Time for change: Solutions & Value are taking over
leaving products & technology behind
•Study about Key Success Factors for a sustainable growth
•SME-companies, Western Europe, 844 resp.
2
1 Sample's features
Executive summary / Synthesis2
3
Overview
4
Evaluation of the economic changes
5
Perception of the key success factors for growth
Action plan evaluation
3
Sample's features
Total EuropeN= 844
Industry Service
1- 50 employees
51-1000 employees
> 1000
Total EuropeN= 844
Size of the company
Total EuropeN= 844
[DEF]
CEO / Directors Manager
From October to December 2009, online research
[E] - Italy[E] - Italy[E] - Italy
1- 50 employees
51-1000 employees
> 1000
20%
16%
64%
[E] - Italy
Automotive and industrial sectors
Pharmaceuticals/ Medical Care
Insurance/ Bank & Finance
EDP - consultancy Information and
technology
FMCG - Food FMCG – Non-Food
Transport
Electronic components/
Electrical products
Sample's features / most mentioned sectors
[A] - Belgium [B] - Denmark [C] - France
[D] - Germany [E] - Italy[F] - Holland
[G] – Switzerland
Total EuropeN= 844
Automotive and industrial sectors
Pharmaceuticals/ Medical Care
Insurance/ Bank & Finance
EDP - consultancy Information and
technology
FMCG - Food FMCG – Non-Food
TransportElectronic
components/ Electrical products
Automotive and industrial sectors: Automotive industry + Technical service - Other + Machinery & Tools + Office MachineryPharmaceuticals/Medical care: Pharmaceuticals / Medical care /medical device + Health & Medical careInsurance/Bank & Finance: Bank & finance + insurance FMCG: Food and non foodElectrical and electronic products: Electronic components + Electrical products (high-tension)Transport: Transport equipment + Transport & Forwarding
Q1 In which industry do you currently work?
4
5
Executive summary – Western Europe
8 of 10 Managers see the crisis as an opportunity to change managerial practices
The success in the future comes from client orientation:• From listening, inventing new services, increasing value, better
customer service and mobilization of the intellectual and human capital• Management ability to lead to customer orientation• Sales ability to increase value, sell solutions• R&D’s ability of out-side in understanding together with development
speed.
Companies have mostly completed traditional recession actions
Highest prioritized actions for a sustainable growth are:• Strengthening human capital• Developing real quality of services• Improving ability to listen to the client• Increasing employee motivation, involvement• Earning new markets
6
Synthesis: Key success factors for growthAs the financial crisis engenders an economical recession, the levers for a durable growth are mostly based on the return to financial and commercial profitability. The crisis has every signal from a recession: hence, the directors and managers’ levers are
logically centered on a stronger customer/market orientation and strengthened core competencies.
2)- Core competencies: as the economy is subject to the competition from the emerging countries’ costs, the European industries have understood the key role of the innovation – its rhythm must be accelerated. Two other levers allow to complete the available assets: the quality of service and the mobilization of the intellectual and human assets.
1)- Market orientation: the conquest of new customers is the main priority. Some of the countries nuance it with the investment in the customer’s loyalty. The European economies have realized that the customer’s loyalty implies to invest in a strong service policy (the product is no longer enough).
3)- Internal management : the crisis engendered the erosion of the employees’ motivation. That preoccupation is particularly strong in Southern Europe (Italy) where the employees’ demotivation may engender a degradation of the social climate (hence a more pronounced preoccupation towards salary grids management). In Northern Europe, that fear also applies to the managers and directors. Their demotivation leads to the implementation of revisited management methods (project management, network/collaborative organization, etc.).
4) Financial management : the crisis engendered an erosion of profitability due a lower level of activity.Hence, the financial crisis also endered an economical crisis. Thus, the return to profitability implies to increase the activity and control the customers’ financial health. Some of the countries (Italy) are more affected by a liquidity crisis.
7
Synthesis: Action plans’ evaluationWhereas the urgent action plans have been promptly set up, the HR action plans still need to be implemented in most of the countriesAs a whole, the European companies have quickly faced the economic changes (less quickly in
Switzerland). Emergency plans are mostly ongoing or achieved.
1)- The market/customer orientation: the accent has been put on strengthening the orders portfolio. Facing the lower activity (and for some of the countries the degradation of the orders portfolio), European managers have implemented action plans in order to improve orders portfolio, the quality of service (customers’ loyalty), while the internationalization and openess to new markets seems to be a less urgent priority.
2)- Core competencies: in order to improve the service to the client, the action plans are mainly focused on improving the quality of service, accelerating the innovations’ rythm and prioritizing the organic growth vs. the external growth.
