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Message to Industrial Leaders
from Stanton Chase
Welcome to the
Stanton Chase International
1st Annual Global Industrial
Executive Survey.
Stanton Chase consultants work with industrial firms around the world, and
we have heard many leaders give their perceptions about industry trends and
pressures. We thought it would be useful to try and investigate some of the
challenging questions and issues you are talking about.
Is the pace of business getting faster?
Is it harder than ever to keep pace with the competition?
Are decisions becoming more complex?
Are customers more demanding?
Are executive teams struggling to be capable and equipped for todays challenges?
Do executives feel the heat in challenging times?
So we decided to do our own research and found out that the answer to all of these
questions is YES! We engaged with nearly 500 executives to discover the collective
wisdom of industrial sector leadership from around the world.
This White Paper provides some insights from you and for you. The senior business
leaders who participated have helped us take a look behind the wall of the boardroom.
The report contains information about your investment strategies, your way of recruiting
new talents and executives and your priorities and directions in building and growing
your businesses in todays hyper-competitive global business environment.
Our sincere thanks and appreciation to everyone who participated in the survey.
If you would like to follow up on anything in this report, please visit
www.stantonchase.com and/or contact your local Stanton Chase office.
Mickey Matthews
Vice Chairman
Baltimore/Washington, USA
Dieter Hagmann
Partner
Zurich, Switzerland
Bernard Layton
Partner
Chicago, USA
Jan Duniec
Partner
Warsaw, Poland
SC Insights
Stanton Chase
Insights
2013 Global Industrial Strategy Survey:
Leadership Strategies for Accelerating Growth
COntents
Executive Summary
1. Findings
A. Positive Outlook
D. Technology
E. Reshoring
2. Analysis
10
13
15
3. Recommendations
11
17
17
4. Methodology
19
21
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Stanton Chase
Insights
Executive Summary
Despite intense global competition, the international industrial sector has a positive
outlook and appears to be undergoing a form of resurgence, though leadership
challenges are presenting a roadblock. The evidence for this is in four trends.
1. Focus on Organic Growth
There is a shift away from growth by acquisition, and a shift towards organic growth
driven by investments in core business and related core competencies. Firms are investing in new markets, new products and technology financed by bank and debt financing.
2. Strategic Investments in Technology
Investments in technology are driven by goals in core competency development,
customer experience, and quality/efficiency. These include investments in Customer
Relationship Management (CRM), research and development, supply chain management
and manufacturing robotics and automation.
3. Reshoring
While offshoring of manufacturing is still going on, a reshoring trend has started.
Firms in developed markets see reshoring opportunities especially for sophisticated
and technology-intensive products.
4. Significant Leadership and Management Challenges
Firms acknowledge a continuing shortage of leadership talent citing deficits in
vision and strategic thinking, entrepreneurship and creative thinking, and general
management skills. Industrial firms are particularly challenged by the shortage in
engineering talent, especially with business skills. There appear to be underlying
issues in the education, preparation and development of leaders, and a heightened
interest in honesty and integrity.
