
4.
5.
6.
7.
8.
9.
Great opportunity to gain market share
CEO’s and management must invest time
CEO’s must benchmark best practices
The growth strategies should be reprioritized now
Most companies over rate their competitive position
Measurements and Benchmarks are needed
CEO’s believe they are visionary. How do we help?
CEO’s may be depressed and could miss rebound
BOD must provide more value
22
Assessment of Leadership Ability (Continued)
Rating of Leadership Ability: Lowest Rated
Top-Two Ratings
60%
50%
48%
47%
44%
39%
40%
31%
30%
25%
20%
10%
0%
Developing a CEO's Implementing growth Implementing an
growth team
strategy
innovation process
Maintaining growth
Benchmarking
growth
Leveraging all growth
tools
Source: Frost & Sullivan
23
CEO’s Growth Strategy Team
Departments/Functions Involved in Growth
Strategy Team
Growth Strategy Team
2008
60%
2009
Sales
Management
62%
76%
Marketing
Management
Corporate
Strategy
40%
40%
38%
63%
70%
No data available.
66%
67%
Research and
Development
53%
55%
Market
Research
42%
52%
52%
51%
Investors/CFO
Competitive
Intelligence
Corporate
Development
37%
38%
No data available.
33%
32%
20%
2008
2009
0%
20%
40%
60%
80%
Source: Frost & Sullivan
24
Satisfaction with Growth
Satisfaction with Organization's Growth
2007
80%
2008
2009
74%
68%
60%
50%
42%
40%
37%
28%
20%
0%
CEO's satisfaction with organizational growth
Board members/Investors' satisfaction with organizational
growth
Source: Frost & Sullivan
25
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