Management Tools and Trends 2009

Author: Darrell Rigby Co-author: Barbara Bilodeau

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.

• In 1993, Bain launched a multi-year research project to get the facts about management tools and trends. Our objective is two-fold:
- To provide managers with information they need to identify and integrate tools that will improve bottom-line results - To understand how global executives view their strategic challenges and priorities

• Over the past 16 years, we have completed 12 surveys, assembling a database that now includes 9,933 respondents from more than 70 countries in North America, Europe, Asia, Africa, the Middle East and Latin America • This year, we received 1430 completed surveys from a broad range of international executives. We also conducted personal follow-up interviews to further probe the circumstances under which tools are most likely to produce desired results

12 surveys, 9,933 respondents covering a 16-year span

100% 80 60 40

9,933
Other

1,430

Latin America Asia-Pacific Latin America

EMEA

Asia-Pacific EMEA

20 0

North America North America 1993-2007 2009
1

An Executive’s Guide iSurveys were conducted online in partnership with iThe survey is reprinted in the appendix at the back of this report . a tool had to be: . To qualify for inclusion. listed on the slide below.iThis year. we focused on 25 of the most popular tools and techniques.Measurable iWe defined these tools in a booklet titled Management Tools 2009.Topical (as evidenced by coverage in the business press) .Relevant to senior management .

We focused on 25 of the most popular tools iBalanced Scorecard iBenchmarking iBusiness Process Reengineering iCollaborative Innovation iCore Competencies iCustomer Relationship Management iCustomer Segmentation iDecision Rights Tools* iDownsizing* iGrowth Strategy Tools iKnowledge Management iLean Six Sigma * Tool added to the survey in 2009 iLoyalty Management Tools iMergers and Acquisitions iMission and Vision Statements iOnline Communities* iOutsourcing iPrice Optimization Models* iScenario & Contingency Planning iShared Service Centers iStrategic Alliances iStrategic Planning iSupply Chain Management iTotal Quality Management iVoice of the Customer Innovation* 2 .

iGlobal respondents represent a full range of industries and company sizes iWith results of 9. we have created the world’s most comprehensive and definitive fact base on management tools and trends .933 surveys and more than 300 personal interviews in our database.

Distribution& Logistics Healthcare Chemicals & Metal Utilities& Energy Pharma & Biotech 100 Other 80 Food & Beverage Transport & Tourism Consumer Products $2B+ Construction & Real Estate 60 Media & Entertainment Retail Services 40 Manufacturing Financial Services Tech & Telecomm 0 Industry <600MM $600MM .Global respondents represent the full range of industries and company sizes Demographics of 2009 global respondents 100% 100 Don't Know/Unknown Wholesale.<$2B 20 Corporate sales 3 .

iCompany sizes are similar across all regions. with Latin American companies slightly smaller .

Company size was similar in each region Percent of respondents 100 100% 80 60 40 20 0 $600m to <$2B <$600M North America 100 100 100 $2B+ EMEA Asia-Pacific Latin America 4 .

six of ten believe they could dramatically boost innovation by collaborating with other companies” and half say “their entire organization is actively engaged in improving innovation” . despite the fact that half of executives believe “we should focus more on revenue growth and less on cost reduction” • Long-term success will include the need to adapt as executives believe current conditions will have long-term impact .Only one quarter of executives believe “today’s market leaders will still be leaders five years from now” • Innovation continues to be very important – and difficult .Thirty-six percent of executives say their organization will have significant layoffs.Almost eight of ten executives agree “our company will use this recession to improve our competitive position” • Despite this long-term optimism. and “insufficient customer insight is hurting our performance” . but optimistic about the longterm .Seven of ten executives believe “government regulation of business will increase over the next five years” and that “the current downturn will change consumer behaviors for at least three years” .Half of executives believe “unclear decision making is hurting our performance”. many executives have concerns about how they are currently being operated . This. Six of ten organizations either downsized in 2008 and/or are likely to in 2009.Eight of ten executives agree that “Innovation is more important than cost reduction for long-term success”.Collaborative Innovation and Voice of the Customer Innovation are two of the five tools that show the largest likely increase in usage from 2008 to 2009 . not long-term strategies” • The short-term pain will include many layoffs .This year’s trends analysis highlights: i Executives are concerned about the short-term.Four of ten believe “our decisions are being driven by short-term financials.Seven of ten are “very concerned about how they will meet growth targets in 2009” and six of ten are “planning for a downturn that will last at least until early 2010” .

The view on management trends Agree Culture is as important as strategy for business success Innovation is more important than cost reduction for long-term success Our company will use this recession to improve our competitive position Government regulation of business will increase over the next five years The current downturn will change consumer behaviors for at least three years I am very concerned about how we will meet growth targets in 2009 International growth will be vital to our performance over the next five years We are planning for a downturn that will last at least until early 2010 We could dramatically boost innovation by collaborating with other companies We should focus more on revenue growth and less on cost reductions Our entire organization is actively engaged in improving innovation Unclear decision making authority is hurting our performance Insufficient customer insight is hurting our performance Our decisions are being driven by short-term financials. not long-term strategies We will pursue sustainability initiatives even if they hurt our profits Our top executives are comfortable taking higher risks for potentially higher returns Other emerging markets now offer better opportunities than China and India Our company will have significant layoffs in 2009 Our company waited too long to respond to this economic downturn Almost all of today’s market leaders will still be leaders five years from now 88% 76% 75% 71% 71% 70% 66% 64% 58% 53% 52% 50% 46% 44% 44% 40% 38% 36% 25% 24% Disagree 4% 13% 9% 11% 17% 15% 19% 20% 16% 30% 25% 33% 34% 43% 31% 41% 26% 44% 59% 58% 5 .

European executives are: 8Less concerned with meeting their growth targets in 2009 8More critical of many aspects of firm management as they are more likely to agree that “unclear decision making is hurting our performance”. “insufficient consumer insight is hurting our performance” and “our decisions are driven by short-term financials.Latin American executives are: 8By far most concerned with meeting growth targets in 2009.iSome of these attitudes vary by region .Asian executives are: 8More focused on the need for innovation as they agree more with “innovation is more important than cost reduction for long-term success” and “we could dramatically boost innovation by collaborating with other companies” 8Less concerned with meeting growth targets in 2009. perhaps explaining why they are least likely to have significant layoffs in 2009 8Most in agreement that their organization waited too long to respond to the downturn 8Most in need of international markets for growth over the next five years . 8More likely to feel “international growth will be vital to our performance over the next five years” . but most confident that their organizations will use the downturn to improve their competitive position 8More confident about their firm management .North American executives are: 8More likely to believe that “government regulation of business will increase over the next five years” 8Less likely to believe that “innovation is more important than cost reduction for long-term success” 8Less concerned with international growth and less likely to believe that other emerging markets offer better opportunities than China and India 8Less likely to pursue sustainability initiatives if they hurt profits . not long term strategies.

Attitudes vary by region N. not long-term strategies • We will pursue sustainability initiatives even if they hurt our profits • Other emerging markets now offer better opportunities than China and India • Our company will have significant layoffs in 2009 • Our company waited too long to respond to this economic downturn • Almost all of today’s market leaders will still be leaders five years from now Significantly higher than executives not in that region Significantly lower than executives not in that region 86% 67% 69% 77% 73% 69% 55% 67% 57% 54% 55% 48% 45% 48% 37% 28% 38% 27% 24% Europe 86% 75% 72% 70% 66% 60% 75% 62% 55% 50% 52% 56% 54% 50% 44% 32% 38% 36% 21% 27% Asia 90% 84% 74% 68% 71% 62% 82% 63% 66% 55% 53% 55% 53% 46% 46% 36% 26%* 31% 31% 23% L. • Culture is as important as strategy for business success • Innovation is more important than cost reduction for long-term success • Our company will use this recession to improve our competitive position • Government regulation of business will increase over the next five years • The current downturn will change consumer behaviors for at least three years • I am very concerned about how we will meet growth targets in 2009 • International growth will be vital to our performance over the next five years • We are planning for a downturn that will last at least until early 2010 • We could dramatically boost innovation by collaborating with other companies • We should focus more on revenue growth and less on cost reductions • Our entire organization is actively engaged in improving innovation • Unclear decision making authority is hurting our performance • Insufficient customer insight is hurting our performance • Our decisions are driven by short-term financials. Amer.Amer. 89% 78% 80% 70% 71% 81% 58% 65% 57% 53% 51% 46% 38% 38% 45% 45% 51% 38% 22% 24% • Our executives are comfortable taking higher risks for potentially higher returns 40% *34% when exclude China and India 6 .

They are 8 Less likely to be planning for an economic downturn that will last until 2010 8 More confident they will use the recession to improve their competitive position 8 Less likely to feel their decisions are being driven by short-term financials rather than long-term strategies 8 Far less likely to feel they will have significant layoffs in 2009 8 Less critical of their firm management 8 More focused on innovation .Chinese firms are more likely to 8 Believe that unclear decision making authority is hurting their performance and that their organization waited too long to respond to the economic downturn 8 Think their firm will have significant layoffs in 2009 -Indian executives seem to be more confident and optimistic. there are several clear differences between Chinese and Indian companies .iWithin Asia-Pacific.

