Weitere ähnliche Inhalte Ähnlich wie Rethinking Performance Manage Ähnlich wie Rethinking Performance Manage (20) Rethinking Performance Manage1. Rethinking Performance
Management
A Better Way to Drive Business
Outcomes
Scott Engler, Senior Global Executive Advisor, CEB Middle Market
Mark Clauss, Managing Director, CEB Middle Market
CEB Middle Market Report
Q1 2014
2. 2
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CEB Middle Market Report
Q1 2014
Table of Contents
State of the Middle Market 3–7
Middle Market Indices 8–10
Middle Market Sentiment 11
Divergence Report 12–13
Finance Report 14
Human Resources Report 15
Information Technology Report 16
Legal Report 17
Marketing Report 18
Operations Report 19
Sales Report 20
About CEB
CEB is the leading member-based advisory company. By combining the best practices of
thousands of member companies with our advanced research methodologies and human
capital analytics, we equip senior leaders and their teams with insight and actionable
solutions to transform operations. This distinctive approach, pioneered by CEB, enables
executives to harness peer perspectives and tap into breakthrough innovation without
costly consulting or reinvention. The CEB member network includes more than 16,000
executives and the majority of top companies globally.
Introduction
Each quarter, CEB surveys hundreds of executives across the corporate suite to define the
State of the Middle Market and uncover differences in sentiment between executives at
midsized and large enterprise companies. This report details themes and key data findings
from this quarter’s survey.
3. 3
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Companies are essentially throwing away value. The root of the problem is a simple
disconnect between how companies manage performance, how executives communicate
and collaborate on the performance management processes, and how dedicated and aligned
the strategic plan is to the business goal.
n = 1,163.
Source: CEB analysis.
Degree of Alignment with Corporate Goals
Percentage of Workforce
79%
Nonaligned
21%
Aligned
Seventy-three percent of midsized
companies are forecasting higher
revenue over the next 12 months.
Performance Gap Performance Achieved
n = 120 CFOs and heads of Financial Planning and Analysis (FP&A).
Source: CEB analysis.
Percentage of Full Potential Achieved as a Result of Existing
Performance Management Mechanisms
Average of All Respondents
Revenue Growth Profit Growth Shareholder Value
0%
50%
100%
71%
29%
71%
29%
68%
32%
■■ On average, companies fail
to achieve about 30% of their
potential.
■■ Nearly 80% of employee goals
are not actively aligned with
company goals.
Driving Business Performance Through People Performance
Although midsized companies are focusing on new strategies to drive growth, CEB research
found that many of them could hit their growth objectives by simply maximizing their
current strategies. What midsized companies don’t realize is that their current performance
management systems are inhibiting significant potential for growth.
4. 4
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Underperforming companies often have disconnected performance management systems
that are detached from corporate goals and essentially drive conflicting behaviors. To
overcome this, companies must take an unwieldy mix of targets, activities, people, and
resources and create a system focused on the company’s goal. This approach starts with
understanding what business performance management is, and how to use it to drive
outcomes, and then linking that process to human capital performance management.
A Business Performance Management Process That Drives Outcomes
Our research shows that “performance management” is an umbrella term for a broad set
of analytical and management tasks that companies design to help leaders understand and
guide firm performance.
Employee Performance Improvement Needed to Achieve Business
Goals Across the Next 12 Months
Managers
0%40%0%40%
Mean = 22%
CHROs
0%40%0%40%
Mean = 25%
Executives
0%40%0%40%
Mean = 20%
50% 50% 50%
25% 25% 25%
0% 0% 0%
Source: CEB analysis.
Business Performance Management Process
Source: CEB analysis.
Capital
Reallocation
Operating
Reviews
Strategic
Objective
Financial
Objectives
Performance
Targets
Budgets
Incentives
Forecasts
Management
Reports
Although the majority of the companies surveyed engaged in performance management
tasks, the ultimate impact on performance varies substantially. Most often, we found that
key process activities succeed only at communicating outcomes, stopping well short of
influencing them.
Companies on track to realize the full value of their growth strategies have fundamentally
changed their approach to business performance management. They understand that
managing performance isn’t just about measuring it along the way; it’s about starting out
with a plan that aligns employee behavior with organizational objectives. By connecting
human capital to business goals, leading companies not only optimize their existing
resources by focusing them on high-value growth tasks but also measure employee impact
in a way that helps them determine how to course correct when they fall behind.
