13 July 2015
Bain & Company revealed the results of its 14th biennial index of 25 of the most popular management tools and trends.More than 1,000 senior executives representing companies of all sizes around the world responded to the 2015 survey, Management Tools & Trends, which found that executives are more confident in the global economy and their company's financial performance than they've been in the recent past.  As a result, they are leaning more heavily on management tools to advance their longer-term growth strategies.  Nearly half of the firms surveyed said they are looking to new tools to tackle pressing management challenges, such as increased business complexity, cyber-attacks and waning customer loyalty. 

"Our survey findings are consistent with what we have been hearing in GCC boardrooms.  Executives and directors are cautiously optimistic about the economic outlook in their industries given the latest downward trend in the oil prices, and they are looking to management tools to help grow their business coming out of the downturn," said Joe Rahi, Principal in Bain & Company's Middle East office.

KEY FINDINGS INCLUDE:
Business Challenges:While three-quarters of executives in Europe, the Middle East and Africa (EMEA) feel their firm's financial performance is strong, they cite increased complexity, the threat of cyber-attack, increased IT spending demands and the erosion of customer loyalty as front-burner challenges.

Ø  Increasing complexity: Nearly 70 percent of EMEA executives surveyed believe that increasing complexity will contribute to higher costs that will hinder company growth.

Ø  Cyber-attacks: The threat of cyber-attack remains a legitimate concern in EMEA and in the Healthcare and Financial Services sectors, which collect and utilize sensitive customer data that can be attractive to cyber-criminals.Nearly half of executives were "very concerned," the same as in 2013, but behind Asia-Pacific (74 percent) and North America (60 percent).

Ø  IT spending: 56percent of EMEA executives believe that over the next three years IT spending must increase to keep up with the rapid pace of change and to remain competitive; and40 percentfeel that current IT infrastructure, which is often burdened with legacy systems,also restrain growth - on par with North America and Latin America, but less concerned than Asia Pacific (57 percent).

Ø  Customer loyalty:  Executives continue to be concerned with customers' declining brand loyalty. Two-thirds said that customers were less loyal to brands than they used to be.

Ø  Growth strategy: Nearly two-thirdsof executives in the EMEA region surveyed believe that mergers and acquisitions will be a critical growth strategy in their industry- trailing Asia Pacific (74 percent), but ahead of North America and Latin America.

Tool Usage Trends:Companies deploy a wide and ever-shifting array of management tools to address business challenges and capture business opportunities. However, different segments weight the use and satisfaction of various tools largely based on company size, scope of effort and geography. Larger companies in EMEA use the greatest number of tools.  Executives also expressed more satisfaction when using tools for major efforts, such as full scale transformations, than programs more limited in scope.

Ø  Tool usage among EMEA executives declined slightly from 2012 - an average of  6.6 tools were used in 2014, down from 6.8

Ø  In EMEA, Disruptive Innovation Labs, customer segmentation, strategic planning and employee engagement surveys received the highest satisfaction scores; outsourcing in EMEA was the lowest score across all tools.

Ø  Among tool usage across EMEA, customer relationship management, benchmarking, outsourcing and Balanced Scorecard were rated highest; zero-based budgeting and Disruptive Innovation Labs were used least.

Ø  Founders' Mentality® was more visible in China and India (71 percent) and Latin America (64 percent) versus the U.S. (55 percent) and Europe (43 percent).  Emerging market executives are more likely to feel the principles and passions of their founders guiding their business.

Ø  EMEA executives were slightly more satisfied with the majority of tools than their North American counterparts, but less satisfied than Asia-Pacific executives, suggesting less of a focus in many of Europe's developed markets on driving aggressive company growth, compared to those in Asia's emerging markets.

Ø  Complexity Management was not a highly used tool even though increasing complexity was identified as one of most pressing business challenges in EMEA.

Ø  Established market firms continue to lean toward using more traditional tools such as Benchmarking and Employee Engagement Surveys.

Ø  Emerging market firms have been early champions of new tools such as Big Data Analytics, Digital Transformation and Disruptive Innovation Labs.

Rahi added: "With the exception of some sectors, financial performance is currently perceived as improving albeit with some challenges: insufficient insight into consumer needs is still hampering growth in some industries.  Meanwhile excessive and growing complexity still affects costs. Adaptability to continuous changes in the business environment will be a key differentiator for sustained value creators, and investment in innovation will drive long-term superior economics."

Future Tool Trends: The popularity and usage of specific management tools changes over time. Certain tools such as Customer Relationship Management and Benchmarking demonstrate consistent staying power in Europe, the Middle East and Africa (EMEA).  The data show that others, such as Total Quality Management, are used far less today than they were 20 years ago, suggesting that some tools, follow life cycles similar to many consumer products:

Ø  About 45 percent of EMEA executives surveyed say that over the next three years they will focus more on revenue growth than cost cutting.  This may be one reason for the increasing popularity of Big Data Analytics, which can help companies more effectively segment and target customers.

Ø  Established market firms continue to lean toward using more traditional tools such as Benchmarking and Employee Engagement Surveys.

Ø  Emerging market firms have been early champions of new tools such as Big Data Analytics, Digital Transformation and Disruptive Innovation Labs. 

-Ends-

About Bain & Company
Bain & Company is the management consulting firm that the world's business leaders come to when they want results. Bain advises clients on strategy, operations, technology, organization, private equity and mergers and acquisition, developing practical insights that clients act on and transferring skills that make change stick.  The firm aligns its incentives with clients by linking its fees to their results.  Bain clients have outperformed the stock market 4 to 1. Founded in 1973, Bain has 51 offices in 33 countries, and its deep expertise and client roster cross every industry and economic sector.

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© Press Release 2015