Indian executives appear more optimistic than their Asian counterparts China • Culture is as important as strategy for business success • Innovation is more important than cost reduction for long-term success • Our company will use this recession to improve our competitive position • Government regulation of business will increase over the next five years • The current downturn will change consumer behaviors for at least three years • I am very concerned about how we will meet growth targets in 2009 • International growth will be vital to our performance over the next five years • We are planning for a downturn that will last at least until early 2010 • We could dramatically boost innovation by collaborating with other companies • We should focus more on revenue growth and less on cost reductions • Our entire organization is actively engaged in improving innovation • Unclear decision making authority is hurting our performance • Insufficient customer insight is hurting our performance • Our decisions are driven by short-term financials. not long-term strategies • We will pursue sustainability initiatives even if they hurt our profits • Other emerging markets now offer better opportunities than China and India • Our company will have significant layoffs in 2009 • Our company waited too long to respond to this economic downturn • Almost all of today’s market leaders will still be leaders five years from now Significantly higher than executives not in that country Significantly lower than executives not in that country 86% 85% 70% 69% 72% 69% 88% 70% 62% 54% 44% 63% 61% 54% 47% 24% 40% 40% 27% India 95% 89% 80% 67% 64% 62% 72% 56% 72% 53% 63% 49% 43% 38% 49% 40% 22% 23% 22% 23% Other A-P 88% 72% 70% 67% 82% 54% 93% 67% 58% 61% 45% 54% 61% 49% 40% 31% 34% 33% 34% 18% • Our executives are comfortable taking higher risks for potentially higher returns 34% 7 .

Israel. Taiwan. China. Philippines. Pakistan. Jordan. Czech Republic. not long-term strategies 8Believe insufficient customer insight is hurting their performance Note: Emerging markets defined as those who are part of the MSCI Emerging Markets IndexSM. Brazil. Chile. Thailand and Turkey . South Africa. Indonesia. Mexico. India. Russia. Korea. established markets to understand how their attitudes and behavior differ .Companies from emerging markets are more likely to 8Believe innovation is more important than cost reduction for long-term success 8Feel their organization will use the recession to improve their competitive position 8Be concerned with meeting growth targets in 2009 -Companies from established markets are more likely to 8Believe government regulation of business will increase over the next five years 8Believe international growth will be vital over the next five years 8Feel their decisions are being driven by short-term financials. Hungary.iWe divided the companies into emerging vs. Malaysia. As of June 2006 the index consisted of the following 25 emerging market country indices: Argentina. Egypt. Peru. Columbia. Morocco. Poland.

not long-term strategies • We will pursue sustainability initiatives even if they hour our profits • Our top executives are comfortable taking higher risks for potentially higher returns • Other emerging markets now offer better opportunities than China and India • Our company will have significant layoffs in 2009 • Our company waited too long to respond to this economic downturn • Almost all of today’s market leaders will still be leaders five years from now Established Emerging 87% 89% 70% 70% 74% 71% 63% 69% 65% 57% 53% 53% 52% 50% 49% 41% 36% 33% 36% 25% 24% 81% 79% 68% 71% 76% 64% 64% 59% 53% 52% 49% 43% 40% 46% 42% 43% 36% 24% 25% Significantly higher than companies not in that market type 8 .Agreement level varies by market type • Culture is as important as strategy for business success • Innovation is more important than cost reduction for long-term success • Our company will use this recession to improve our competitive position • Government regulation of business will increase over the next five years • The current downturn will change consumer behaviors for at least three years • I am very concerned about how we will meet growth targets in 2009 • International growth will be vital to our performance over the next five years • We are planning for a downturn that will last at least until early 2010 • We could dramatically boost innovation by collaborating with other companies • We should focus more on revenue growth and less on cost reductions • Our entire organization is actively engaged in improving innovation • Unclear decision making authority is hurting our performance • Insufficient customer insight is hurting our performance • Our decisions are being driven by short-term financials.

Their top executives are comfortable taking higher risks for potentially higher returns . Executives at large companies ($2B+ revenue) are more likely to feel Government regulation of business will increase over the next five years The current downturn will change consumer behaviors for at least 3 years International growth will be vital to their performance over the next 5 years The downturn will last until at least 2010 Their company will have significant layoffs in 2009 • Large company executives are less likely to feel .They should focus more on revenue growth and less on cost reduction .• Attitudes also vary by company size.Innovation is more important than cost reduction for long-term success .

not long-term strategies • We will pursue sustainability initiatives even if they hurt our profits • Other emerging markets now offer better opportunities than China and India • Our company will have significant layoffs in 2009 • Our company waited too long to respond to this economic downturn • Almost all of today’s market leaders will still be leaders five years from now 89% 73% 74% 74% 75% 68% 73% 69% 57% 50% 54% 50% 47% 46% 43% 39% 41% 25% 25% Medium 88% 80% 77% 71% 69% 72% 60% 66% 60% 55% 49% 48% 45% 41% 44% 43% 42% 30% 22% 25% Small 88% 79% 79% 64% 66% 72% 57% 58% 56% 56% 51% 50% 45% 44% 46% 44% 36% 31% 24% 23% • Our executives are comfortable taking higher risks for potentially higher returns 37% Significantly higher than executives in other sized companies Significantly lower than executives in other sized companies 9 .Large company executives are less positive than executives in smaller firms Large • Culture is as important as strategy for business success • Innovation is more important than cost reduction for long-term success • Our company will use this recession to improve our competitive position • Government regulation of business will increase over the next five years • The current downturn will change consumer behaviors for at least three years • I am very concerned about how we will meet growth targets in 2009 • International growth will be vital to our performance over the next five years • We are planning for a downturn that will last at least until early 2010 • We could dramatically boost innovation by collaborating with other companies • We should focus more on revenue growth and less on cost reductions • Our entire organization is actively engaged in improving innovation • Unclear decision making authority is hurting our performance • Insufficient customer insight is hurting our performance • Our decisions are driven by short-term financials.

i We asked executives how satisfied they were with their organization’s financial results.They are less focused on innovation and taking risks. Significantly fewer of them agree with: 8 Innovation is more important than cost reduction for long-term success 8 Our entire organization is engaged in improving innovation 8 Our top executives are comfortable taking higher risks for potentially higher returns . as more of their executives believe 8 Unclear decision making authority is hurting our performance 8 Insufficient customer insight is hurting our performance 8 Our decisions are being driven by short-term financials.They are more concerned with how their organization is currently being operated. Executives that were not satisfied with their financial results demonstrated differences in three key areas . not long-term strategies 8 Our company waited too long to respond to the economic downturn . Significantly more of them agree with: 8 I am very concerned about how we will meet our growth targets in 2009 8 We are planning for a downturn that will last at least until early 2010 8 Our company will have significant layoffs in 2009 .They are also less likely to feel confident that the situation is going to improve for their firm.

“Somewhat Dissatisfied” or“Neither” with their firm’s financial results. not long-term strategies • We will pursue sustainability initiatives even if they hour our profits • Our top executives are comfortable taking higher risks for potentially higher returns • Other emerging markets now offer better opportunities than China and India • Our company will have significant layoffs in 2009 • Our company waited too long to respond to this economic downturn • Almost all of today’s market leaders will still be leaders five years from now Significantly higher than companies not in that group “Not Satisfied” – indicated they were “Extremely Dissatisfied”.Agreement level varies by satisfaction with Financial Results Not satisfied Satisfied • Culture is as important as strategy for business success • Innovation is more important than cost reduction for long-term success • Our company will use this recession to improve our competitive position • Government regulation of business will increase over the next five years • The current downturn will change consumer behaviors for at least three years • I am very concerned about how we will meet growth targets in 2009 • International growth will be vital to our performance over the next five years • We are planning for a downturn that will last at least until early 2010 • We could dramatically boost innovation by collaborating with other companies • We should focus more on revenue growth and less on cost reductions • Our entire organization is actively engaged in improving innovation • Unclear decision making authority is hurting our performance • Insufficient customer insight is hurting our performance • Our decisions are being driven by short-term financials. “Satisfied” – Executives who are “Extremely Satisfied” or “Somewhat Satisfied” 10 85% 71% 68% 69% 72% 81% 63% 68% 58% 52% 43% 59% 53% 56% 37% 33% 35% 50% 36% 20% 89% 79% 79% 72% 70% 65% 68% 63% 58% 54% 57% 45% 42% 37% 48% 43% 40% 28% 18% 27% .

• Tool usage declined worldwide -An average of 11 tools were used in 2008. down from 15 in 2006 -This number is much closer to what we saw in the pre-crash years of 1999 and 2000 .

8 12.2 12.4 Mean = 12.Tool usage declined in 2008 Average number of tools used 20 16.7 15 11.3 13.6 10.3 10.1 11.6 13.9 13.4 10.1 15.6 10 5 0 1993 1994 1995 1996 1997 1998 1999 2000 2002 2004 2006 2008 11 .

iAs we have found every year. while large companies decreased usage greatly from past years . larger companies use more tools iThis year we found that both medium and small companies usage rates went back to their 2000 levels.

7 10 10 10 9.1 15.2 15 13.Larger firms use more management tools Large companies ($2b+)* 20 17.2 Medium companies ($600M .4 16.3 10.<$2B)* 20 Small companies (<$600M)* 20 16.2 5 5 5 2000 2002 2004 2006 2000 2002 2004 2006 2008 2008 2000 2002 2004 2006 *Based on annual revenues 2008 12 0 0 0 .9 15 14.3 11.8 16.2 14.6 15 15.2 9.6 11.1 11.

iNumber of tools used were similar across regions. with slightly higher usage in North America iUsage in all regions declined from 2006 .

2 10.4 10.5 10.Number of tools used is similar across the globe Average number of tools used in 2008 20 15 10 5 0 Respondents: 2006 Average 11.4 North America Latin America Europe Asia 283 550 303 294 13 .

Food and Beverage .Pharma and Biotech .Consumer Products .Construction and Real Estate .•The number of tools used varies by industry -Heaviest users are: .Chemicals and Metals .Utilities and Energy .Financial Services .Retail .Lightest users are: .