Executives, managers, and heads
of HR report that they need to
achieve 20% to 25% improvements
in employee performance to hit
12-month objectives.
5. 5
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A New, New Normal
Executives in today’s unpredictable business environment are faced with a myriad of
changes that have dramatically altered what drives success and failure.
Increasingly matrixed organizational structures, more information, greater collaboration,
and more geographical diversity (i.e., coordinating across time zones, cultures, and
customer segments) have permanently changed the performance equation. So why have
performance management systems stayed the same?
Re-Envisioning Human Performance Management
Our research shows that current measures of performance management are at best
inadequate and at worse counterproductive.
In today’s fast changing, highly networked business environment, many HR executives are
left questioning the value of their current process and actively looking for ways to more
accurately measure and drive performance.
BusinessUnitPerformance
AgainstProfitGoals
Business Unit–Specific Average
Employee Performance Score
0 100
No Correlation
100
a No correlation exists between performance review scores and business unit revenue.
b Business unit profitability provided by participating organizations.
n = 23,339.
Source: CEB 2012 Corporate Leadership Council High Performance Survey.
Correlation of Business Unit–Specific Employee Performance Score
with Business Unit Profitability a,b
CEB analysis showed no correlation
between performance management
ratings and business unit
performance.
6. 6
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Organizational structures are collapsing into defacto matrices, and 50% of employees report
having more people involved in the decision-making process than ever before.
In a business environment that is more fluid, over saturated with information, and
constantly disrupted by technology, most organizations are in a state of persistent and
dramatic change, often unable to sustain competitive advantages long enough to capitalize
on them.
Borrowing a military acronym, our research shows that midsized companies are in a
constant “VUCA” environment—volatile, uncertain, complex, and ambiguous—and it’s not
going to change. In this VUCA world, leaders have to embrace the new work environment
and to do so, they must change their underlying assumptions about leadership. We now
have to accomplish our goals through employee networks: collaborating webs of knowledge
and projects that are both internal and external to an organization.
It’s Time to Rethink Performance Management
The performance management equation has changed for good, and our current measures
of performance are no longer adequate. Only 23% of HR executives today believe their
performance management processes accurately reflect employee contributions.
A New, New Normal
By Percentage of Employees Reporting Change
n = 23,339 employees.
Source: CEB 2012 High Performance Survey.
Geographically
Dispersed
Workforces
More Matrixed
Organization
Structures
Greater
Amount of
Collaboration
Required
Higher Volume
of Information
0%
40%
80%
57%
50%
67%
76%
Our recent survey of 23,000 senior
leaders and managers showed that in
the past year:
80%
have been given
more responsibility
76%
are being asked to
achieve more and
broader objectives
65%
must deliver
business results
faster
50%
have a more global
role
54%
have had frequent
shifts in job
responsibilities
Our Performance Management Process Accurately Reflects Employee
Contributions
Percentage of HR Executives
23%
Agree
77%
Neutral or
Disagree
n = 69.
Source: CEB 2012 Performance Management Head of Function Survey.
Seventy-eight percent of HR
executives tell us network
performance has been more
important than individual
performance over the past three
years.
Performance management systems must now adapt to reward networked performance,
drive an enhanced set of competencies, and enable collaboration across the enterprise.
7. 7
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Driving Human Capital and Business Outcomes
The best companies understand and connect the new drivers of performance and adapt to a
turbulent, connected, and distributed environment in four main ways:
1. Simplify and focus performance management to a few vital goals.
Good performance management begins with focus. Many companies chase far too
many outcomes and trust a “cascade” to deliver alignment—the corporate equivalent
of the telephone game—leaving workforces unaligned, disengaged, and inefficient.
The best companies drive performance by clarifying the key drivers of success and on
creating momentum and excitement for achieving a few clear goals through team and
network engagement.
2. Link metrics and tracking to behavior and milestones.
Many companies set targets that only tangentially align to long-term goals. They set
too many goals, fail to track completion of needed tasks, or fail to incent the right
behaviors. The best companies put in place tracking mechanisms that pressure-test
metrics for alignment against future goals, track task completion and metric success,
measure impact, and reward those employees who drive the right outcomes in the
right way.
