Want to get a feel for what corporate CEOs will want to do well in 2009? Read on…
The Corporate Executive Board recently published a list of what they call 2009 Imperatives. These are things that companies must do well in 2009. The list of imperatives was developed from hundreds of interviews with executive teams to review their plans and budgets. The insights that surfaced from those interviews along with some additional research and insights resulted in the list of 2009 Imperatives. Follow the hotlinks for more information on each of the imperatives.
- Improve Cost Discipline: Reduce Cost of Goods Sold and Capital Use, not General & Administrative Spending. Focus on Cost of Goods Sold rather than General & Administrative expenses to achieve long-term cost discipline. Incorporate capital costs into SKU reduction efforts.
- Protect Growth Initiatives: Elevate, consolidate, and protect innovation funding. Name and protect explicit growth bets in the capital budget. Incorporate concrete innovation targets into performance expectations and reporting, even amidst belt-tightening.
- Leverage Financial Strengths: Re-envision your value chain as a capital and pricing chain. Foster innovations that target the shifting financial strength of customers and suppliers. Use the crisis to price for the true value of intangibles that customers under-appreciate.
- Exploit Risk Opportunities: Embrace, don’t eradicate, the right risk exposures. Harmonize executive risk tolerances and pursue those you are uniquely positioned to manage. Evaluate your contract portfolios with an eye toward renegotiating past (and changing future) contract terms. Robustly manage fraud risks by identifying and punishing incidents of misconduct early in the down cycle.
- Make Critical Talent Plays: Use today’s crisis to court & cultivate tomorrow’s winners. Seize the opportunity to close critical skill gaps with “not-in-play” talent. Reward relative outperformance (even if you must court the wrath of executive-pay watchdogs). Use the economic crisis to sharpen the acumen of future executives. Re-brand the employment value proposition to recoup productivity losses from suddenly disengaged talent. Embrace offshore centers as a source for critical skills and next-generation executive leadership, not just low-cost execution.
The 2009 Imperatives are part of a larger deliverable from the CEB called Executive Guidance for 2009 which will be released next week….so look for a potential future blog entry to provide you with the details on that.