Average number of tools used in 2008

Tool usage varies by industry

Respondents
C on su m er

10

15

0

5

12.5

52
12.3

45
11.6

50
11.6

43
11.3

50
11.2

247
10.8

191 41
io n & Lo g is tic s

Pr od Ph uc ar ts m a & B io Fo te od ch & B Ch ev er em a ge ic al s Tr & an M sp et al or s t & T ou Te ri ch sm & Te le co m M m an u fa ct u W ri ho ng le sa H ea le , D lth is tr ca ib re ut

10.7

10.7

39
M ed ia & En S

er vi ce s

9.9

116 67
C

9.9

on st ru ct io n

te rt ai Fi n na m en nc ia t lS er vi cc es

9.7

236 70 57 45
14

& U

9.7

R

ea lE ti l it ie s &

Re ta i st a

l te En er gy

9.6 9.4

• Benchmarking passed Strategic Planning as the most used tool
-Strategic Planning had been the most used tool every year since 1997

• Some tools stand out as winners and losers
-While no tool is right for everyone, Strategic Planning, Customer Segmentation and Mission and Vision Statements are all above average in both usage and satisfaction -On the flip side, Online Communities, Downsizing, and Collaborative Innovation are all below average on both usage and satisfaction

Usage and satisfaction rates in 2008
Usage
Benchmarking Strategic Planning Mission and Vision Statements Customer Relationship Management Outsourcing Balanced Scorecard Customer Segmentation Business Process Reengineering Core Competencies Mergers and Acquisitions Strategic Alliances Supply Chain Management Scenario and Contingency Planning Knowledge Management Shared Service Centers Growth Strategy Tools Total Quality Management Downsizing Lean Six Sigma Voice of the Customer Innovation Online Communities Collaborative Innovation Price Optimization Models Loyalty Management Tools Decision Rights Tools 76%* 67%* 65%* 63%* 63%* 53%* 53%* 50%* 48%* 46%* 44% 43% 42% 41% 41% 38%** 34%** 34%** 31%** 27%** 26%** 24%** 24%** 17%** 10%**

Satisfaction
3.82 4.01* 3.91* 3.83 3.79 3.83 3.95* 3.85 3.82 3.83 3.82 3.81 3.83 3.66** 3.68** 3.87 3.80 3.59** 3.87 3.88 3.69** 3.71** 3.75 3.79 3.68
15

*Significantly above the overall mean **Significantly below the overall mean (usage = 42%, satisfaction = 3.82)

The top 10 tools were similar across the regions .Scenario and Contingency Planning and Growth Strategy Tools are used more heavily in Latin America .• We identified the top 10 tools globally and by region .Benchmarking is the most used tool in three regions. second most used in Asia-Pacific .Downsizing and Strategic Alliances are more widely used in North America .

Top 10 most used tools
Global Benchmarking Strategic Planning Mission and Vision Statements Customer Relationship Management Outsourcing Balanced Scorecard Customer Segmentation Business Process Reengineering Core Competencies Mergers and Acquisitions Downsizing Strategic Alliances Supply Chain Management Knowledge Management Scenario and Contingency Planning Growth Strategy Tools
Note: (t) = tied

North America Europe 1 2 3 4 5 10(t) 10(t) 7 6 10(t) 8(t) 8(t) 1 5(t) 3 2 5(t) 7 4 9 11(t) 8 10 -

Asia 2 5 4 1 3 7 8 10 6 11(t) 9 -

Latin America 1 2 3(t) 6(t) 3(t) 5 6(t) 9(t) 15 13(t) 8 9(t)
16

1 2 3 4(t) 4(t) 6(t) 6(t) 8 9 10 17(t) 11 12 14(t) 13 16

iComparing the top 10 tools over time shows several key points about tool usage
-Certain tools such as Outsourcing are used more heavily in tough economic times -Others such as Benchmarking, Strategic Planning and Mission and Vision Statements are heavily used regardless of the economic cycle

Top 10 tools have varied over time
1993
• Mission & Vision Statements (88%) • Customer Satisfaction (86%) • TQM (72%) • Competitor Profiling (71%) • Benchmarking (70%) • Pay-for-Performance (70%) • Reengineering (67%) • Strategic Alliances (62%) • Cycle Time Reduction (55%) • Self-Directed Teams (55%)

2000
• Strategic Planning* (76%) • Mission & Vision Statements (70%) • Benchmarking (69%) • Outsourcing** (63%) • Customer Satisfaction (60%) • Growth Strategies* (55%) • Strategic Alliances (53%) • Pay-for-Performance (52%) • Customer Segmentation (51%) • Core Competencies (48%)

2006
• Strategic Planning* (88%) • CRM***(84%) • Customer Segmentation (82%) • Benchmarking (81%) • Mission and Vision Statements (79%) • Core Competencies (79%) • Outsourcing** (77%) • Business Process Reengineering (69%) • Scenario and Contingency Planning (69%) • Knowledge Management (69%)

2008
• Benchmarking (76%) • Strategic Planning* (67%) • Mission and Vision Statements (65%) • CRM***(63%) • Outsourcing** (63%) • Balanced Scorecard (53%) • Customer Segmentation (53%) • Business Process Reengineering (50%) • Core Competencies (48%) • Mergers & Acquisitions (46%)

*Tool added in 1996 **Tool added in 1998

***Tool added in 2000

17

• Usage of Strategic Planning is much lower in Europe and Asia-Pacific than in North and Latin America • North American firms are heavier users of many tools across the spectrum .Also above average usage of newer tools such as Online Communities and Collaborative Innovation . Strategic Alliances .Above average usage of long-time tools such as Strategic Planning.Latin American and European firms are less likely to use Core Competencies . Business Process Reengineering.North American firms are also the heaviest Downsizers • Other interesting differences .European firms are least likely to use Strategic Alliances .Latin American firms are most likely to use Scenario and Contingency Planning and Growth Strategy Tools .

Usage rates vary by region N. America • • • • • • • • • • • • • • • • • • • • • • • • • Benchmarking Strategic Planning Mission and Vision Statements Customer Relationship Management Outsourcing Balanced Scorecard Customer Segmentation Business Process Reengineering Core Competencies Mergers and Acquisitions Strategic Alliances Supply Chain Management Scenario and Contingency Planning Knowledge Management Shared Service Centers Growth Strategy Tools Downsizing Total Quality Management Lean Six Sigma Voice of the Customer Innovation Online Communities Collaborative Innovation Price Optimization Models Loyalty Management Tools Decision Rights Tools 75% 73% 70% 69% 61% 49% 49% 58% 60% 49% 51% 38% 37% 45% 38% 31% 51% 30% 33% 28% 35% 34% 25% 17% 11% Europe 79% 56% 63% 68% 56% 54% 57% 49% 44% 53% 38% 47% 38% 43% 44% 26% 34% 33% 34% 24% 25% 24% 25% 16% 11% Asia 67% 58% 61% 70% 62% 52% 51% 46% 56% 45% 45% 45% 33% 50% 39% 33% 35% 37% 31% 32% 26% 22% 22% 18% 9% L. America 79% 74% 67% 53% 67% 56% 53% 50% 39% 41% 43% 43% 51% 34% 41% 50% 25% 36% 28% 26% 21% 21% 23% 17% 9% Use tool significantly more than those not in region Use tool significantly less than those not in region 18 .

with some key differences .iTool usage is similar across Asia-Pacific.Chinese firms use Benchmarking.Fewer Indian firms use Customer Segmentation . Strategic Planning. Supply Chain Management and Total Quality Management more than their counterparts elsewhere in Asia .

Tool usage is similar within Asia-Pacific China Benchmarking Strategic Planning Mission and Vision Statements Customer Relationship Management Outsourcing Balanced Scorecard Customer Segmentation Business Process Reengineering Core Competencies Mergers and Acquisitions Strategic Alliances Supply Chain Management Scenario and Contingency Planning Knowledge Management Shared Service Centers Growth Strategy Tools Downsizing Total Quality Management Lean Six Sigma Voice of the Customer Innovation Online Communities Collaborative Innovation Price Optimization Models Loyalty Management Tools Decision Rights Tools Use tool significantly more than those not in country Use tool significantly less than those not in country 80% 66% 66% 67% 65% 54% 55% 40% 63% 44% 42% 61% 35% 48% 35% 36% 37% 49% 33% 25% 29% 25% 24% 16% 8% India 63% 49% 61% 71% 57% 52% 43% 49% 50% 42% 47% 35% 29% 55% 37% 35% 34% 35% 33% 34% 24% 22% 24% 19% 9% Other A-P 54% 63% 54% 75% 66% 48% 63% 46% 58% 51% 45% 39% 36% 43% 51% 25% 33% 24% 24% 37% 24% 18% 15% 21% 10% 19 .

• Tool Usage differs between Established and Emerging Market firms -Established market firms are more likely to use 8Customer Relationship Management 8Business Process Reengineering 8Core Competencies 8Mergers and Acquisitions 8Downsizing 8Online Communities 8Collaborative Innovation -Four tools are used more in Emerging markets 8Outsourcing 8Scenario and Contingency Planning 8Growth Strategy Tools 8Total Quality Management .

Tool usage varies by market type Established Emerging • • • • • • • • • • • • • • • • • • • • • • • • • Benchmarking Strategic Planning Mission and Vision Statements Customer Relationship Management Outsourcing Balanced Scorecard Customer Segmentation Business Process Reengineering Core Competencies Mergers and Acquisitions Strategic Alliances Supply Chain Management Scenario and Contingency Planning Knowledge Management Shared Service Centers Growth Strategy Tools Downsizing Total Quality Management Lean Six Sigma Voice of the Customer Innovation Online Communities Collaborative Innovation Price Optimization Models Loyalty Management Tools Decision Rights Tools 74% 65% 65% 69% 59% 52% 53% 54% 53% 52% 46% 42% 38% 44% 43% 29% 41% 31% 33% 28% 30% 29% 24% 17% 11% 77% 68% 66% 58% 65% 55% 53% 48% 44% 41% 42% 44% 44% 40% 39% 44% 28% 37% 29% 26% 22% 21% 23% 18% 9% Use tool significantly more than those not in market type 20 .

iA greater percentage of large firms use the majority of the tools .