3. Create a connected, transparent performance climate.
Most performance management systems fail to measure employees’ real network
impact, rewarding and promoting individual performers who may do little to impact
the rest of the organization at the expense of true network performers. To achieve high
performance, the best companies establish a climate of trust, create incentives for joint
MBOs, and reward those who drive organizational value over personal achievement.
4. Enable adoption through narrative reviews, triggers, and focused reporting.
Research shows that 95% of midsized company data isn’t useful; however, many
companies spend so much time overwhelmed by that data that they inadvertently
obscure the ability to sense changes in the environment. Even if they do notice them,
they rarely have the decision-making ability needed to adjust and reallocate midstream.
The best companies set escalation and divestment triggers; focus their reporting and
reviews on changes in the environment, strategic shifts, and adjustments; and regularly
report on human capital and operational expenditure resource allocation over future
potential to reduce sunk cost and defensive decision making.
Do our goals generate momentum
and enthusiasm and allow us to
fully resource the few, vital bets
that will drive value?
Do our metrics drive the behavior
we want?
Does our performance
management system reward
enterprise contributors over
individual contributors?
Do our business reviews help us
make the right forward-looking
decisions?
8. 8
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The Quest for Growth with an ROI
Driving growth is by far the top priority for midsized companies this year. In fact, 73% of
companies (up 5% from last quarter) expect revenue to increase during the next 12 months.
However, that top line expectation is also coupled with bottom line diligence: 68% of
middle market companies (a 5% increase from last quarter) also expect cost pressure to
increase during that same time.
Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
0.00
3.00
6.00
3.47
3.90 3.82
4.15 4.06
CEB Middle Market Near-Term Growth Index
Source: CEB 2013 Middle Market Executive Confidence Index.
Neutral = 3.00
Long-term investment drivers—such as investment in R&D and capital expenditures—
improved after slowing down in the second half of 2013, with the CEB Middle Market Long-
Term Growth Index up 5% on the year as companies continue to invest in growth.
Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
0.00
3.00
6.00
3.28 3.32 3.46 3.37 3.43
CEB Middle Market Long-Term Growth Index
Source: CEB 2013 Middle Market Executive Confidence Index.
Neutral = 3.00
9. 9
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0% 50% 100%
89%
74%
73%
41%
21%
CEB Short-Term Growth Indicators
Percentage of Midsized Companies Expecting Increase Over the Next 12 Months
Sales to Existing
Customers
Sales to New
Customers
Revenue
Marketing Budget
per Revenue
Dedicated Advertising
Agency Employees
Source: CEB 2013 Middle Market Executive Confidence Index.
Although the percentage of companies expecting to increase the introduction of new
products remains the same at 60%, 12% more companies are now expecting new orders
over the next 12 months and 16% more companies are expecting to increase production.
Midsized Companies Expecting
Increase Over the Next 12 Months
Introduction of New
Products
New Orders
Production
Capacity
Introduction of New
Products
New Orders
Production
Capacity
Source: CEB 2013 Middle Market Executive Confidence Index.
CEB Production Indicators
Percentage of Midsized Companies Expecting Increase Over the Next 12 Months
0% 50% 100%
60%
76%
76%
40%
Midsized Companies Expecting
Increase Over the Next 12 Months
Note: Second value refers to difference from
Q3 2013.
Note: Second value refers to difference from
Q3 2013.
60% ( 0%)
76% ( 12%)
76% ( 16%)
40% ( 16%)
Sales to Existing
Customers
89% ( 2%)
Sales to New
Customers
74% ( 10%)
Revenue 73% ( 5%)
Marketing Budget
per Revenue
41% ( 8%)
Dedicated Advertising
Agency Employees
21% ( 8%)
Maximizing Current Sales Channel and Product Pipeline
The number of companies expecting increased short-term sales increased marginally,
while expectations for sales to new customers dropped substantially. Ten percent fewer
companies now expect higher sales to existing customers.
10. 10
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Tapping into Organic and Inorganic Growth
With companies still sitting on high levels of cash, the fourth quarter of 2013 saw a small
shift away from M&A and toward R&D.
0%
25%
50% 47%
41%
47%
Source: CEB 2013 Middle Market Executive Confidence Index.
CEB Long-Term Growth Indicators
Percentage of Companies Planning to Increase Expenditures Over the Next 12
Months
R&D
Expenditures
Number of
M&A Deals
Capital
Expenditures
Change in CEB Long-Term
Growth Indicators
R&D:
M&A:
CapEx:
Note: Second value refers to difference from
Q3 2013.
