Controlling the controllable

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Business leaders confirm focus is on achieving operational excellence and leveraging human capital

People driven strategies are back in vogue as business leaders chart their course for growth according to the latest authoritative survey of business leaders from The Conference Board . The continued fragility of the global economic outlook, combined with macro issues beyond their control, is obliging CEOs to focus on factors they can influence, namely opportunities to create value and improve performance from within the organisation. And so, when asked to confirm their five greatest concerns from a list, human capital and operational excellence top the poll of global CEO challenges for 2013.

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The CEO Challenge Report, an annual survey, is based upon responses from 729 CEOs, presidents and chairmen worldwide. Four of the top five challenges selected by respondents show business leaders’ desire to “control the controllable,” as they prepare their organizations for the year ahead. In contrast to previous reports, CEO attention has shifted inwards, towards improving the fundamentals of their businesses as they look to realise every opportunity for growth.

Challenges 2013 (last year's position)
Human capital 1 (2)
Operational excellence 2 (n/a)
Innovation 3 (1)
Customer relationships 4 (7)
Global political / economic risk 5 (3)

With personal insight and pragmatic advice from our advisory board, current and former CEOs of leading global companies including Bob Lutz, Ellen Marram, Michael Miles, Bernard Attali, Frank Feder, Manfred Maus and Warren Holmes, we outline where CEOs should focus their time and attention and why.

Human capital: The top-ranked challenge, it places a pivotal role in enabling business leaders to achieve success. Interestingly the bulk of the effort needs to be on the workforce at large rather than narrow on high-potential talent only. CEOs need to grow talent internally, provide employee training and development, raise employee engagement and improve management performance processes.

Operational excellence: in today’s weak economic environment, improving business performance can prove a competitive edge. Led from the top, such initiatives should target a real step change as opposed to small, incremental increases.

Innovation and time to market: what really serves to distinguish the winners from the rest of the field is the company’s ability to accelerate the pace of innovation. Despite the talent shortage, there are ways to free up capacity whose efforts can be redirected to increase output.

Customer relationships: As slow growth and stagnant markets intensify, companies need to maintain a solid customer base. Companies who excel in levels of customer service reap the rewards in terms of strong business results.

With business leaders more cautious about their own prospects and yet still under pressure from their stakeholders to secure growth, this shifting in priorities is not unexpected. We know that by taking a fresh hard look at their own organization, employees, customers, operational performance and creativity through innovation, it is possible to identify strategies to counter the challenges slow-growth conditions continue to present. While it is pleasing to see operational excellence and human capital topping the list of CEO priorities, in reality they have never been out of fashion. Striving for and delivering operational excellence and with existing resources can play a pivotal role in strengthening the very fundamentals of any business and in our opinion should be given careful consideration.

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