Large firms use more management tools Large Benchmarking Strategic Planning Mission and Vision Statements Customer Relationship Management Outsourcing Balanced Scorecard Customer Segmentation Business Process Reengineering Core Competencies Mergers and Acquisitions Strategic Alliances Supply Chain Management Scenario and Contingency Planning Knowledge Management Shared Service Centers Growth Strategy Tools Downsizing Total Quality Management Lean Six Sigma Voice of the Customer Innovation Online Communities Collaborative Innovation Price Optimization Models Loyalty Management Tools Decision Rights Tools Significantly higher usage rate than other sized companies Significantly lower usage rate than other sized companies 80% 68% 69% 65% 65% 61% 58% 55% 52% 54% 44% 52% 44% 47% 48% 37% 40% 35% 37% 30% 30% 26% 28% 21% 12% Medium 77% 70% 66% 65% 63% 54% 50% 51% 52% 42% 47% 35% 44% 45% 37% 42% 28% 34% 30% 24% 20% 26% 24% 18% 10% Small 67% 62% 59% 58% 58% 41% 45% 45% 40% 41% 47% 33% 37% 35% 29% 36% 31% 32% 19% 21% 24% 23% 16% 12% 7% 21 .

Scenario and Contingency Planning .Growth Strategy Tools .Voice of the Customer Innovation .Strategic Planning . we can see that organizations who are satisfied with their financial performance use several tools more than those who are not satisfied: .Online Communities .• Although we cannot tell whether using specific tools has had a direct impact on an organization’s financial performance.Benchmarking .Balanced Scorecard .Knowledge Management .Collaborative Innovation • Downsizing was the only tool used more by those not satisfied with their financial performance .

“Somewhat Dissatisfied”. or “Neither” with their firm’s financial results. “Satisfied” – Executives who are “Extremely Satisfied” or “Somewhat Satisfied” 22 .Firms satisfied with Financial Results use several tools more Not Satisfied Satisfied • • • • • • • • • • • • • • • • • • • • • • • • • Benchmarking Strategic Planning Mission and Vision Statements Customer Relationship Management Outsourcing Balanced Scorecard Customer Segmentation Business Process Reengineering Core Competencies Mergers and Acquisitions Strategic Alliances Supply Chain Management Scenario and Contingency Planning Knowledge Management Shared Service Centers Growth Strategy Tools Downsizing Total Quality Management Lean Six Sigma Voice of the Customer Innovation Online Communities Collaborative Innovation Price Optimization Models Loyalty Management Tools Decision Rights Tools 71% 63% 61% 62% 63% 51% 48% 48% 47% 46% 42% 44% 37% 37% 39% 32% 42% 32% 30% 22% 22% 21% 22% 15% 8% 78% 69% 68% 63% 62% 55% 55% 52% 48% 46% 45% 43% 44% 44% 41% 41% 29% 36% 32% 30% 27% 26% 24% 19% 11% Use tool significantly more than those not in group “Not Satisfied” – indicated they were “Extremely Dissatisfied”.

• Six of ten firms either downsized in 2008 and/or will downsize in 2009 • Most firms that downsized in 2008 plan to do further downsizing in 2009 .

430 Will use on major basis Will use on limited basis 80 60 40 Will not use 20 0 Not used at all Limited Basis Major Effort 23 2008 Downsizing Usage .Six of ten firms downsized in 2008 and/or expect to in 2009 Likely 2009 usage of Downsizing 100% 947 245 238 Total = 1.

• The average overall satisfaction rating is 3.75 in 2006 • Satisfaction leaders are -Strategic Planning -Customer Segmentation -Mission and Vision Statements • Tools with below average satisfaction ratings are -Downsizing -Knowledge Management -Shared Service Centers -Decision Rights Tools -Online Communities -Collaborative Innovation • There were few differences in satisfaction across regions . slightly higher than the average of 3.82.

74 3.83 3.90 3.83 3.08 4.87 3.69 3.60 3.64 3.81 3.80 3.91 3.72 3.75 3.93 3.82 *Significantly above/**below the global mean Significantly higher than other regions .82 3.Overall satisfaction scores are similar across regions Global Strategic Planning Customer Segmentation Mission and Vision Statements Voice of the Customer Innovation Growth Strategy Tools Lean Six Sigma Business Process Reengineering Balanced Scorecard Customer Relationship Management Mergers and Acquisitions Scenario and Contingency Planning Benchmarking Core Competencies Strategic Alliances Supply Chain Management Total Quality Management Loyalty Management Tools Outsourcing Price Optimization Models Collaborative Innovation Online Communities Decision Rights Tools Shared Service Centers Knowledge Management Downsizing 4.91 3.88 3.90 3.01 3.90 3.87 3.85 3.82 3.70 3.87 3.92 3.77 3.82 3.90 3.69 3.60 3.75 3.53 Asia 3.71 3.71 3.78 3.91 3.64 3.80 3. 3. Amer. 4.77 3.83 3.88 3.17 4.81 4.49 3.68 3.68** 3.90 3.84 3.93 3.79 3.89 3.71 3.97 3.74 3.79 3.91* 3.81 3.82 3.82 3.72 3.87 3.71 3.82 3.90 3.64 3.75 3.92 3.82 3.55 L.79 3.83 3.01* 3.78 3.95* 3.81 3.65 3.83 3.80 3.94 3. Amer.76 3.64 3.71** 3.61 3.77 3.70 3.83 3.89 3.90 3.56 3.73 3.78 3.93 3.02 3.97 3.56 3.84 3.75 3.66 Significantly lower 24 Global Avg = 3.64 3.59** N.88 3.83 3.83 3.90 3.66 3.77 3.66** 3.72 3.81 3.76 3.76 3.69** 3.33 3.77 3.68** 3.62 3.60 Europe 3.80 3.88 3.96 3.85 3.88 3.87 3.

• Indian firms are more satisfied with four tools than other firms throughout Asia-Pacific -Core Competences -Benchmarking -Strategic Alliances -Collaborative Innovation .

83 3.59 3.79 3.66 3.69 3.00 4.07 3.44 3.77 3.06 3.63 3.77 3.00 3.97 3.95 4.78 3.71 3.90 3.61 India 4.77 3.71 3.69 3.25 3.92 4.78 3.81 4.25 3.92 4.58 3.03 3.57 4.59 4.05 3.83 4.13 3.20 3.56 3.89 3.65 3.72 3.00 4.71 3.75 3.67 3.77 3.00 3.54 3.78 4.71 3.Satisfaction is similar within Asia-Pacific China Strategic Planning Customer Segmentation Mission and Vision Statements Voice of the Customer Innovation Growth Strategy Tools Lean Six Sigma Business Process Reengineering Balanced Scorecard Customer Relationship Management Mergers and Acquisitions Scenario and Contingency Planning Benchmarking Core Competencies Strategic Alliances Supply Chain Management Total Quality Management Loyalty Management Tools Outsourcing Price Optimization Models Collaborative Innovation Online Communities Decision Rights Tools Shared Service Centers Knowledge Management Downsizing Significantly higher than those not in country 3.87 3.05 3.91 3.69 4.58 3.81 3.80 3.73 4.90 4.71 3.68 3.62 3.91 3.71 3.84 3.03 3.61 Other A-P 3.88 3.75 3.63 3.83 3.17 3.05 3.61 3.16 3.32 Significantly lower than those not in country 25 .

• Respondents in Emerging markets are more satisfied with several tools -Strategic planning -Mission and Vision Statements -Growth Strategy Tools -Customer Relationship Management -Total Quality Management -Strategic Alliances • The only tool executives in Established markets are more satisfied with is Collaborative Innovation .

01 3.75 3.90 3.88 3.83 3.78 3.72 3.76 3.82 3.66 3.61 3.95 3.72 3.81 3.58 Emerging 4.66 3.87 3.81 3.81 3.65 3.88 3.77 3.72 3.80 3.68 3.92 3.88 3.61 26 .87 3.73 3.83 3.81 3.90 3.65 3.83 3.97 3.10 4.72 3.Emerging versus Established market satisfaction Established Strategic Planning Customer Segmentation Mission and Vision Statements Voice of the Customer Innovation Growth Strategy Tools Lean Six Sigma Business Process Reengineering Balanced Scorecard Customer Relationship Management Mergers and Acquisitions Scenario and Contingency Planning Benchmarking Core Competencies Strategic Alliances Supply Chain Management Total Quality Management Loyalty Management Tools Outsourcing Price Optimization Models Collaborative Innovation Online Communities Decision Rights Tools Shared Service Centers Knowledge Management Downsizing Significantly higher than those not in market type 3.90 3.74 3.83 3.84 3.89 3.84 3.70 3.90 3.84 3.68 3.65 3.82 3.

iSatisfaction does not significantly differ by company size .

92 3.87 3.82 3.84 3.86 3.87 3.58 3.90 3.84 3.84 3.85 3.65 3.64 3.70 3.86 3.73 3.76 3.01 3.87 3.70 3.84 3.79 3.78 3.92 3.79 3.70 3.88 3.90 3.64 3.80 3.60 Medium 3.80 3.82 3.82 3.75 3.74 3.91 3.82 3.67 3.67 3.83 3.76 3.70 3.88 3.80 3.72 3.99 3.80 3.69 3.69 3.89 3.86 3.62 3.Satisfaction rates are similar regardless of company size Large Strategic Planning Customer Segmentation Mission and Vision Statements Voice of the Customer Innovation Growth Strategy Tools Lean Six Sigma Business Process Reengineering Balanced Scorecard Customer Relationship Management Mergers and Acquisitions Scenario and Contingency Planning Benchmarking Core Competencies Strategic Alliances Supply Chain Management Total Quality Management Loyalty Management Tools Outsourcing Price Optimization Models Collaborative Innovation Online Communities Decision Rights Tools Shared Service Centers Knowledge Management Downsizing 4.76 3.05 3.90 3.93 3.93 3.80 3.86 3.73 3.78 3.73 3.80 3.95 3.88 3.91 3.78 Significantly higher satisfaction rate than other sized companies Significantly lower satisfaction rate 27 .83 3.03 4.73 3.79 3.54 Small 4.79 3.55 3.