47% ( 6%)
41% ( 4%)
47% ( 0%)
11. 11
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Source: CEB analysis.
Note: Totals may not equal 100% due to rounding.
Lower No Change Higher
0% 50% 100%
5%
61% 35%
4%
69% 27%
7% 51% 41%
12% 63% 24%
27% 54% 20%
63% 34%
20% 45% 34%
38% 36% 26%
16% 45% 38%
11% 50% 40%
58% 39%
31% 54% 15%
Energy Costs
Value of United
States Dollar
Economic Growth:
United States/Europe
Interest Rates
Consumer Confidence
Inflation
Major Nonenergy
Commodities
Foreign Competition
Economic Growth:
Emerging Economies
Access to Credit
Government Spending
Unemployment
3%
4%
5%
3%
North America 97%
Europe 24%
Asia and Australia 21%
Central and South America 7%
Where Do You Anticipate Growth in Revenue?
Sentiment Indicators
Middle Market Sentiment
Among the macroeconomic factors affecting midsized companies, more executives see
higher interest rates, inflation, and economic growth in the United States, Europe, and
emerging markets.
Contrary to large enterprise companies, midsized companies are far more focused on
revenue growth in North America and much less focused on Central and South America
and Asia and Australia.
12. 12
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Middle Market Divergence Report
Higher
Revenue 7%
Cost Pressure (1%)
Head Count 21%
Revenue Industry 6%
Lower
Revenue (6%)
Cost Pressure (1%)
Head Count (13%)
Revenue Industry (6%)
Where Middle Market Is Different
To fuel growth while improving efficiency, midsized companies are diverging from larger
company expectations in terms of revenue pressure, cost pressure, revenue expectation for
industry, and notable head count.
Where Middle Market Is Forecasting More Growth Than Large
Companies in 2013
In addition to those four areas, midsized companies are expecting significantly higher
increases than larger companies in the following areas:
Finance
■■ Finance Department Budget
■■ G&A
HR
■■ Average Health Care Cost per Employee
■■ Average Total Compensation per Employee
■■ Average Training Spend per Employee
■■ Total Hiring Volume
■■ HR Budget
■■ In-House Training and Education
■■ Benefits (Health)
■■ Benefits (Other)
■■ HR Staff
IT
■■ IT Software Expenditure
■■ IT-Related Consultant Advisory Spend
Marketing
■■ Marketing Budget per Revenue
Difference Between Percentage of Middle Market Companies with Higher
Expectations Versus Large Enterprise Companies
Difference Between Percentage of Middle Market Companies with Lower
Expectations Versus Large Enterprise Companies
13. 13
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Real Estate
■■ Number of Work Spaces
■■ Green Initiatives (LEED)
Sales
■■ Sales New Customers
■■ Sales Existing Customers
■■ Sales Head Count
Operations
■■ New Orders
■■ Production
■■ Labor Costs
■■ Capacity
14. 14
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0%
25%
50%
0%
25%
50%
21%
36%
22%
45% 47%
41%
47%
Midsized company finance
departments are focusing on
strengthening strategy development,
improving business performance
management to drive execution, and
building processes and capabilities to
increase the impact Finance has on
business partner decisions.
Middle Market by Function
FINANCE
Percent Difference of Companies Expecting Increases Over Decreases
in Each Area
To find out more about CEB Finance Leadership Council for Midsized Companies,
click here.
■■ Strategic risks account for five of
the top 10 risks facing midsized
companies.
■■ Fewer than one in three
companies believe their teams
consistently derive business
insight from data.
■■ Only 5% of the data Finance
provides is viewed as helpful by
the organization.
Source: CEB 2013 Middle Market Executive Confidence Index.
Functional
Currency
Rates
Lending
Standards/
Accessto
Credit
R&D
Expenditures
Finance
Department
Budget
G&A
Numberof
M&ADeals
Capital
Expenditures
The Top Five Areas in Which CEB Is Helping Finance Executives
Developing and Executing Growth Strategy
■■ Reorient yourself as a strategic advisor.
■■ Create a process that forces choice.
■■ Embrace risk as a core element of business performance management.
■■ Manage the strategy, not the business.
