New York — Execution is taking precedence over profit and top-line growth as a focus for CEOs around the world, according to a survey of 769 global CEOs from 40 countries from The Conference Board report, CEO Challenge 2007: Top 10 Challenges. The annual report, conducted during the first quarter of 2007, 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.
When asked to rate their greatest concerns from among 121 different challenges, chief executives participating in this year’s survey chose excellence of execution as their top challenge and keeping consistent execution of strategy by top management as their third greatest concern. Sustained and steady top-line growth, which led the pack last year, now ranks second, with profit growth fourth, and finding qualified managerial talent fifth.
“This year’s overall top challenge shows that CEOs from around the world are realizing that strong execution is a critical factor in driving profits and revenues,” says Jonathan Spector, president and CEO of The Conference Board. “These executives are also becoming increasingly aware of the crucial role that people play in growing their companies.”
Judging by this year’s U.S. Top 10, finding qualified managerial talent (sixth place) and top management succession (seventh place) have become the dominant people issues for U.S. CEOs, replacing last year’s top HR concern, health care costs. The two concerns are closely intertwined because competition for talented managers will become even fiercer as many baby boomers depart the “top of the house” to move into “third-stage careers” and retirement.
Of the 125 publicly traded U.S. companies grouped as either “more successful” or “less successful,” CEOs from the “less successful” cohort feel more pressure from the costs of healthcare benefits (17.5%) than CEOs from “more successful companies” (10.4%). A comparison of the two groups also shows that the “less successful” U.S. CEOs (19.6%) report more strain from the costs/supplies of oil/energy challenge than their “more successful” counterparts (4.4%). (Those with average return on assets (ROA) greater than or equal to the median were labeled “more successful.” Those with ROA below the median were labeled “less successful.”)
Twenty-one percent of the “less successful” U.S. companies rate speed, flexibility and adaptability to change among their greatest concerns, as opposed to 10.4 percent of their “more successful” U.S. peers. Similarly, 47.4 percent of the “less successful” rank consistent execution of strategy by top management among their greatest concerns, compared to 32.8 percent of their more successful U.S. competitors.
For more information, visit The Conference Board's Web site.
Sources: DMReview, The Conference Board
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