“Somewhat Dissatisfied”. or “Neither” with their firm’s financial results. “Satisfied” – Executives who are “Extremely Satisfied” or “Somewhat Satisfied” .• Respondents who are satisfied with their organization’s financial performance are also more satisfied with many of the tools “Not Satisfied” – indicated they were “Extremely Dissatisfied”.

87 3.71 3.78 3.75 3.99 3.61 3.75 3.97 3.76 3.88 3.76 3.95 3.81 3.97 3.87 3.66 3.76 3.80 3.69 3.70 3.12 3.73 3.92 3.89 3.88 3.69 3.58 3.77 3.66 3.86 3.72 3.60 3.98 3.73 3.89 3.60 28 .70 3.70 3.61 3.53 3.93 3.87 3.80 3.65 3.69 3.58 Satisfied 4.76 3.66 3.80 3.Those satisfied with Financial Results are also more satisfied with many management tools Strategic Planning Customer Segmentation Mission and Vision Statements Voice of the Customer Innovation Growth Strategy Tools Lean Six Sigma Business Process Reengineering Balanced Scorecard Customer Relationship Management Mergers and Acquisitions Scenario and Contingency Planning Benchmarking Core Competencies Strategic Alliances Supply Chain Management Total Quality Management Loyalty Management Tools Outsourcing Price Optimization Models Collaborative Innovation Online Communities Decision Rights Tools Shared Service Centers Knowledge Management Downsizing Significantly higher than those not in group Not Satisfied 3.92 3.

iFive tools saw large increases in satisfaction from 2006 -Balanced Scorecard -Lean Six Sigma -Loyalty Management Tools -Mission and Vision Statements -Growth Strategy Tools .

Largest satisfaction changes since 2006 2006 2008 2006 mean mean rank • Balanced Scorecard • Lean Six Sigma* • Loyalty Management Tools 3.59 3.75 *Called Six Sigma in 2006 All differences significantly different 29 .60 3.83 3.66 3.87 21 18 22(t) 8(t) 13 2008 rank 8(t) 5(t) 17(t) 3 5(t) • Mission and Vision Statements 3.78 • Growth Strategy Tools 3.79 3.91 3.87 3.

For example.• The odds of success vary widely for different tools. 32% of those who use Strategic Planning report that they are extremely satisfied with the tool. creating a positive “satisfaction spread” of 24 points (32–8) • At the bottom of the page are tools that dissatisfied almost as many users as they pleased . while only 8% say they are dissatisfied.

Satisfaction spreads Spread Strategic Planning Mission and Vision Statements Customer Segmentation Lean Six Sigma Growth Strategy Tools Supply Chain Management Voice of the Customer Innovation Total Quality Management Mergers and Acquisitions Business Process Reengineering Scenario and Contingency Planning Core Competencies Strategic Alliances Customer Relationship Management Loyalty Management Tools Decision Rights Tools Balanced Scorecard Price Optimization Models Outsourcing Benchmarking Collaborative Innovation Shared Service Centers Online Communities Knowledge Management Downsizing 24 21 20 16 16 14 14 13 13 13 13 12 12 12 11 10 10 10 10 8 8 7 7 3 3 % Extremely satisfied 32% 29% 28% 28% 24% 24% 24% 23% 25% 21% 19% 19% 22% 22% 22% 18% 20% 19% 21% 15% 17% 21% 17% 15% 15% % Dissatisfied -8% -8% -8% -12% -8% -10% -10% -10% -12% -8% -6% -7% -10% -10% -11% -8% -10% -9% -11% -7% -9% -14% -10% -12% -12% 30 .

Perhaps some tools should not be used on a limited basis at all iFor some tools.iMajor efforts achieve better satisfaction scores than limited efforts do for all tools. the differences are enormous. but is 24th when used as part of a limited effort iIt is important to understand incremental benefits of pursuing a major versus minor effort with each of these tools before deciding which tools to use and how much effort will be devoted to implementing them . Lean Six Sigma is the highest ranked tool when used as part of a major effort.

53 3.07 4.52 3.42 3.12 4.44 3.38 3.Major efforts achieve higher satisfaction Major effort score Lean Six Sigma Mission and Vision Statements Customer Segmentation Strategic Planning Balanced Scorecard Voice of the Customer Innovation Loyalty Management Tools Benchmarking Scenario and Contingency Planning Core Competencies Total Quality Management Business Process Reengineering Collaborative Innovation Growth Strategy Tools Strategic Alliances Customer Relationship Management Supply Chain Management Online Communities Outsourcing Mergers and Acquisitions Decision Rights Tools Price Optimization Models Knowledge Management Shared Service Centers Downsizing 4.36 3.51 3.52 3.51 3.07 4.05 4.51 3.24 4.47 3.05 4.84 Limited effort score 3.03 4.58 3.57 3.99 3.20 4.49 3.16 4.10 4.98 3.08 4.57 3.02 4.38 3.50 3.16 4.00 3.35 31 .44 3.61 3.29 4.17 4.47 3.09 4.39 3.59 3.11 4.04 4.89 3.15 4.08 4.44 3.51 3.

They include Downsizing. Online Communities and Decision Rights Tools .• The tools in the upper right quadrant are both heavily used and have satisfaction scores above the mean • Lean Six Sigma and Voice of the Customer Innovation are the only tools with below average usage and above average satisfaction • The tools that performed the worst are in the bottom left quadrant.

70 3.2008 Usage and Satisfaction Usage 80% Benchmarking 70 Outsourcing 55 CRM Strategic Planning Mission and Vision Statements Balanced Scorecard Core Competencies Customer Segmentation Business Process Reengineering 40 Mergers and Acquisitions Strategic Alliances Supply Chain Management Scenario & Contingency Planning Growth Strategy Tools Knowledge Management Shared Service Centers Downsizing TQM Lean Six Sigma Online Communities Collaborative Innovation Voice of the Customer Innovation Price Optimization Models Loyalty Management Tools Decision Rights Tools 3.00 4.90 4.50 Satisfaction 32 .60 3.80 3.10 25 10 3.

• All tools are projected to have higher usage levels in 2009. Those with the biggest projected gain are: -Price Optimization Models -Scenario and Contingency Planning -Growth Strategy Tools -Collaborative Innovation -Voice of the Customer Innovation .

Expected change in usage Projected Increase Price Optimization Models Scenario and Contingency Planning Growth Strategy Tools Collaborative Innovation Voice of the Customer Innovation Decision Rights Tools Knowledge Management Loyalty Management Tools Strategic Alliances Total Quality Management Core Competencies Business Process Reengineering Downsizing Online Communities Customer Segmentation Shared Service Centers Strategic Planning Customer Relationship Management Supply Chain Management Balanced Scorecard Mission and Vision Statements Outsourcing Benchmarking Mergers and Acquisitions Lean Six Sigma 35% 33% 33% 33% 31% 29% 29% 29% 28% 28% 27% 27% 25% 25% 24% 22% 22% 21% 20% 16% 13% 12% 11% 11% 11% Projected 2009 Usage 59% 75% 71% 57% 58% 39% 70% 46% 72% 62% 75% 77% 59% 51% 77% 63% 89% 84% 63% 69% 78% 75% 87% 57% 42% Actual 2008 Usage 24% 42% 38% 24% 27% 10% 41% 17% 44% 34% 48% 50% 34% 26% 53% 41% 67% 63% 43% 53% 65% 63% 76% 46% 31% 33 .

Will look at correlations between this question and usage in final version • Few executives are extremely satisfied with their organization’s performance on any of the key metrics .

Satisfaction with firm performance Percent of respondents (n = 1430) 80 69 60 Somewhat satisfied 65 64 61 54 40 20 Extremely satisfied 0 Competitive Positioning Financial Results Long-Term Performance Capabilities Customer Equity Organizational Integration Percent not satisfied (1/2) 17% 28% 19% 16% 26% 34 .

not fleeting fads: Line managers and tool gurus don’t always have perfectly aligned agendas. Discovers unmet customer needs. Builds distinctive capabilities. but managers must manage. Champion enduring strategies. Adapt tools to your business system (not vice versa) . Success requires understanding the full effects—and side effects—of each tool and then creatively combining the right ones in the right ways at the right times. Don’t naively accept hyperbole and simplistic solutions 2. c. b. strategic directions and regarding the specific tools for getting there as ancillary 3. such managers’ programs are greeted with increasing skepticism. Use the research. Tool gurus may provoke stimulating discussions. Exploits competitor vulnerabilities. Talk to other tool users. implementing and integrating the tools appropriate for their companies. A management tool will improve results only to the extent that it: a. Managers who promote fleeting fads undermine employees’ confidence that they can create needed change. Get the facts: Every tool carries a set of strengths and weaknesses.On the basis of our research to date. we offer four suggestions for the usage of tools: 1. 4. Choose the best tools for the job: Managers need a rational system for selecting. Develops breakthrough strategies by effectively integrating these accomplishments. d. Executives would be better served by championing realistic.

not fleeting fads iChoose the best tool for the job iAdapt tools to your business system 35 .Tool tips iGet the facts iChampion enduring strategies.

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Appendix 36 .

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88 (8th) 3.94 (5th) 3.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 53% (6th) 66% (12th) 57% (13th) 62% (16th) 36% (14th) 40% (14th) 38% (19th) 46% (14th) 39% (15th) Satisfaction 3.74 3.84 (13th) 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 53% 49% 54% 52% 56% 61% 54% 41% 2008 Satisfaction 3. Related Topics: Management by Objectives (MBO).80 3.60 (21st) 3.82 3. Services.94 (5th) 3.93 3.86 (18th) 3.74 3.83 3.83 3.84 2009 Expected 69% 63% 68% 69% 72% 75% 66% 63% • Industries with highest percentage of usage: Chemicals & Metals. Strategic Balance Sheet. Pharma & Biotech Significantly higher rate than other regions/company size Significantly lower rate 37 .Balanced Scorecard “Balanced Scorecard: Translates Mission and Vision Statements into quantifiable measures and gauges whether management is achieving desired results.81 (7th) Global: N.83 (8th) 3. Food & Beverage: CPG: Manufacturing • Industries with highest satisfaction: Healthcare.89 (13th) 3. Pay-for-Performance.