Improving Business Performance Management
■■ Build an integrated business performance management approach to drive outcomes
and action.
■■ Select metrics and build dashboards that link to value drivers.
Building Effective Business Partnering and Analytics
■■ Focus FP&A activities on providing insight that challenges outdated business
assumptions.
Streamlining Budgeting and Forecasting
■■ Increase process efficiency in budgeting and forecasting activities.
■■ Focus on improving management reporting, operating reviews, and other business
insight–focused processes.
Driving the Maturity of FP&A
■■ Develop a roadmap for the FP&A function that balances process improvement
efficiency and increases analytical acumen to drive growth decisions.
15. 15
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Today’s fast-paced, unpredictable,
and highly networked business
environment places a premium on
flexibility and collaboration at every
level of the organization. Leaders
need to adapt quickly to this
changing environment and prepare
their teams to work as a cohesive
unit while also driving individual
performance. Unfortunately, many
leaders have not evolved with the
times, and as a result more than 30%
of organizations would replace senior
leadership team members if given
the opportunity.
Human resources
To find out more about CEB HR Leadership Council for Midsized Companies, click here.
Averageper-
Employee
HealthCare
Cost
Averageper-
EmployeeTotal
Compensation
Employee
Engagement
Unwanted
Turnover
Averageper-
Employee
Training
Spend
TotalHiring
Volume
HRBudget
Percent Difference of Companies Expecting Increases Over Decreases
in Each Area
Source: CEB 2013 Middle Market Executive Confidence Index.
0%
40%
80%
0%
40%
80%
63%
40%
73%
53% 53%
60%
56%
■■ Employees reporting to
managers who are effective at
manager-led development have
25% higher performance levels,
are 29% more committed, and
are 40% more likely to stay with
their organization.
■■ Great Global Leaders:
– Are three times more likely to
hit three-year performance
goals
– Lead teams that have 12%
higher levels of discretionary
effort
– Have 13% lower risk of attrition
than average leaders
■■ Business leaders believe that
just 35% of organizations are
effective at talent management.
■■ “Building a culture of innovation”
is a priority for 54% of senior
RD executives.
The Top Four Areas in Which CEB Is Helping HR Executives
Measuring and Improving Employee Engagement
■■ Provide employees with compelling, non-linear career paths that broaden
development experiences and prepare them for multiple leadership roles.
Improving Manager Capabilities
■■ Enable managers to coach their teams in the moment with tactical discussion guides
and reference materials.
Helping Employees Collaborate Effectively
■■ Effective peer-to-peer collaboration can raise engagement levels by up to 66%; train
your employees to use and contribute to their network.
Driving Functional Efficiency
■■ Benchmark your HR staffing, HRIT, and subfunctional expenses against peers’ to
allocate resources effectively and make the case for targeted investments.
16. 16
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Information TechnologyThe ideal skillset of an IT employee
is changing fast. Traditional IT roles
such as software developer or system
administrator are diminishing in
importance, and new roles—focused
on helping the business easily
find and analyze information—are
emerging. But most IT functions are
unprepared for this shift: only 20%
have training in place to develop
new-to-world IT skills. Progressive
IT functions develop a long-term
strategic workforce plan and
create training and development
opportunities that prepare IT staff for
the function’s future.
Percent Difference of Companies Expecting Increases Over Decreases
in Each Area
Source: CEB 2013 Middle Market Executive Confidence Index.
To find out more about CEB IT Leadership Council for Midsized Companies, click here.
0%
20%
40%
0%
20%
40%
31%
33%
31%
35% 35%
Discretionary
IT–Related
Capex
IT Hardware
Expenditure
IT Software
Expenditure
IT–Related
Consultant
Advisory
Spend
IT Maintenance
Expenditure
■■ Seventy-six percent of
employees report a significant
increase in time spent working
with data and information.
■■ Sixty percent report exchanging
information with 10 or more
people on a day-to-day basis.
■■ Sixty-one percent of employees
do not believe the support they
receive from IT enables them to
be fully productive.
■■ Only one in five global IT leaders
is effective at delivering value to
the organization.
The Top Five Areas in Which CEB Is Helping IT Executives
Building a Strategic Workforce Plan
■■ Understand changing IT talent needs.
■■ Develop a plan to fill critical skills gaps.
Identifying and Developing Next Generation IT Talent
■■ Provide learning opportunities that accelerate the development of next generation
IT leaders.