3)- Internal management: the whole considered action plans towards internal management are more recessed (ongoing or achieved in less than 6 companies out of 10), even on the three most important factors – employees’ remobilization and remotivation.
4)- Financial management: emergency plans have consisted in classic “recipes” in order to find profitability and manage liquidity issues: skills insourcing, reduction of the outsourcing expenses, process strengthening, etc.
Most of the European directors and upper managers consider that the current economic changes constitue an opportunity in order to develop new managerial practices, while the external (clients) and internal (employees) publics are meant to have active role. That reflexion fits a highly liberal trend (with some nuances though!), as the whole country plead for the market’s self-regulation.
The economic changes’ context is favorable to organizational and managerial changes.
Synthesis:Key factors vs. actions: overall results
Key factors+
Completed or ongoing +
1
2
3 4
56
8
10
11
12
13
14
15
16
18
20
21
22
23
24
2526
27
28 29
30
31
32
3334
35
36
3738
39
40
41
42
4344
46
47
4849
51
52
(Ongoing: 79%)
(Ongoing: 85%)
(Ongoing: 71%)(Ongoing: 73%)
(Ongoing: 79%)
Profitability
Acquiring new clients
Innovation frequency
Quality of services
Client retention/ loyalty
8
1
2
3
4
5
6
8
10
11
12
13
14
15
16
18
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
3839
40
41
42
43
44
46
47
484951
52
Key factors+
Completed or ongoing+
(Ongoing: 80%)
Italy confirms the trends that have been observed in the other countries, prioritizing the consolidation of the market/client orientation (acquisition of new customers, detection of new expectations). The cash crisis explains the specific attention that is brought towards the customers’ financial health and the return to solvability. Still, Italy also bets on a permanent innovation policy and on the investment in the employees and executive’ mobilization.
Client Retention
Profitability
Innovation frequency
Employees' level of
motivation
Intellectual - human capital
Financial health of clients
Acquiring new clients
Synthesis:Key factors vs. actions: Italy
10
Evaluation of the economic changesCurrent situation per country
Completely unaffected
Rather unaffected
Rather affected
Very much affected
27%
21%
41%
7%24%
41%
28%
73% 79% 59%
93% 76% 59%72%
Xx% Unaffected: completely + rather unaffected
Affected: rather affected + very much affectedXx%
Completely unaffected
Rather unaffected
Rather affected
Very much affected
27%
73%
[A] - Belgium [B] - Denmark [C] - France
[D] - Germany [E] - Italy [F] - Holland [G] -Switzerland
Total EuropeN= 844
Q04- How would you say your company's situation has been affected so far by the current economic change? Would you say it has been...
Evaluation of the economic changesCurrent situation of the most mentioned sectorsQ04- How would you say your company's situation has been affected so far by the current economic change? Would you say it has been...
[C] Insurance/ Bank & Finance
N = 41
[G] Electronic components +
Electrical ProductsN= 29
[D] EDP Consultancy Information &
technologyN= 48
[E] FMCG food and Non Food
N= 42
[A] Automotive and industrial sectors
N= 125
[B]Pharmaceuticals/ Medical Care
N= 73
[F] TransportsN= 31
Xx% Unaffected: completely + rather unaffected
Affected: rather affected + very much affectedXx%
11
12
Evaluation of the economic changesForecast of the situation per country
Xx% Better than today: better + slightly better
Worse than today: slightly worse + worseXx%
61%
12%
Better
Slightly betterNeither better nor
woseSlightly worse
WorseI can't tell / I don't
know
68%
8%
78%
7%
49%
13%
59%
15%
54%
19%
71%
5%
62%
14%
Better
Slightly betterNeither better nor
woseSlightly worse
WorseI can't tell / I don't
know
[A] - Belgium [B] – Denmark [C] - France
[D] - Germany [E] - Italy [F] - Holland [G] -Switzerland
Total EuropeN= 844
Q07- How do you expect the health of your company to evolve over the next 12 months? Would you say it will be…
Evaluation of the economic changesForecast situation of the most mentioned sectorsQ07- How do you expect the health of your company to evolve over the next 12 months? Would you say it will be…
Xx%
Xx%
Better than today: better + slightly better
Worse than today: slightly worse + worse
[C] Insurance/ Bank & Finance
N = 41
[G] Electronic components +
Electrical ProductsN= 29
[D] EDP Consultancy Information &
technologyN= 48
[E] FMCG food and Non Food
N= 42
[A] Automotive and industrial sectors
N= 125
[B]Pharmaceuticals/ Medical Care
N= 73[F] Transports
N= 31
13
Xx% Difference: I can’t tell / neither better nor worse
14
Evaluation of the economic changes impactINFORMATION sources per country
[A] - Belgium [B] - Denmark [C] - France
[D] - Germany [E] - Italy [F] - Holland [G] -Switzerland
(1): Information provided by Upper Management + Analysis by external consultants + management indicators + accounting and financial audits + Internal management meetings (2): Discussions with colleagues in the company+ Discussions with employees from other companies+ Facts of which I have knowledge internally +My intuition (3): Information from economic publications + Information from internal newsletters / communications
Total EuropeN= 812
(1) Formal information
(2) Informal information
(3) Economical press
83%
73%
36%
79%
81%
45%
(1) Formal information
(2) Informal information
(3) Economical press
Q08- You indicated that your company's health will be …..over the next 12 months. What are the sources of information that lead you to believe this? Please select the three primary sources..