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Construction & Real Estate • Industries with highest satisfaction: Transport & Tourism.89 (11th) 3.78 3.89 (11th) 3.83 3.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 76% (1st) 81% (4th) 73% (3rd) 84% (2nd) 69% (3rd) 77% (3rd) 82% (2nd) 82% (1st) 79% (3rd) 76% (3rd) 77% (3rd) 70% (6th) Satisfaction 3.Benchmarking “Benchmarking: Compares processes and performance with internal and external benchmarks.70 (13th) Global: N.88 (11th) 3. CPG.80 (6th) 3.85 3.83 3.98 (3rd) 3.82 3.85 3.82 (12th) 3.96 (6th) 3.84 3. Companies incorporate identified best practices to meet improvement targets. Related topics: Best Demonstrated Practices.80 (2nd) 3.80 2009 Expected 87% 86% 86% 84% 90% 90% 87% 81% • Industries with highest percentage of usage: Chemicals & Metals.76 (6th) 3.93 (2nd) 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 76% 75% 79% 67% 79% 80% 77% 67% 2008 Satisfaction 3. Competitor Profiles. CPG.99 (4th) 3. Pharma & Biotech Significantly higher rate than other regions/company size Significantly lower rate 38 .

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91 2009 Expected 77% 78% 73% 79% 77% 81% 77% 72% 3.82 3. Overhead Value Analysis. Related Topics: Cycle Time Reduction.75 (21st) 3.85 3.90 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 50% 58% 49% 46% 50% 55% 51% 45% 2008 Satisfaction 3. Process Redesign.72 (21st) 3.76 3.87 3.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 50% (8th) 69% (8th) 61% (10th) 54% (19th) 38% (13th) 44% (12th) 58% (12th) 61% (8th) 65% (7th) 69% (7th) 68% (6th) 67% (7th) Satisfaction 3. CPG.85 (16th) 3. Financial Services Significantly higher rate than other regions/company size Significantly lower rate 39 .81 (5th) • Industries with highest percentage of usage: Healthcare. Horizontal Organizations.75 (20th) 3.Business Process Reengineering “Business Process Reengineering: Radically redesigns core business processes to achieve dramatic improvements in productivity.81 (21st) 3.90 (11th) 3.85 (7th) 3.77 (11th) 3. cycle times and quality.71 (18th) 3.61 (17th) 3. Pharma & Biotech.80 3. Financial Services • Industries with highest satisfaction: Construction.93 3.76 (7 ) th 2008 Usage Global: N.

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Utilities & Energy *Called “Open-Market Innovation” Significantly higher rate than other regions/company size 40 Significantly lower rate . Healthcare. Food & Beverage • Industries with highest satisfaction: Pharma & Biotech. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 24% 34% 24% 22% 21% 26% 26% 23% 2008 Satisfaction 3.71 3.” Usage 2008: 2006: 2004* : 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 24% (22nd) 53% (18th) 26% (23rd) Satisfaction 3.67 3.70 2009 Expected 57% 64% 49% 62% 56% 61% 59% 51% • Industries with highest percentage of usage: CPG. Open-Market Innovation.78 3. Media & Entertainment.60 3.72 (15th) 3.Collaborative Innovation “Collaborative Innovation: Applies the principles of free trade to the marketplace for new ideas. Open Innovation. Related topics: New Product Development. enabling the laws of comparative advantage to drive the efficient allocation of R&D resources.90 3. Construction & Real Estate.60 3.72 3.71 (20th) 3.70 (23rd) Global: N.

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Media & Entertainment: Transport & Tourism 41 Significantly higher rate than other regions/company size Significantly lower rate .82 3.01 (3rd) 3. Food & Beverages • Industries with highest satisfaction: Retail.Core Competencies “Core Competencies: Identifies and invests in special skills or technologies that create unique customer value.82 (12th) 3. Key Success Factors.90 3.88 (12th) 3.60 (20th) • Industries with highest percentage of usage: Pharma & Biotech.88 (15th) 3.86 (5th) 3.82 3.83 (6th) 3.83 (18th) 3.79 (17th) 3.97 (4 ) th 2008 Usage Global: N.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 48%(9th) 79% (5th) 65% (7 ) th Satisfaction 3.75 (6th) 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 48% 60% 44% 56% 39% 52% 52% 40% 2008 Satisfaction 3.80 3. Related Topics: Core Capabilities.83 2009 Expected 75% 80% 73% 83% 70% 79% 77% 69% 75% (11th) 48% (10th) 50% (10th) 60% (11th) 61% (7th) 69% (5th) 66% (9th) 60% (9th) 52% (11th) 4. Healthcare.71 3.83 3.80 3.70 (11th) 3.

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83 (8th) 3. Customer Segmentation. Transport & Tourism • Industries with highest satisfaction: Food & Beverage. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 63% 69% 68% 70% 53% 65% 65% 58% 2006 Satisfaction 3. Pharma & Biotech 42 Significantly higher rate than other regions/company size Significantly lower rate .86 2009 Expected 84% 84% 85% 88% 79% 86% 83% 81% 78% (7th) 35% (15th) - 3.83 3.91 (9 ) th 2008 Usage Global: N. sales and service processes to increase customer value. Customer Retention.82 3.77 3.79 3.81 (13th) 3.79 3. Related Topics: Collaborative Commerce.87 (4th) 3. Customer Surveys.67 (22nd) - • Industries with highest percentage of usage: Media & Entertainment.82 3.92 3.Customer Relationship Management (CRM) “Customer Relationship Management: Collects data about customers to optimize marketing.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 63% (4th) 84% (2nd) 75% (2 ) nd Satisfaction 3. Loyalty Management.

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Related Topics: Customer Surveys. Food & Beverage.Customer Segmentation “Customer Segmentation: Subdivides markets into discrete customer groups that share similar characteristics in order to develop tailored product offerings or marketing programs.95 3.08 4.01 3. Transport & Tourism Significantly higher rate than other regions/company size Significantly lower rate 43 .94 (8th) 3. Food & Beverage • Industries with highest satisfaction: Construction & Real Estate.87 (17th) - • Industries with highest percentage of usage: Transport & Tourism.84 2009 Expected 77% 70% 77% 81% 80% 79% 76% 73% 4.97 (4 ) th 2008 Usage Global: N.95 (2nd) 3.93 (1st) 3.92 3.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 53% (6th) 82% (3rd) 72% (5th) 79% (4th) 51% (9th) 52% (9th) 60% (9th) Satisfaction 3.87 3. One-to-One Marketing. Market Segmentation. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 53% 49% 57% 51% 53% 58% 50% 45% 2006 Satisfaction 3.01 (4th) 3.99 (3rd) 3.92 4.83 3.

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33 3.70 3.Decision Rights Tools “Decision Rights Tools: Helps companies to organize their decision making and execution by setting clear roles and accountabilities and by giving all those involved a sense of ownership of decisions: when to provide input. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 10% 11% 11% 9% 9% 36% 38% 34% 2008 Satisfaction 3. Pharma & Biotech • Industries with highest satisfaction: Healthcare.68 3.69 2009 Expected 39% 39% 34% 46% 38% 43% 38% 31% Significantly higher rate than other regions/company size Significantly lower rate .80 3. Retail 44 2008 Usage Global: N.75 3.60 3. who should follow through and what is beyond their scope.68 (22nd) • Industries with highest percentage of usage: CPG.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 10% (25th) Satisfaction 3.64 3.

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” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 34% (17th) 59% (17 ) th Satisfaction 3.78 2009 Expected 59% 70% 60% 61% 52% 67% 51% 50% - - • Industries with highest percentage of usage: Media & Entertainment.66 3. Related Topics: Layoffs. Rightsizing.55 3.53 3.59 (25th) 3.Downsizing “Downsizing: In the face of slowing or declining sales. companies often downsize their employee base as a means of cutting costs to boost profitability.49 (24 ) th 2008 Usage Global: N.60 3.54 3. Food & Beverage 45 Significantly higher rate than other regions/company size Significantly lower rate .59 3. Reengineering. Construction & Real Estate • Industries with highest satisfaction: Transport & Tourism. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 34% 51% 34% 35% 25% 40% 28% 31% 2008 Satisfaction 3.60 3.

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93 3.78 (20th) 3.Growth Strategy Tools “Growth Strategy Tools: Used to identify and direct resources toward opportunities for profitable growth.77 (13th) - • Industries with highest percentage of usage: Mining. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 38% 31% 26% 33% 50% 37% 42% 36% 2008 Satisfaction 3.85 (15th) 3.87 (5th) 3. Related Topics: Adjacency Expansion.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 38% (16th) 65% (14th) 62% (9th) 78% (9 ) th Satisfaction 3. CPG • Industries with highest satisfaction: CPG.01 3.87 2009 Expected 71% 67% 57% 72% 79% 72% 69% 67% 55% (6th) 55% (97h) 63% (7th) 55% (10th) 55% (10th) - 3. Utilities & Energy 46 Significantly higher rate than other regions/company size Significantly lower rate .87 3. Chemical & Metals.86 3.91 (9th) 3. Managing Innovation.93 (10th) 3. Market Migration Analysis.75 3.82 (16th) 3.75 (13th) 3.66 4.77 3. Food & Beverage.82 (12 ) th 2008 Usage Global: N.