Developing Business Engagement Skills
■■ Structure your workforce to prioritize business engagement over technical
proficiency.
Supporting Knowledge Work
■■ Equip teams within and beyond the IT organization to collaborate, work globally, and
generate insight from data.
Creating Strategic Roadmaps
■■ Align your IT strategic plan with business strategy.
■■ Embed review triggers in strategic plans to improve flexibility.
■■ Cascade strategic goals across the IT organization.
17. 17
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LEGAL
The Top Five Areas in Which CEB Is Helping Legal Executives
Across midsized companies, the
general counsel role continues to
expand to encompass not only more
traditional legal and compliance
issues but also more cross-functional
priorities such as a culture of
integrity, ethical leadership, and
enterprise risk management.
To find out more about CEB Legal Leadership Council for Midsized Companies, click here.
■■ Seventy-four percent of general
counsel want to spend more
time executing their legal
department’s strategy to support
business goals and less time
firefighting and responding
to business requests for legal
advice or questions.
■■ More than 70% of legal
departments spend one-third or
more of their time reviewing and
managing contracts. However,
despite devoting substantial
resources to contract review,
more than two-thirds of legal
departments are not reviewing
the appropriate number of
contracts.
■■ The average midsized company’s
total legal spend is 0.71% of
revenue, down by nearly 4%
from 2011. Although budgets
continue to increase, budget
growth rate (for both internal
and outside counsel spending)
will decline in 2014. Interestingly,
legal departments in midsized
companies are seeing increased
appetite for legal technology
investments.
Developing and Improving Your Compliance and Ethics Program
■■ Build a coordinated, risk-based program that meets internal and external expectations
for a formal and effective compliance and ethics program.
Building a Culture of Integrity and Ethical Leadership
■■ Understand the effect of corporate culture on compliance risk and business
performance, and proactively detect and mitigate risk by creating a values-based
culture of integrity.
Identifying, Assessing, and Managing Enterprise-Level Risks
■■ Formalize your risk assessment structure and process to assess, prioritize, and
manage key corporate risks according to their likelihood, impact, and velocity.
Tailoring Legal Resourcing and Service Delivery to
Business Risks and Needs
■■ Understand business partner needs and expectations.
■■ Rationalize redundant or wasted effort.
■■ Align legal services to business goals and risks.
Accelerating Commercial Contracting Processes
■■ Improve consistency and speed by selectively involving Legal where it can most
impact risk and by simplifying agreements and processes for faster deal making.
18. 18
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0%
35%
70%
0%
35%
70%
41%
21%
62%
Marketing Budget
per Revenue
Dedicated Advertising
Agency Employees
Customer
Loyalty
MARKETINGWhen it comes to differentiation,
the best marketers recognize the
limitations of business value and
product- and benefit-focused
marketing tactics. Not only do
customers find business value claims
hard to distinguish, but also such
claims fail to appeal to customers’
need for personal value. Indeed,
personal value has a much greater
effect on purchase and willingness to
pay a premium than does business
value.
Percent Difference of Companies Expecting Increases Over Decreases
in Each Area
■■ B2B buyers are even more
emotionally connected to
suppliers than B2C buyers.
■■ B2B brands that establish an
emotional connection with
buyers based on personal
value enjoy three times the
purchase intent and eight times
the willingness to pay a price
premium over the competition.
To find out more about CEB Marketing Leadership Council for Midsized Companies,
click here.
The Top Five Areas in Which CEB Is Helping Marketing Executives
Source: CEB 2013 Middle Market Executive Confidence Index.
Winning the Consensus Deal
■■ Create content and messaging that appeals to diverse stakeholders’ common needs
through new approaches to listening, content creation, and sales enablement.
Preparing for the Future of Marketing
■■ Take a step back and reevaluate how Marketing creates economic value in the first
place, refocusing on how to make and deliver what consumers want and enabling
consumer networks to participate across the entire value chain—from need discovery
to offer design to distribution to demand gen to service.
Making Smart Digital Marketing Decisions
■■ Seek peer-based, vendor-free insight on adoption plans, benefits, and risks for the
many different technologies out there.
■■ Place the right technology bets.
■■ Carefully evaluate risk.
■■ Prioritize investments, and most importantly, think through how different technologies
will help in achieving critical marketing objectives.
