Study Finds Human Capital and Innovation as Top Senior Executive Challenges
For more than twelve years, The Conference Board has conducted an annual survey of CEOs, chairman, and presidents from the globe’s leading organizations across the world in a quest to discover the most crucial challenges they expect to face in the upcoming year. For the 2013 survey, more than 700 senior executives responded with the top three challenges of 1) human capital 2) operational excellence and 3) innovation.
Dubbed The Conference Board CEO Challenge 2013, between September 2012 and November 2012, 729 senior executives were asked to reveal their most pressing business challenges, along with some strategies for addressing each challenge.
Not surprisingly, human capital — that is how to best recruit, manage, develop, and retain top talent — was ranked as the most pressing challenge faced among the executives polled from such countries as New York, Shanghai, and London. In order, human capital, operational excellence, innovation, and customer relationships were consistently ranked in the top five challenges by business leaders in the United States, Europe, and Asia.
“The results of this year’s survey are quite illuminating,” said Bart van Ark, Executive Vice President and Chief Economist, The Conference Board, and a co-author of the report. “Since 2008, we had seen CEOs express extreme concern about external pressures on the business environment, especially in those regions hardest hit by the economic crisis. Last year, we saw ‘global political/economic risk’ and ‘government regulation’ both ranked as top-four challenges worldwide. In CEO Challenge 2013, leaders seem to be turning away from macro factors outside their control to look hard at their own organizations, employees, customers, level of efficiency, and capacity for innovation.”
Strategies to Address Top Challenges
Overall, a common theme reported in developing strategies to overcome these challenges emerged: to “control the controllable”. In other words, instead of looking for outside help to fix problems, business leaders thought it was best to look within their own enterprise — their employees, customers, operational efficiencies, and capacity and opportunity for innovation. In particular, here’s what the executives had to say about strategies to address the top three challenges cited:
- Solving the human capital challenge: An overwhelming theme was to grow talent internally, provide employee development and training, and increase employee engagement.
- Solving the operational excellence challenge: Raising employee productivity and increasing employee engagement were seen as key strategies in overcoming the challenge of operational excellence.
- Solving the innovation challenge: While innovation was 2012’s reported top worldwide challenge by senior executive respondents, it’s third place ranking in 2013 continues to emphasize both the importance and challenge of innovation in today’s competitive business environment. While Asian leaders look to invest in more key technology to solve the innovation challenge, 60 percent of the strategies for innovation globally included developing a culture for innovation, working on developing employee innovation skills, engaging workers, and incentivizing staff. Both in Europe and the United States, engaging in strategic alliances with business partners, suppliers, and customers were given top nods for a long-term growth strategy.
“On a global basis as well as across regions, this year also saw a shift toward internal talent development as opposed to strategies focused on management or the senior team,” said Rebecca Ray , Senior Vice President, Human Capital at The Conference Board, and a co-author of the report. “In a time of uncertainty, this appears to be a long-term approach that will assure the right talent is in place to take advantage of the next boom, whenever it comes. As CEO Challenge 2013 shows, human capital is not only a critical business function in itself, but is also intimately connected with innovation, operational excellence, and other challenges.”
All-in-all, CEOs seemed to focused more than ever on people-driven strategies to both overcome top challenges and create value within their own organizations.