15
Perception of the key success factors for growthImportance of the key success factors for growth per country
Client / market orientation
Core competencies
Internal management
Financial management
More important
Client / market orientation
Core competencies
Internal management
Financial management
As important Less important
[A] - Belgium [B] - Denmark [C] - FranceTotal EuropeN= 844
[D] - Germany [E] - Italy [F] - Holland [G] -Switzerland
[DG]
Q26- Assess the importance of these 4 categories AFTER the current economic change in terms of maintaining sustainable growth.
16
Perception of the key success factors for growthFocus on the CLIENT/ MARKET ORIENTATION per country
Total Europe (N = 844)
Belgium
Denmark
France
Germany
Italy
Holland
Switzerland
76%52%
Q16- In your opinion, which key factors of success must your company improve in order to take the opportunity of growth in the near future?
2 13
61% 39%
[E] - Italy
Acquiring new
clientsClient
retention / loyalty
Openness to new
markets
61%
17
Perception of the key success factors for growth
Focus on the CORE COMPETENCIES per country
Switzerland
Q12- In your opinion, which key factors of success must your company improve in order to take the opportunity of growth in the near future?
Belgium
Denmark
France
Germany
Italy
Holland
21
3
82%63% 45%
[E] - Italy
Innovation frequency
Intellectual / human capital
Quality of service
Total Europe (N = 844)
18
Perception of the key success factors for growthFocus on the INTERNAL MANAGEMENT per country
Q20- In your opinion, which key factors of success must your company improve in order to take the opportunity of growth in the near future?
Total Europe (N = 844)
Denmark
France
Germany
Italy
HollandSwitzerland
21
3
77%52% 48%
Skills / profiles
management
[E] - Italy
Employees' level of motivation
Middle management's
level of motivation
Total Europe (N = 844)
Belgium
19
Perception of the key success factors for growthFocus on the FINANCIAL MANAGEMENT per countryQ24- In your opinion, which key factors of success must your company improve in order to take the opportunity of growth in the near future?
Total Europe (N = 844)
Belgium
Denmark
France
Germany
Italy
HollandSwitzerland
[E] - Italy
21
3
77%61% 45%
Profitability
Cash reserves / liquidity
management
Financial health of clients
20
Perception of the key success factors for growthTop 3 of the key success factors for growth whatever the PILLAR
21
3
71%66% 63%
[A] - Belgium [B] - Denmark [C] - FranceTotal EuropeN= 844
[D] - Germany [E] - Italy [F] - Holland [G] -Switzerland
21
3
73%70% 65%
21
3
73%68% 61%
21
3
72%71% 69%
21
3
77%60% 55%
21
82%77%
21
3
72%71% 68%
21
3
76%65% 57%
Acquiring new clients
ProfitabilityInnovation frequency
Quality of
service
Employees’ level of motivation
Client retention / loyalty
Intellectual / human capital
Acquiring new clients
Profitability
Acquiring new clients
Innovation frequency
Innovation frequencyEmployee
s’ level of motivation
Profitability
Profitability
Acquiring new clients
Employees’ level of motivation
Acquiring new clients
Acquiring new clients
Profitability
Acquiring new clients
ProfitabilityQuality
of service
Intellectual / human capital
77%
3
21
Action plan evaluationLessons learnt from the economic changes
[A] - Belgium [B] - Denmark [C] - France
[D] - Germany [E] - Italy [F] - Holland [G] - Switzerland
Total EuropeN= 844
a wonderful opportunity to reflect
on and deploy new management
practices
is similar to all the others….
The economic changes is…
81%
19%
65%
35%
a wonderful opportunity to reflect
on and deploy new management
practices
is similar to all the others….
The economic changes is…
Q33- Which of these statements best describes your opinion as of today?
