Flexibility Beats New Products
IT Innovation Seen Accelerating
- Companies want, and need, to better understand their customers. The identification of changes in customer behavior and needs was cited by respondents as the most significant hurdle in the way of effective product and service innovation.
- Adaptability and innovation and are the top strategic priorities. Fully 33 percent of respondents cited swift adaptability to change as the number one management priority for creating long-term value, while 18 percent singled out speed of innovation.
- Diversification is out, specialization is in. Respondents expect competition to be fiercer in five years time, with three out of five respondents citing consolidation as their number one threat; the rest fear new entrants from emerging markets most. Faced with this pressure from above and below, 60 percent of firms will focus on improving existing products or services.
- IT will be a competitive weapon. More than 80 percent of respondents singled out IT as being of central importance to their organization's ability to drive through the changes required to cope with the many challenges they face. Indeed, almost 60 percent view IT as becoming a competitive weapon, rather than simply a driver of cost efficiency.
- The staff brain-drain is a major concern. Almost 50 percent of business leaders cite retaining personnel as the number one human resources challenge, while the same percentage fear the loss of key personnel to competitors as the biggest threat to the integrity of intellectual property.
- Pay should be tied more closely to performance. Across all regions, the overwhelming majority of respondents agreed that board-level compensation should be tied more closely to performance. At the same time, 82 percent believe that brand value will be increasingly linked to good governance.