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Executives Are Taking a Hard Look at Soft Issues, According to Global Management Study by Bain & Company
by Bain and Company
Bain.com, March 2007
Bain Survey of More Than 1,200 International Executives Shows Significant Shift in Focus to Corporate Culture, Environmental Protection and Knowledge Management
Results of Bain & Company's Management Tools & Trends 2007 study find that softer management issues, such as corporate
culture, environmental protection and knowledge management, have now moved to the forefront of executive thinking. According to a survey
of more than 1,200 international executives by the global business management consulting firm:
- 9 of 10 believe that corporate culture is as important as strategy for business success.
- 7 of 10 consider environmentally-friendly products and practices as an important part of their mission. This environmental focus is even more
important to executives in emerging market countries (77 percent) than to those in established market countries (59 percent).
- Knowledge management, for the first time, ranks among the top-10 "most used" tools.
"Executives are actively addressing higher order needs, changing the rules and the tools of management," said Darrell Rigby,
senior Bain & Company partner and author of the Management Tools & Trends study. "Organizational culture and so-called softer issues are now
top of mind. Executives are clearly looking beyond cost-cutting for success."
Launched in 1993 and now in its 11th edition, the Management Tools & Trends study examines executive attitudes toward management
and industry trends, and evaluates the use and satisfaction with management tools. [Note to Editors: Survey methodology is explained in more
detail at the end of this announcement.]
The top-10 "most used" tools globally in Bain's Management Tools & Trends 2007 study are strategic planning (1st place), customer
relationship management (2nd), customer segmentation (3rd), benchmarking (4th), core competencies, mission & vision statements (tied for 5th),
outsourcing (7th), and business process reengineering, knowledge management, and scenario & contingency planning (tied for 8th).
When asked to consider both usage and satisfaction with management tools, the executives overall give strategic planning,
customer relationship management, core competencies and customer segmentation "above average" rankings. Conversely, RFID, corporate blogs, consumer
ethnography, loyalty management and shared service centers all score "below average" in both usage and satisfaction.
At a time when public attention and debate on outsourcing continues to grow, the Management Tools & Trends study shows the tool
losing some luster among executives. When compared to results from the previous report in 2005, outsourcing drops from 3rd to 7th place in usage.
Offshoring - a form of outsourcing - fell from 7th to 16th place in satisfaction. Offshoring also now has the 6th highest "defection rate"
in terms of the relative occurrence of companies who have stopped using it as a management tool.
Other highlights from the 2007 study include:
- Economic pessimism in China: 45 percent of executives in China are bracing for an economic slowdown compared to 27 percent in North America,
18 percent in other Asia-Pacific countries, 15 percent in Europe and 10 percent in Latin America.
- Continued globalization: 42 percent agree that cross-border acquisitions will be critical to achieving growth objectives in the next five years;
53 percent say working with China and India will be vital to success over that same period; nearly two-thirds say innovation could be boosted
dramatically by collaborating with "outsiders, even competitors."
- Emerging vs. Established Markets: Executives in emerging markets tend to use the following management tools more often than their counterparts in
established markets: total quality management, supply chain management, six sigma, corporate blogs, shared service centers and consumer
ethnography. Executives in established markets are more apt to use mergers and acquisitions, offshoring, benchmarking, scenario and contingency
planning and strategic alliances.
- Private vs. Public: 43 percent agree and 25 percent disagree that their companies would have better long-term results if privately owned; 39
percent would rather work for a privately owned company, while 27 percent would not.
- Expectation vs. Reality: 87 percent agree that information technology can create significant advantages; at the same time one-third of the
executives also believe that expected paybacks from IT investments are rarely achieved.
"In evaluating the Management Tools & Trends 2007 survey, we are keenly aware that management attitudes often shift faster than
results do," added Paul Rogers, a London-based Bain partner and head of the firm's global organization practice. "While corporate culture, for
example, is receiving considerably more management attention than in previous years, Bain research shows that fewer than 10 percent of companies
currently succeed at building high-performance cultures."
For more information about Bain's Management Tools & Trends 2007 or to schedule an interview with Darrell Rigby or Paul Rogers,
please contact Cheryl Krauss at email: cheryl.krauss@bain.com or 646-562-7863,
or Frank Pinto at email: frank.pinto@bain.com or
frank.pinto@atwoodpartners.com or 917-309-1065.
About Management Tools & Trends 2007
In 1993, Bain launched its series of research projects about management tools and trends. The objective is two-fold: to provide managers with
information they need to identify and integrate tools that will improve bottom-line results, and to understand how global executives view their
strategic challenges and priorities.
Over the past 14 years, 11 surveys have been completed - assembling a database that now includes 8,504 respondents from more than
70 countries in North America, Europe, Asia, Africa, the Middle East and Latin America.
The 2007 survey included 1221 completed surveys from a broad range of international executives. Tools were defined in a booklet,
Management Tools 2007, An Executive's Guide, mailed with the surveys to senior executives around the world. Personal follow-up interviews were
conducted to further probe the circumstances where tools are most likely to produce desired results.
About Bain & Company, Inc.
Bain & Company, a leading global business consulting firm, serves clients on issues of strategy, operations, technology, organization and mergers
and acquisitions. The firm was founded in 1973 on the principle that Bain consultants must measure their success by their clients' financial results.
Bain clients have outperformed the stock market 4 to 1. With offices in all major cities, Bain has worked with over 3,300 major multinational,
private equity and other corporations across every economic sector. For more information visit:
www.bain.com.
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