Heidrick & Struggles International, Inc. (ticker: HSII, exchange: NASDAQ) News Release - 18-May-1999
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The Conference Board/Heidrick & Struggles Survey of CEOs is Largest in Conference Board`s 83 Year History
Business Editors & Financial Writers
ATLANTA--(BUSINESS WIRE)--May 18, 1999--
Downward Price Pressures, Competitive Threats are Most Critical CEO Challenges
Industry Consolidation and Merger Management Among Other Top Worries
Chief executives around the world say their most important marketplace challenge over the next year is to cope with downward pressure on their prices and fast-growing new competition, according to a comprehensive survey of 656 CEOs conducted by The Conference Board and Heidrick & Struggles.
The number of CEO responses is the highest in the 83-year history of The Conference Board's survey program and one of the largest broad-based CEO studies in recent years.
The survey covers 550 CEOs in the Americas, 57 in Europe, 32 in Japan, and 17 in other parts of the world. It breaks out data according to industry, sales and region. CEOs identified their top 3 marketplace (business environment) concerns and their top 3 management challenges for the next year.
More than two-thirds of the CEOs heading industrial manufacturing firms and about 55% of the CEOs leading consumer products companies say that pressures on prices will be their major market challenge over the next year. Price instability has already become an issue in Europe. Says Lord Marshall of Knightbridge, CEO of British Airways, a participant in the survey: "The single currency in Europe will eventually lead to greater transparency in business, especially in pricing. The pricing pressure in Europe will have a big impact on many consumer products firms. Information technology and the Internet will also contribute to downward pressure on prices. Many consumer products, not the least of which is the automobile sector, are facing price instability in Europe."
The top management challenges for CEOs in the coming year are finding ways to build customer loyalty, reduce costs, engage their employees, and manage mergers, acquisitions or strategic alliances. But customer loyalty is far more important among American CEOs than it is among Europeans and the Japanese.
THE CONNECTION BETWEEN VISION AND CUSTOMER LOYALTY
"There is a clear correlation between a company's vision and values, and their customer loyalty and retention rates," said Patrick S. Pittard, President and CEO of Heidrick & Struggles International. "Engaged employees are the route to customer satisfaction. Loyal employees create loyal customers."
Among financial services firms, industry consolidation is the most critical concern, with nearly 50% of the CEOs calling it their major challenge. Technology firms are more worried than others about shortages of key skills.
BESIEGED BY NEW WAVES OF COMPETITION
"CEOs of major firms see their markets being invaded by unexpected competitors from virtually all parts of the world," says Melissa A. Berman, Senior Vice President, Research and Program Development, The Conference Board, and author of the report. "They note that new waves of competition are coming from countries such as India and Ireland, which have strengthened their information technology sectors, from established firms that have adroitly shifted their focus, such as IBM and Johnson Controls, who are now major forces in consulting, and from upstarts that have fashioned entirely new industries."
While price and customer loyalty issues are causing high anxiety in the West, the No. 1 worry of CEOs in Japan is finding ways to be more innovative. More than 60% of the Japanese CEOs say this has become their major challenge, against less than 24% for all CEOs. Japanese business leaders also say that changing technology and shifts in supply and distribution systems are big concerns. For European CEOs, increasing flexibility and speed are especially critical challenges.
Cost reduction is a significant concern of all CEOs, especially in Japan, where 41% rank it as one of their three major management challenges.
Nearly one-third of all CEOs and even larger numbers of Japanese business leaders say that engaging employees in the company's vision and value systems has become one of their most important management issues.
COMPETING FOR TALENT...EXPLOITING NEW TECHNOLOGY...
Among other major findings in The Conference Board-Heidrick & Struggles study:
-- Competing for talent carries a much higher priority in American firms. In Japan, and Europe to a lesser extent, CEOs don't see a real problem in hiring the talent they need.
-- The companies with the fastest-growing stock prices are more concerned than others with exploiting new technology and competing for talent.
-- Developing and retaining leaders is a serious concern among CEOs in all regions. It has the highest priority among professional services and technology companies.
For copies of the full report, please contact Jennifer Silver.
ABOUT HEIDRICK & STRUGGLES
Heidrick & Struggles, Inc., is the worldwide executive recruiting leader with over four decades of experience serving Fortune 500 companies, not-for-profit organizations and private investors in over 60 offices on six continents. The key to the firm's success has been to provide quality, expert service that meets a client's particular requirements and a candidate's individual needs. In November 1998, the International Association of Corporate and Professional Recruitment named Heidrick & Struggles the best performing search firm. For more information, visit http://www.heidrick.com/.
ABOUT THE CONFERENCE BOARD
The Conference Board is the world's leading business membership and research organization. More than 3,000 companies in 66 nations are members of The Conference Board's global network. The Conference Board produces the Leading Economic Indicators, the Consumer Confidence Index and other major indicators that have an impact on both business and the financial markets. It also produces the most definitive source of information about worldwide institutional investment trends and is a leading source of knowledge about corporate governance, corporate performance, human resources management and global corporate citizenship. For further information, visit http://www.conference-board.org/.
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CONTACT: The Conference Board
Melissa Berman, 212/339-0472
or
Heidrick & Struggles
Jennifer Silver, 404/572-0019
KEYWORD: GEORGIA ILLINOIS
INDUSTRY KEYWORD: BANKING COMPUTERS/ELECTRONICS COMED