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43 (25th) 3. Learning Organization.58 (25th) 3. Managing Innovation.58 3.64 3.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 41% (14th) 69% (8th) 54% (15th) 62% (15 ) th Satisfaction 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 41% 45% 43% 50% 34% 47% 45% 35% 2008 Satisfaction 3.Knowledge Management “Knowledge Management: Develops systems and processes to capture and share a company’s intellectual assets. Services • Industries with highest satisfaction: Retail. Related Topics: Groupware.65 3. Intellectual Capital Management.63 (25th) 3. Food & Beverages 47 Significantly higher rate than other regions/company size Significantly lower rate .66 (24th) 3.48 (23rd) Global: N.70 3.79 2009 Expected 70% 70% 67% 78% 68% 74% 70% 66% 32% (19th) 30% (18th) 33% (23rd) 30% (21st) 28% (21st) - • Industries with highest percentage of usage: Tech & Telecomm.61 (23rd) 3.73 (22nd) 3.63 (23rd) 3.64 3.64 3.66 3.59 (22nd) 3.

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Related Topics: Lean Manufacturing.Lean Six Sigma “Lean Six Sigma: Combines elements of Lean Manufacturing and Six Sigma approaches.91 3.87 3. Healthcare • Industries with highest satisfaction: Utilities & Energy. Chemicals & Metals.89 3.90 3. Manufacturing.90 3.96 3.70 2009 Expected 42% 42% 40% 51% 39% 51% 40% 29% • Industries with highest percentage of usage: Chemicals & Metals.68 3. Goal is to help companies achieve higher quality in a fast and efficient way by creating a culture of responsiveness and accountability. TQM Usage 2008* 31% (19th) : 2006: 40% (21st) 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 34% (21st) Satisfaction 3.87 (5th) 3. Six Sigma. Statistical Process Control. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 31% 33% 34% 31% 28% 37% 30% 19% 2008 Satisfaction 3.89 (14th) Global: N.66 (18th) 3. Transport & Tourism *Name changed from “Six Sigma” to “Lean Six Sigma” Significantly higher rate than other regions/company size 48 Significantly lower rate .

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84 3.79 3. CPG • Industries with highest satisfaction: Retail.67 (25th) • Industries with highest percentage of usage: Media and Entertainment. Related Topics: Customer and employee surveys.78 3. Quantifiably links financial results to changes in retention rates.56 3.79 (17th) 3. Customer Loyalty and Retention. Services 49 2008 Usage Global: N.69 2009 Expected 46% 46% 38% 54% 46% 51% 47% 38% Significantly higher rate than other regions/company size Significantly lower rate .” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 17% (24th) 51% (19th) 40% (19th) Satisfaction 3.59 (22nd) 3. Retail.Loyalty Management Tools “Loyalty Management Tools: Used to grow a business’s revenues and profits by improving retention among its customers.88 3. Net Promoter Scores.79 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 17% 17% 16% 18% 17% 21% 18% 12% 2008 Satisfaction 3. employees and investors.90 3.

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90 3.83 3.Mergers and Acquisitions “Mergers and Acquisitions: Acquisitions occur when a larger company takes over a smaller one.72 3.74 3.76 2009 Expected 57% 58% 66% 57% 52% 63% 59% 53% • Industries with highest percentage of usage: Utilities & Energy. Wholesale. Related Topics: Merger Integration Teams.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 46% (10th) 50% (20th) Satisfaction 3. Chemicals & Metals 50 Significantly higher rate than other regions/company size Significantly lower rate .83 (8th) 3.90 3. Strategic Alliances. Distribution & Logistics • Industries with highest satisfaction: Construction & Real Estate. a merger typically involves two relative equals joining forces and creating a new company.88 (3rd) Global: N. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 46% 49% 53% 45% 41% 54% 42% 41% 2008 Satisfaction 3.77 3.91 3.

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93 (11th) 3.91 (3rd) 3.72 3.Mission and Vision Statements “Mission and Vision Statements: Codify definitions of a company’s business.74 (21st) 3. Healthcare 51 Significantly higher rate than other regions/company size Significantly lower rate .86 3. Related Topics: Corporate Value Statements.95 3.78 (8th) 3.88 2009 Expected 78% 77% 78% 79% 78% 81% 82% 71% 84% (3rd) 70% (2nd) 79% (2nd) 74% (4th) 78% (3rd) 82% (2nd) 84% (1st) 86% (1st) 88% (1st) 3. Culture Transformation. Strategic Planning.81 (8th) 3.90 (2nd) • Industries with highest percentage of usage: Wholesale.79 (4th) 3. Distribution & Logistics.84 (16th) 3.80 (3rd) 3. approach and desired future position.87 (16 ) th 2008 Usage Global: N.91 3.99 (4th) 3. CPG • Industries with highest satisfaction: Construction & Real Estate.02 3.93 3. objectives.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 65% (3rd) 79% (5th) 72% (5 ) th Satisfaction 3.94 (6th) 3.88 4. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 65% 70% 63% 61% 67% 69% 66% 59% 2008 Satisfaction 3.

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Transport & Tourism Significantly higher rate than other regions/company size Significantly lower rate 52 .64 3. Media & Entertainment • Industries with highest satisfaction: Healthcare.69 3. By tapping into the multimedia capabilities.69 (21st) Global: N.73 3. Related Topics: e-communities. solicit and respond to feedback and rapidly correct misinformation. Social Networking” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 26%(21st) Satisfaction 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 26% 35% 25% 26% 21% 30% 20% 24% 2008 Satisfaction 3.72 2009 Expected 51% 59% 53% 54% 43% 57% 48% 46% • Industries with highest percentage of usage: Tech and Telecom.80 3.55 3.Online Communities “Online Communities: a form of internet-based social networking that allows organizations to have two-way communication with their employees.74 3. customers and partners through computer networks. companies can also display and sell products.49 3.

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88 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 63% 61% 56% 62% 67% 65% 63% 58% 2008 Satisfaction 3. Food & Beverage 53 Significantly higher rate than other regions/company size Significantly lower rate .79 (17th) 3.70 3.89 (14 ) th 2008 Usage Global: N.82 3.79 3. Strategic Alliances.87 3.79 (18th) 3.68 (17th) 3.84 (10th) 3.Outsourcing “Outsourcing: Uses third parties to perform non-core business activities. Value Chain Analysis.89 (14th) - • Industries with highest percentage of usage: Pharma & Biotech.80 (19th) 3. Transport & Tourism • Industries with highest satisfaction: Utilities & Energy. Related Topics: Core Capabilities.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 63% (4th) 77% (7th) 73% (3rd) 78% (5th) 63% (4th) 62% (5th) 71% (6th) - Satisfaction 3.80 2009 Expected 75% 73% 70% 78% 78% 80% 76% 66% 3.76 3.71 3.

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73 3.87 (16 ) th 2008 Usage Global: N. Revenue Enhancement. Pricing Strategy.75 2009 Expected 59% 54% 60% 61% 59% 65% 58% 45% - - • Industries with highest percentage of usage: Food & Beverage. Transport & Tourism • Industries with highest satisfaction: Utilities & Energy.Price Optimization Models “Price Optimization Models: Mathematical programs that calculate how demand varies at different price levels.75 3. Related topics. Food & Beverage 54 Significantly higher rate than other regions/company size Significantly lower rate . then combines the data with information on costs and inventory levels to recommend prices that will improve profits.82 3.61 3.75 (19th) 3.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 24% (23rd) 36%(20 ) th Satisfaction 3. Demand-Based Management.62 3.80 3.94 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 24% 25% 25% 22% 23% 28% 24% 16% 2008 Satisfaction 3.

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81 (14 ) th 2008 Usage Global: N.53 (21st) 3.78 (18th) 3.90 (11th) 3.59 (19 ) th 38% (16th) 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 42% 37% 38% 33% 51% 44% 44% 37% 2008 Satisfaction 3. Pharma & Biotech • Industries with highest satisfaction: Construction & Real Estate. Disaster Recovery.86 (15th) 3. Healthcare 55 Significantly higher rate than other regions/company size Significantly lower rate .90 (10th) 3.83 3.69 3.78 3.73 2009 Expected 75% 67% 70% 75% 82% 79% 75% 67% 35% (16th) 28% (20th) 35% (22nd) 35% (19th) 35% (18th) 39% (17th) 44% (15 ) th 3. Related Topics: Crisis Management. Simulation Models.83 (8th) 3.78 (22nd) 3.91 3.78 (8th) 3. Groupthink.Scenario and Contingency Planning “Scenario and Contingency Planning: Involves raising and testing various “what-if” scenarios.90 3. Real Options Analysis.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 42% (13th) 69% (8th) 54% (15th) 70% (12 ) th Satisfaction 3.78 3.81 3.69 (19th) 3.68 (15th) • Industries with highest percentage of usage: Transport & Tourism.

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Retail 56 Significantly higher rate than other regions/company size Significantly lower rate .84 3. Outsourcing. information technology. Distribution & Logistics • Industries with highest satisfaction: Food & Beverage. Wholesale. customer service and human resources – into a shared operation. Strategic Partnerships” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 41% (14th) 55% (16th) Satisfaction 3.70 3. Offshoring.62 3.Shared Service Centers “Shared Service Centers: Method of reducing costs through consolidating one or more back-office operations used by multiple divisions of the same company – such as finance.56 3.69 3.64 3. CPG. Related Topics: Joint Ventures.63 (19th) Global: N. Performance Improvement.68 (22nd) 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 41% 38% 44% 39% 41% 48% 37% 29% 2008 Satisfaction 3.65 2009 Expected 63% 61% 65% 68% 61% 73% 62% 47% • Industries with highest percentage of usage: Utilities & Energy.68 3.

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73 3.82 3.82 (12th) 3. Construction & Real Estate 57 Significantly higher rate than other regions/company size Significantly lower rate . Value-Managed Relationships.71 3.77 3.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 44% (11th) 68% (11th) 63% (8th) 69% (13 ) th Satisfaction 3. Related Topics: Corporate Venturing.70 (14th) • Industries with highest percentage of usage: Tech & Telecomm.76 3.74 (21st) 3.87 2009 Expected 72% 73% 66% 78% 72% 72% 72% 73% 53% (7th) 53% (8th) 60% (10th) 60% (9th) 61% (9th) 68% (8th) 68% (8 ) th 3.86 3.96 (4th) 3.97 3.74 (7th) 3. Joint Ventures. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 44% 51% 38% 45% 43% 44% 47% 47% 2008 Satisfaction 3. Virtual Organizations.73 (23rd) 3. Pharma & Biotech • Industries with highest satisfaction: Utilities & Energy.Strategic Alliances “Strategic Alliances: Create agreements between firms in which each commits resources to achieve a common set of objectives.80 (18 ) th 2008 Usage Global: N.78 (8th) 3.72 (9 ) th 62% (8th) 3.88 (16th) 3.73 (15th) 3.95 (6th) 3.