Understanding Customer Buying Behavior
■■ Tailor to distinct customer purchase needs and use key channels to build deal
momentum to push customers through the purchase funnel.
Reshaping Customer Buying Criteria
■■ Use content to teach customers something new about their own business, help them
set decision criteria, and motivate them to take immediate action.
19. 19
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Rethinking Performance Management
© 2014 CEB. All rights reserved. CEB7938313SYN
Capital
Expenditures
CoreInput
Prices
Introduction
New
Products
NewOrders
RD
Budget
Total
Inventory
Production
LaborCosts
SupplyChain
Disruption
Risk
Capacity
OPERATIONS
■■ Only 35% of executives believe
their SOP process is even
somewhat effective.
■■ Each year, the average company
spends 25% of the value of its
inventory just to hold it.
■■ Only 37% feel that Operations’
KPIs align with overall corporate
objectives.
■■ Functions that have a higher
proficiency with metrics drive
performance by 24%.
The Top Five Areas in Which CEB Is Helping Operations Executives
Operations executives are focused
on finding and strategically aligning
operations to support growth.
Leading companies are fine-tuning
processes for efficiency, rethinking
design, and working closely with
Sales to manage inventory and drive
expansion.
Percent Difference of Companies Expecting Increases Over Decreases
in Each Area
Source: CEB 2013 Middle Market Executive Confidence Index.
To find out more about CEB Operations Leadership Council for Midsized Companies,
click here.
0%
40%
80%
0%
40%
80%
47% 46%
60%
47%
32%
76% 76% 76%
52%
40%
Optimizing Sales and Operations Planning
■■ Communicate the value of a standard, global planning approach.
■■ Clearly align stakeholder roles and responsibilities back to measurable planning
activities, and implement a repeatable framework that balances enterprise
standardization with local flexibility.
Ensuring Strategic Alignment
■■ Evaluate business assumptions, assess customer strategies, and communicate desired
strategic position internally and externally.
Revamping Inventory Management
■■ Complement standard processes with decision-support frameworks to manage the
complex trade-offs that help optimize the inventory placement within the
supply chain.
Increasing Metric Focus
■■ Clearly link Operations’ metrics back to corporate and customer objectives,
evaluate and filter metrics’ key performance drivers, and build living scorecards and
dashboards tailored to day-to-day decision making.
Transforming the Procurement Function
■■ Create balanced, mature project portfolios that include initiatives to drive cost
structure transformation and product and brand enhancement and are driven by
three core functional capabilities: idea quality, execution ability, and selling ability.
20. 20
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Rethinking Performance Management
© 2014 CEB. All rights reserved. CEB7938313SYN
0%
45%
90%
89%
74%
30%
37%
59%
SALES
Sales New
Customers
Sales
Existing
Customers
Average
Sales Cycle
Reliance
Discounts
Incentives
Sales Head
Count
The best organizations focus on
building a sales culture that allows
for higher performance and retention
levels and the ability to attract top
talent. Companies have widely
adopted the Challenger™ sales model
and are now actively working to
upgrade their team’s ability to drive
customer behavior through insight.
Percent Difference of Companies Expecting Increases Over Decreases
in Each Area
Source: CEB 2013 Middle Market Executive Confidence Index.
The Top Five Areas in Which CEB Is Helping Sales Executives
■■ Customers are delaying contact
with suppliers until they
complete nearly 60% of their
purchase process.
■■ Purely rational appeals to
customers have limited impact
on individuals and decision-
making groups.
■■ Leading reps are using
emotionally oriented appeals
to influence buyers to advocate
on their behalf at customer
organizations and move deals
forward.
To find out more about CEB Sales Leadership Council for Midsized Companies, click here.
Influencing the Sophisticated Buyer
■■ Enable sales teams to better access and influence today’s B2B decision-making
groups.
Driving Sales Transformation
■■ Teach reps to sell to an empowered customer who is capable of learning what to do
on their own.
Getting in Early and Shaping Demand
■■ Shape demand by teaching customers where they learn by executing four critical
pre-funnel selling activities.
Building an Insight-Selling Organization
■■ Enable your teams to replicate Challenger behavior through different-in-kind
messaging, talent development, and sales process.
Partnering with Marketing to Move Up the Decision Chain
■■ Help reps reduce cold-calling time by generating leads using social media.