UPFRONT Flick go the shears

The corporate pruning shears have been shoved back into the sheath and CEO priorities in New Zealand and Australia are now focused on growing business revenue and investing in people skills.
A global study released last month by IBM Consulting Services found both local and global CEOs believe the cost-cutting agenda has run its course and revenue growth is the number-one factor in boosting financial performance in the medium term. However, only 50 percent of Australian and New Zealand respondents rated it as their number-one priority compared to about 80 percent of global respondents – but then cost-cutting has not been such big deal here as it has in economies hit harder by global recession in recent years.
The study suggests Australasian uncertainty about the sustainability of global economic recovery, the rising cost of capital and intensifying global competition mean balanced growth agenda for CEOs wanting to maintain or improve profit margins.
Continued cost containment, effective asset utilisation and risk management all feature strongly in that agenda.
Most CEOs, 85 percent of them, rate organisational responsiveness to change as high or very high priority compared with less than 70 percent of CEOs globally. “CEOs told us that they recognise the need to embed responsiveness and agility into their technology and systems as well as their people’s behaviour, mindsets and decision-making,” says Grace Chopard, Asia Pacific leader, strategy and change for IBM Consulting. “One CEO called it ‘developing sense of urgency as core value’.”
Investment in people skills also rated highly. More than half the CEO respondents in Australia and New Zealand see people skills as the second most important issue on their agenda over the next three years, after external market factors. Only 42 percent of global CEOs rated people skills an issue.
“Getting the people strategy right is an imperative,” says Chopard.
But finding the right people won’t be easy with more than two-thirds of local respondents citing lack of qualified candidates as critical issue. And limited internal resources along with leadership resources are seen as major barrier to change.
“Australian and New Zealand CEOs believe that new kind of leadership talent is now required if organisations are to capture new growth opportunities,” says Chopard.
The IBM study involved consultations with 456 CEOs worldwide, including 59 from Australia and New Zealand.