The survey demonstrates that the Board agenda is still having to consider the issues which ensure the business is fit for today, with being poised for growth. This is evident through the continued presence of the priorities around changing business operations to realise cost efficiencies (moving from second to top priority for 51% of senior executives), improving cash and working capital management (which moved from third to second priority for 42% of senior executives), preparing your organisation for major business changes (from first to fourth priority for 33% of senior executives) and addressing risk throughout the organisation (from fourth to fifth priority for 30% of senior executives). Companies are still paying attention to getting the basics right, although this could be through good practice rather than necessity.
The surprise new entrant however within the priorities was exploiting growth opportunities through successful transactions which suddenly appeared within the top three (moving from last to third priority for 36% of senior executives). This, combined with the optimism shown in the sector hypothesis results, shows a return to the growth agenda for many.
The economic views show that all the options to solve the debt crisis in the peripheral economies are unpalatable. Staying in the euro will require large real wage/price adjustments in these countries to restore competitiveness on top of austerity measure to correct the public finances. There would also be severe repercussions for a state which sought to solve its problems by leaving the single currency though.
The general optimism about demand within specific sectors such as retail contrasts with the overall gloomy view about any early respite from commodity price inflation. Most participants expect prices to continue to rise and for those rises to hamper the recovery.
An in-depth breakdown by country and sector highlights localised priorities for the 22 geographies and 15 market industries, plotting where each stands on the recovery map compared to the others. For many the key issues around aligning their cost base to the organisation’s future strategy and ensuring cash and working capital are consistent elements within business performance management – continuing to secure strong foundations on which to build growth.
The ongoing shift in power to developing and emerging markets provides an interesting opportunity for Europe, strong growth in the emerging markets should help Europe grow. Although Europe may be economically better off, its relative world position would still be in decline. For sectors such as manufacturing, maintaining a foothold within Europe (either in terms of supply chain or R&D) will be part of their overall strategy.
The industry sections of the SICW survey provide a fascinating snapshot of the big issues currently in play across a dozen different industry sectors. Within the public sector for example, there is a big thumbs up to greater involvement of the private sector and to a move towards more performance related pay models. Healthcare respondents are unequivocal in their support for moving away from universal tax-funded healthcare provision. Property specialists believe Europe’s stable market is about to make it a big target for inbound investment while their media counterparts express a strong belief in monetizing content through paywalls.
Back to the starting page of the Business Leaders Agenda 2011