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90 4.01 3.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 67% (2nd) 88% (1st) 79% (1 ) st Satisfaction 4. Mission and Vision Statements.17 4.04 (1st) 3.03 3.02 (3rd) 4.11 (1st) 4.14 (1 ) st 2008 Usage Global: N.01 (1st) 3.06 (2nd) 4.99 (1st) - • Industries with highest percentage of usage: CPG.05 2009 Expected 89% 89% 80% 90% 94% 90% 91% 86% 89% (1st) 76% (1st) 81% (1st) 84% (1st) 80% (2nd) 83% (1st) - 4. Utilities & Energy 58 .04 (2nd) 4. Related topics: Core Competencies. Food & Beverage • Industries with highest satisfaction: Retail.89 3. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 67% 73% 56% 58% 74% 68% 70% 62% 2008 Satisfaction 4.Strategic Planning “Strategic Planning: involves a comprehensive process for determining what a business should become and how to allocate scarce resources to achieve that objective.93 (1st) 4.99 4.91 3. Scenario and Contingency Planning.

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Value Chain Analysis.81 (15th) 3.77 3.79 2009 Expected 63% 53% 62% 68% 67% 71% 59% 54% • Industries with highest percentage of usage: CPG.85(17th) 3.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 43% (12th) 66% (12th) 56% (14th) 52% (20th) 32% (18th) 31% (17th) Satisfaction 3.75 3.99 (2nd) 3. distributors. Distribution & Logistics 59 Significantly higher rate than other regions/company size Significantly lower rate .81 3.88 3.87 3.82 3.88 (12th) Global: N. manufacturers.Supply Chain Management “Supply Chain Management: Synchronizes the efforts of multiple parties – suppliers. dealers and customers – to enable the seamless exchange of information.80 (16th) 3. Chemicals & Metals • Industries with highest satisfaction: Pharma & Biotech.77 (11th) 3. Related Topics: Borderless Corporation. Collaborative Commerce. goods and services across organizational boundaries.81 3. Wholesale. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 43% 38% 47% 45% 43% 52% 35% 33% 2008 Satisfaction 3. Food & Beverage.

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Total Quality Management (TQM)
“Total Quality Management: Marries customer performance requirements to product and service specifications with the goal of producing with zero defects. Related Topics: Continuous Improvement, Malcolm Baldridge National Quality Award, Quality Assurance, Six Sigma.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 34% (17th) 64% (15th) 61% (10th) 57% (18th) 41% (11th) 49% (11th) 61% (8th) 62% (6th) 66% (6th) 73% (4th) 72% (4 )
th

Satisfaction 3.80 (16th) 3.80 (6th) 3.93 (7th) 3.80 (17th) 3.89 (13th) 3.95 (7th) 3.94 (9th) 3.78 (19th) 3.73 (16th) 3.69 (9th) 3.71 (10 )
th

2008 Usage Global: N. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 34% 30% 33% 37% 36% 35% 34% 32%

2008 Satisfaction 3.80 3.64 3.71 3.88 3.87 3.84 3.73 3.90

2009 Expected 62% 54% 62% 70% 62% 64% 60% 58%

72% (3rd)

3.78 (8th)

• Industries with highest percentage of usage: CPG; Food & Beverage • Industries with highest satisfaction: Utilities & Energy; Healthcare
60

Significantly higher rate than other regions/company size

Significantly lower rate

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Voice of the Customer Innovation
“Voice of the Customer Innovation: a method of using a combination of qualitative and quantitative research techniques to identify and prioritize customers’ needs and wants to improve product development and service quality. Related Topics: Customer visit teams, ethnography, focus groups.” Usage 2008: 2006: 2004: 2002: 2000: 1999: 1998: 1997: 1996: 1995: 1994: 1993: 27% (20th) Satisfaction 3.88 (4th) Global: N. America: Europe: Asia-Pacific: Latin America: Large companies ($2B+): Medium companies ($600M-2B): Small companies (<$600M): 2008 Usage 27% 28% 24% 32% 26% 30% 24% 21% 2008 Satisfaction 3.88 3.88 3.89 3.97 3.81 3.92 3.67 3.93 2009 Expected 58% 55% 50% 65% 59% 63% 57% 51%

• Industries with highest percentage of usage: Healthcare; Tech & Telecomm • Industries with highest satisfaction: Construction & Real Estate; Retail; Manufacturing; Wholesale, Distribution & Logistics Significantly higher rate than other regions/company size Significantly lower rate
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please check this box and provide survey answers related to your division. All responses will be kept completely confidential and used only in aggregate. If you are a division head. please check this box and provide survey answers related to your corporation as a whole. . No company names will be linked to specific responses.2009 Survey of Management Tools & Trends If you are a corporate executive.

it will be used on a limited or trial basis. Also. somewhat dissatisfied. In the past year (2008). Within the last five years (2004-2008). 1c. or was a major organizational effort. Please note whether or not you have used each technique in the past. somewhat satisfied. was used on a limited or trial basis. II. To record your answers. which of the following techniques have been used by your current employer? 1b. in thinking about your satisfaction.I. 1a. Overall satisfaction with tools For this next section. consider both the benefits achieved and all costs associated with using each technique. 2. or it will be a major organizational effort. neither satisfied nor dissatisfied. Use of tools The purpose of this section is to understand your organization's use of management tools and techniques. or extremely dissatisfied. To what extent do you think your organization will use each technique in 2009? Please indicate whether you think it is not likely to be used at all. please check the appropriate box(es) in the grid below. . please answer only for those techniques that your company has used in the past five years. How satisfied was your organization with the overall results achieved through the usage of each technique? Please use the following scale: extremely satisfied. which of the 25 techniques listed has your organization used? Please indicate whether the technique was not used at all.

lik el y Li m ite Li m ite aj or aj or Us ed Balanced Scorecard Benchmarking Business Process Reengineering Collaborative Innovation Core Competencies Customer Relationship Management Customer Segmentation Decision Rights Tools Downsizing Growth Strategy Tools Knowledge Management Lean Six Sigma Loyalty Management Tools Mergers and Acquisitions Mission and Vision Statements Online Communities Outsourcing Price Optimization Models Scenario and Contingency Planning Shared Service Centers Strategic Alliances Strategic Planning Supply Chain Management Total Quality Management Voice of the Customer Innovation Other _______________________ So m Tools and techniques N Ex t at is N fie ei no th d r er di ss sa at tis is fie fie d So d m ew ha td is Ex sa tr ti s em fie el d y di ss at is fie d ar s al l ye us e ef fo rt sa tis re m el y 5 al l is is ot ot M N M ew ha ts ef fo rt to at pa s us ed ba s in d d ba s t fie d at .

The purpose of this section is to understand your organization’s needs and priorities for management tools. There are no right or wrong answers. We are interested in your opinions.strongly disagree with the statement as a description of your organization. How strongly do you agree or disagree with how well each statement describes your organization or your re ag g ly e e ree gr e ag r a gree t e ha a ith ew Ne r dis o om n S organization's beliefs? Please check the appropriate box to indicate whether you strongly agree. e on Str e re ag gr e dis isa t d ha ly ew ng tro om S S Culture is as important as strategy for business success Innovation is more important than cost reduction for long-term success Insufficient customer insight is hurting our performance Our entire organization is actively engaged in improving innovation Other emerging markets now offer better opportunities than China and India We will pursue sustainability initiatives even if they hurt our profits Our decisions are being driven by short-term financials.. 3.. not long-term strategies The current downturn will change consumer behaviors for at least 3 years We are planning for a downturn that will last at least until early 2010 Government regulation of business will increase over the next 5 years Unclear decision making authority is hurting our performance International growth will be vital to our performance over the next 5 years Our top executives are comfortable taking higher risks for potentially higher returns We should focus more on revenue growth and less on cost reductions Our company waited too long to respond to this economic downturn I am very concerned about how we will meet our growth targets in 2009 Our company will use this recession to improve our competitive position Our company will have significant layoffs in 2009 We could dramatically boost innovation by collaborating with other companies Almost all of today’s market leaders will still be leaders 5 years from now .

Company name: Division: SS N SD ED 5d. somewhat satisfied (SS). neither satisfied nor dissatisfied (N). How satisfied are executives with your organization’s current results on each performance dimension? Please indicate whether they are extremely satisfied (ES). Describe the industry your organization is in. Please be assured that specific answers will never be attached to individual companies. Corporate: Division: Please record the information below so that we may send you the results from the survey. if appropriate. Please record your company's basic business statistics under the first column. All responses will remain completely confidential and will be used only in aggregate. or extremely dissatisfied (ED). Would you be willing to participate in a follow-up discussion on this topic? Yes No 5c. somewhat dissatisfied (SD). Demographics This section is for classification purposes only. If you are responsible for a division. .IV. ES Financial Results Customer Equity Long-Term Performance Capabilities Competitive Positioning Organizational Integration 5a. • 2008 sales: Less than $600MM $600MM to less than $2B $2B or more • 2008 assets: Less than $1B $1B to less than $20B $20B or more 5b. What is your title? _____________________________________________ _____________________________________________ Corporate Statistics Division Statistics Name of respondent: ____________________________________________ _ Mailing address: Country: Zip/Postal code: _____________________________________________ _____________________________________________ _____________________________________________ Business telephone: _____________________________________________ E-mail address: _____________________________________________ Thank you very much for your help with this important project. 4. record the statistics for that division under the second column. both at the corporate level and at the division level.

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