| STRATEGIC ANALYSIS |
|
| Challenges for 2008 |
|
 |
What are the most important challenges that managers and CEO's foresee in 2008? How do companies intend to react to the new challenges facing them at the end of 2007 and beginning of 2008 (the American financial crisis)?
Looking at the sixth edition of a study conducted by The Ken Blanchard Company, a study with more than 1800 worldwide respondents from company CEO's to directors and managers, the conclusions are more than challenging if you look at the trends and changes of these past few years.
The most obvious effect is a decrease in the level of economic development brought about by the rise in oil prices and the financial crisis, despite a very promising beginning in 2007. The impact it had on companies is based on the deterioration of economic conditions as a main factor of influence alongside the pressure of competition and business growth. At the same time the management sector considers that the level of employee competence is low in comparison with their financial expectations and expectations of the company. This can be seen in the rise of resources being invested in employee training in order to help them perform at the level the company desires. Plus another provocation mentioned among the top five is changing or adapting organizational culture based on the rhythm of the business.
But why is this factor so interesting at the moment? If we look at the economic environment and the fact that we are moving faster and faster towards a society of surplus which according to the authors of Funky Business (Kjell Nordstrom and Jonas Ridderstrale) will produce a continuously growing number of similar goods with similar characteristics at similar prices, sold to an ever increasing number of consumers with the same profile and desires, then we can see that we are very close to such a moment.
And the reaction companies have is almost immediate: adapting to new conditions in which you have to produce the same results that are just as good but with lesser resources and in a shorter period of time. Changing or adapting the organizational culture aims at supplying a distinct image for the workforce in order to attract the most talented people and maintain the company's development towards creating an image of uniqueness. Whether companies will manage to do this remains to be seen.
Major Organizational Challenges
|
Theme |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
| 1 |
Competition pressure |
71% |
67% |
63% |
60% |
65% |
63% |
| 2 |
Current economic conditions |
n/a |
n/a |
n/a |
n/a |
n/a |
61% |
| 3 |
Growth and development* |
n/a |
n/a |
n/a |
53% |
60% |
59% |
| 4 |
Poorly prepared employees |
34% |
34% |
39% |
43% |
51% |
50% |
| 5 |
Changing organizational culture |
n/a |
n/a |
n/a |
n/a |
n/a |
48% |
| 6 |
The price war |
45% |
39% |
38% |
34% |
41% |
36% |
| 7 |
Innovation |
46% |
45% |
41% |
41% |
48% |
35% |
| 8 |
Technological development |
31% |
32% |
30% |
29% |
30% |
31% |
| 9 |
New regulations |
29% |
27% |
30% |
28% |
29% |
24% |
| 10 |
Global changes* |
n/a |
n/a |
n/a |
22% |
24% |
22% |
| 11 |
Strengthening the field of activity |
18% |
20% |
14% |
13% |
12% |
13% |
| 12 |
Ethics and social responsibility |
n/a |
n/a |
n/a |
n/a |
n/a |
13% |
| 13 |
Protecting the environment |
n/a |
n/a |
n/a |
n/a |
n/a |
9% |
* Only introduced in 2006 and 2007
Challenges for both middle and top management revolve around the same idea of being different in a more competitive environment in which the fight for survival and success has bizarre or atypical shapes and is in strong correlation with holding on to your valuable employees.
What is surprising for this year is the fact that the need to motivate employees takes center field, probably as a measure that can ensure a more sustainable growth in productivity as opposed to just cutting costs.
Second place is held by change management, leading to the conclusion that more and more managers feel responsible about the way change processes are implemented in the company but also the way in which people are guided through these changes.
Another spectacular aspect is the fact that among the top 5 we find a challenge that up until now seemed to only be a fashionable intellectual concept: communicating the mission, vision and values of the company to the employees.
It's fascinating to see how managers are noticing the importance of focusing their efforts on an element which in the end matters most when you want to be successful: people. And you need a lot of energy in order to inspire and motivate them but also in order to make them work as hard as you do (as a manager) for the company. Finally we must also look at the last challenges on the lists which give us as a clue as to the direction in which we're heading, one that managers clearly grasp: adapting culture with strategy, a drop in the number of talented employees, managing virtual teams and understanding generation gaps.
Top management challenges
|
Theme |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
| 1 |
Motivating employees |
47% |
48% |
48% |
53% |
54% |
58% |
| 2 |
Change management |
n/a |
n/a |
n/a |
n/a |
n/a |
55% |
| 3 |
Developing potential leaders |
74% |
58% |
58% |
63% |
64% |
53% |
| 4 |
Selecting & retaining valuable employees |
55% |
55% |
53% |
57% |
62% |
50% |
| 5 |
Communicating the mission, vision and values |
n/a |
n/a |
n/a |
n/a |
n/a |
39% |
| 6 |
Cost reduction |
58% |
49% |
50% |
45% |
43% |
38% |
| 7 |
Customer loyalty |
46% |
45% |
41% |
41% |
48% |
38% |
| 8 |
Adapting culture with strategy |
n/a |
n/a |
n/a |
n/a |
n/a |
37% |
| 9 |
Continuous innovation |
32% |
31% |
32% |
36% |
25% |
29% |
| 10 |
Succession plan |
48% |
36% |
34% |
42% |
38% |
27% |
| 11 |
Flexibility/adaptability of employees |
39% |
44% |
35% |
39% |
25% |
22% |
| 12 |
Decrease in talented employees |
n/a |
n/a |
n/a |
n/a |
n/a |
18% |
| 13 |
Managing virtual teams |
n/a |
n/a |
n/a |
n/a |
n/a |
11% |
| 14 |
Understanding generation gaps |
n/a |
n/a |
n/a |
n/a |
n/a |
11% |
So, what's the image of this year through the eyes of a couple of thousand managers from all over the world, actually what is the direction in which we are heading? There is a stronger fight between companies looming on the horizon, concerning differentiation, not just regarding products and services but also at the level of cultural organization. More energy will be invested in managing human resources, more precisely towards attracting talented people - an ever decreasing market though - and into developing them because apparently they can have a better contribution towards profit increase than cutting costs.
We're heading towards working with virtual teams, we're actually heading at a corporate level towards outsourcing certain business services while at the same time keeping management. We're also gearing up for a change in our mentality when it comes to integrating the new generation - the Y generation - in a system that wasn't accustomed to frequent changes or excessive mobility. Part of this system concerns employee retention rather than client retention, based on the idea that a team of motivated employees can have a greater contribution towards helping the business grow.
We're heading towards a more alert and instable future concerning the work force market but even more challenging when it comes to the mentality we're used to work with. We're entering the era of the Y generation from many points of view.
Rares Manolescu,
Senior Manager
|
|
|
|
|
|
|
|
|
|
|
|
|
Recommend this newsletter to a friend
|
|
|
|
|
|
|
|
|
Human Invest is a Premier League company in the arena of training and
organizational development consultancy services, present on the Romanian market since 1998.
We are recognized for conceiving and implementing programs which offer managers an authentic experience towards improving their leadership
performances, and thus we support companies in becoming more and more engaged in delivering excellent services for their clients.
|
|
|
|
|
|
|
