Executive Issues 2005: High Performance and the Need for Balance

In Executive Issues 2005: High Performance and the Need for Balance, we look at the concerns of business leaders in light of their aspirations to achieve high performance and the journey that requires. In this annual survey, more than 400 leaders of the largest companies and public sector entities around the world tell us what business issues make their Top 10 list. With three years of comparable data in hand, we are able to look at not only a snapshot of executive issues for 2005, but at trends in the data over time; we can also segment the findings to examine the priorities of different groups of executives. Drawing on this wealth of information, we asked: are executives focused on the right priorities—those that will actually move them down the path toward high performance?

Each year, Accenture conducts a survey of hundreds of senior executives of the largest organizations around the world across all industries and the public sector to identify their Top 10 business issues. Participating titles include: chief executive officer, chief information officer, chief financial officer, chief marketing officer, chief operating officer and head of human resources. The report organizes results by:

• Top of mind: Issues most on leaders' minds.
  
  
• Overlooked?: Issues deemed less important by the leaders but still warranting significant attention, according to Accenture research and experience.

Top of mind

• Strengthening the organization's human capital. Five people-related issues were in the Top 10, including the No. 1 issue, "attracting and retaining skilled staff." Trends having an impact on the strong showing of these issues include the slowly improving global economy and the aging workforce. Among other areas, high-performance businesses are able to maximize performance from their employees, both as individuals and as effective teams, and develop leaders throughout the organization.
  
  
• Building the customer base. "Acquiring new customers" is this year's third-ranked issue, with "increasing customer loyalty and retention" not far behind in fifth place. Establishing enduring, profitable customer relationships depends not only on creating and shaping demand—it also requires fulfilling demand by delivering a customer experience through marketing, sales and service interactions that is both satisfying to the customer and profitable for the company. High-performance businesses rely on differentiating traits to sustain customer loyalty.
  
  
• The return of innovation. Of course, the need for innovation never went away, but this year two innovation issues made the Top 10. Over the past decade, a patchwork quilt of research in different industries has shown that effective innovation, to the extent it can be measured, is correlated to better total returns to shareholders. Leaders of high-performance businesses understand how to innovate and that sustained high performance requires creating and managing distinctive, hard-to-replicate capabilities

Overlooked?

• The full value of information technology. Only one IT issue, "using IT to reduce costs and create value" made the Top 10 list—and it was No. 9. Technology, of course, works in partnership with human capital—the No. 1 overall concern. High-performance businesses think differently about IT: it is understood as a strategic asset to help distinguish the business. Accenture has identified five key IT capabilities needed to achieve a high-performance technology function.
  
  
• Supply chain as a driver of high performance. Despite the dramatic developments in global commerce, "globalizing the supply chain to maximize growth and minimize costs" ranked 40th as an issue. This is striking because supply chain issues may never have been more important to profitable growth as now. Political and economic considerations should be prompting executives to take a fresh look at their supply chains. Another reason: Accenture research shows a clear link to the bottom line. For companies aspiring to high performance, creating sophisticated supply chain capabilities is essential.
  
  
• Outsourcing as a creative solution. Interestingly, both of the outsourcing issues in the survey ranked near the bottom of the list. Executives who are still deciding about outsourcing may be encouraged by findings of an Accenture survey of executives with extensive outsourcing experience. The key findings: the longer a company outsources, the better it becomes at managing the process and the more pleased it is with the results. Leaders of high-performance businesses understand that outsourcing can enable performance in a number of ways—and indeed can be the way of accelerating the journey.