Tuesday, October 20, 2009

Six Key Enemies of Post-Recession Performance

This is actually a hopeful title. We are going to recover.

The Corporate Executive Board, a company with years of experience doing research, analysis, insights and more on business strategy, operations and management put together a teleconference titled Executive Guidance for 2010., with the goal of helping companies post recession.

They came up with 6 Key Enemies of Post Recession Performance.

"Enemy #1: Changed Customer Needs - A shift in consumer buying behavior that turns top sales performers into average performers can cut channel output by more than 15 percent. Companies should actively revisit their customers' needs and adapt selling models to challenge their beliefs and educate them about their own business.

Enemy #2: Top Talent Disengagement and Flight - The average organization faces an imminent 7 percent productivity loss from the combination of departing top talent and undermanaged recruiting pipelines. Companies must carefully manage employee engagement and keep recruiting pipelines full to ensure that as economic conditions improve, key projects and efforts are not crippled when even a small segment of high performers leave. One scary statistic I heard at the World Business Forum (#WBF09) was 30% of staff are looking to leave their companies when the economy improves. Scary stuff that speaks to being close to your staff and treating them right now.

Enemy #3: Increased Risk Velocity - While there is a need for faster, more agile risk management strategies, companies that build risk response capabilities stand to gain 20 percent higher revenue growth than those that focus only on risk assessment.

Enemy #4: Higher Levels of Employee Misconduct - Organizations already lose an estimated 7 percent of annual revenues to employee fraud and CEB research shows that employee misconduct has increased at a rate of 20 percent. Organizations that take an active role in exhibiting corporate values can improve employee performance.

Enemy #5: IT Budgets Targeting a Shrinking Share of Enterprise Information - Today, 40 percent of the most valuable information created by employees is out of reach of corporate IT systems. Companies need to create policies to create productive exchanges and educate employees on the use of new mediums, particularly social media.

Enemy #6: Misplaced Leaders - Companies seeking better leaders need look no further than their own organizations. CEB has found that correct reassignment and proper support of existing leaders can improve revenue and profit by more than 10 percent. “

Today’s companies need to take a good honest look at how they are operating and adjustments accordingly. Charles Darwin is famously quoted for saying “Creatures that adapt to threats and master the evolutionary game thrive; those that don't, become extinct

Thought provoking piece.

Perhaps someone should come up with the 6 Friends of Post Recession Performance to make it more positive? You know my opinion on Being Positive. For each of these enemies there is a friend (like 2 and 4 are helped by treating people like people).


At 12:54 PM, Anonymous Alex Revai said...

Three out of the six "enemies" listed are people related. One shouldn't be surprised. I just wouldn't call them "enemy" issues. Oh, and I wouldn't list these problems under just "post-recession" matters. These are perennial weaknesses, if not undoing of companies (and entire economies).

Top talent flight, employee misconduct and misplaced leaders are generally a good indicators of corporations not "treating", recognizing and/or rewarding their people as their "most valuable assets". The latter, of course, is always prominently stated in the companies' value statements. Only, that by and large, they are empty buzzwords.

An old Hungarian saying, directly translated as "The fish stinks from its head", captures the essence of the problem. If the leadership of a company doesn't lead by example and doesn't promote healthy "people" practices, then they face the above "enemies". Only, the enemy is "them", the leaders themselves.


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