22
Action plan evaluationHiGHEST PRIORITIES for your company
% high priority
Q34- We'd like to know your opinion on potential levers of sustainable growth. For each, please indicate how much of a priority it represents for your company
Total Europe (N = 844)
Belgium
Denmark France
Germany
Italy Holland
Switzerland
[E] - Italy
21
3
88%84% 68%
strengthening human capital
increasing employee
motivation, involvement
improving ability to listen to the client
23
92%
93%
82%
89%
67%
83%
62%
91%
85%
74%55%
8%
7%
15%
9%
25%
17%
38%
9%
15%
24%45%
Action plan evaluationACTION PRIORITY for the CLIENT / MARKET ORIENTATION per country
Acquiring new clients Business
internationalization Customer service
Client retention / loyalty Quality of orders portfolio Openness to new markets
Level of orders portfolio Responsiveness / ability to
deliver Quality of client portfolio
Identifying new expectations
Ease / difficulty in negotiating
Acquiring new clients Business
internationalization Customer service
Client retention / loyalty Quality of orders portfolio Openness to new markets
Level of orders portfolio Responsiveness / ability to
deliver Quality of client portfolio
Identifying new expectations
Ease / difficulty in negotiating
[A] - Belgium [B] - Denmark [C] - France
[D] - Germany [E] - Italy [ [F] - Netherlands
Total Europe
[G] - Switzerland
Considered: Ongoing + Completed Not considered: Not being considered + under consideration but not yet begun
1 1 1 1
1 1 1 1
3 3
33
2 2 3 2
2 2 2 2
2
3
3
3
Q27- For each area listed below, please indicate whether an action plan is currently considered or not
24
Action plan evaluationACTION PRIORITY for the CORE COMPETENCIES per country
[A] - Belgium [B] - Denmark [C] - France
[D] - Germany [E] - Italy [ [F] - Netherlands
Total Europe
Quality of services
Organic growth
Quality of offering
Innovation frequency
Staff turnover rate
Investment frequency
Quality of recruitment
Intellectual / human capital
Quality of training
External growth
Material / technological capital
Considered: Ongoing + Completed Not considered: Not being considered + under consideration but not yet begun
Quality of services
Organic growth
Quality of offering
Innovation frequency
Staff turnover rate
Investment frequency
Quality of recruitment
Intellectual / human capital
Quality of training
External growth
Material / technological capital
[G] - Switzerland
[DEG]1
2
3
1
3
2
1
2
3 1
2
3
1
2
3
1
2
3
1
2
3 1
2
3
Q27- For each area listed below, please indicate whether an action plan is currently considered or not
25
Action plan evaluationACTION PRIORITY for the INTERNAL MANAGEMENT per country
Internal advancement
Schedule flexibility
Skills / profiles managementMiddle management's
motivationEmployees' level of motivation
Project management
Social climate
Executives' level of motivationNetwork / collaborative
managementDelegation
Career management
Salary grid management
Career internationalization
Internal advancement
Schedule flexibility
Skills / profiles managementMiddle management's
motivationEmployees' level of motivation
Project management
Social climate
Executives' level of motivationNetwork / collaborative
managementDelegation
Career management
Salary grid management
Career internationalization
[A] - Belgium [B] - Denmark [C] - France
[D] - Germany [E] - Italy [ [F] - Netherlands
Total Europe
[G] - Switzerland
Considered: Ongoing + Completed Not considered: Not being considered + under consideration but not yet begun
1 1 1 1
1111
2 2 3
3 3 2 2
3 3 3
2 2
2
2 3 3
Q27- For each area listed below, please indicate whether an action plan is currently considered or not
26
Action plan evaluationACTION PRIORITY for the FINANCIAL MANAGEMENT per country
[A] - Belgium [B] - Denmark [C] - France
[D] - Germany [E] - Italy [ [F] - Netherlands
Total Europe
Working capitalCash flow
Cash reserves management
ProfitabilityWorking capital needs
Debt controlControl over the stock price
Financial analysis / ratingFinancial health of clients
Dividend paid to shareholders
Financial health of suppliers
92%81%
95%
92%
92%
96%
100%
80%
82%
100%85%
4%13%
5%
8%
8%
4%
0%
20%
16%
0%15%
[G] - Switzerland
Working capitalCash flow
Cash reserves management
ProfitabilityWorking capital needs
Debt controlControl over the stock
priceFinancial analysis /
ratingFinancial health of
clientsDividend paid to
shareholdersFinancial health of
suppliers
1
Considered: Ongoing + Completed Not considered: Not being considered + under consideration but not yet begun
1 1 1
1 1 1 1
2 2 3
3 2 3
3 3 2 2
2322
3
3
Q27- For each area listed below, please indicate whether an action plan is currently considered or not
27