SC Insights
Stanton Chase
Insights
Executive Summary
KEY FINDINGS
Positive Outlook
74% of respondents assessed the current economic climate
as the same or better than last year
64% are optimistic or very optimistic that 2014 will be better than 2013
Top 3 Challenges impeding Corporate Growth
1. Global Competition
2. Shortage of Leadership Talent
3. New Product Development
Top 3 Areas for Capital Deployment
1. New Product Development
2. New Markets
3. Technology
Top 3 Areas for Technology Investments
1. CRM
2. Research and Development
3. Supply Chain Management
Top 3 Motivators for Reshoring
1. Quality
2. Cost
3. Customer Responsiveness
Top 3 Leadership Deficits
1. Lack of Leadership/Vision/Strategic Thinking
2. Lack of Entrepreneurship and Creative Thinking
3. Lack of Management Skills
Top 3 Talent Deficits
1. General Management
2. Engineering (specifically those possessing sales and business acumen capabilities)
3. Sales and Marketing
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Stanton Chase
Insights
Executive Summary
ANALYSIS
Core Competencies Support Organic Growth
57% of respondents rated new product development high for new investment
Companies are following an organic growth investment strategy versus
an acquisition strategy
Companies are focusing on core competencies as key to supporting
this organic growth
Customer experience and big data are emerging priorities which also drive
organic growth
The top technology investments are part of both the core competency focus and
renewed customer focus
Technology investments in manufacturing and supply chain management can also
be seen as part of a conscious effort to increase their ability to be effective, efficient
and quality-focused
The Industrial Reshoring Option
35% of respondents see a trend toward reshoring. This result could be interpreted as
very significant as it implies a real trend and action on the return of manufacturing to
home countries
The primary reasons given for a reshoring decision are quality and cost
Reshoring may also be part of the same customer-focused strategy that placed CRM as
the top technology investment. Customer-influenced factors of quality, logistical cost
and agile supply chains may be critical drivers for reshoring strategies and decisions
There may also be specific economic advantages to reshoring highly-engineered
technical products
Global Leadership Shortage
Over 70% of respondents identified the global leadership shortage as a primary road
block to corporate growth
Honesty and integrity have emerged as highly sought qualities
Engineers, particularly those with business skills, continue to be the
highest in-demand function
There is consensus that continuous learning and project team involvement will be
used to support leadership development, but these seem like status quo approaches
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Insights
Executive Summary
Recommendations
To be successful companies should:
Implement executive mentoring programs focused on General Management
and Engineering talent
Implement corporate-wide leadership training with an emphasis on strategic
thinking, execution, delivery, honesty and integrity
Consider embracing entrepreneurial strategies and/or look to hire from smaller
companies that have proven track records in this area
Looking at the survey as a whole, industrial firms need to consider
a range of factors moving forward. Successful firms will:
Follow the money staying close to their customers and exceeding their
expectations. Deep customer relationships etched in over time will create
mutual value and profit
Hire and develop strong, entrepreneurial and high integrity leadership.
Develop and mentor their talent
Evaluate and invest in core competencies such as CRM and Supply Chain
Management, the most efficient and effective methods of making and
delivering products, and building sustainable customer relationships
None of this will happen without leadership. The most successful companies will execute
best of breed leadership programs globally that are agile, nimble and responsive and will
incent, excite and motivate their executives with a defined career trajectory that is fluid
and compelling.
SC Insights
Stanton Chase
Insights
1. FINDINGS
A. Positive Outlook
Respondents showed a generally positive outlook for the global industrial sector.
For the current year, 74% thought their business was performing either better
(36%) or the same (38%) as last year
For the future, 64% were either optimistic (58%) or very optimistic (6%) about
economic and business growth over the next 12 months
B. Top Three Challenges to Growth
The top three challenges for achieving corporate growth
were identified by respondents to be:
1. Global Competition
2. Shortage of Leadership Talent
3. New Product Development Pipeline
4.49
Shortage of
Leadership Talent
4.27
New Product
Development
Pipeline
4.06
Technology
Investment and/or
Implementation
3.97
Government
Regulatory Issues
3.96
Investment
Capital
3.95
Manufacturing
Constraints
Global Competition
51% ranked it high
21% gave it the highest ranking
3.29
2.5
3.0
3.5
4.0
4.5
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Stanton Chase
Insights
1. FINDINGS
Capital Deployment
New Product Development
4.67
New Markets
4.44
Technology
3.94
3.85
3.84
3.75
Acquisitions
3.51
3.0
3.5
4.0
4.5
5.0
Regional Growth
The Asia/Pacific Region was identified as presenting the highest growth opportunity.
Middle East:
Asia/Pacific:
49% ranked it high
70% ranked it high
Europe:
North America:
48% ranked it high
52% ranked it high
Africa:
South America:
30% ranked it high
49% ranked it high
6
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Stanton Chase
Insights
1. FINDINGS
D. Technology
Impact of Technology
Technology investment and implementation was ranked as the fourth challenge to growth.
Top four areas for technology investment
1. CRM
2. Research and Development
3. Supply Chain Management
4. Manufacturing (robotics, automation)
Customer Relationship Management
65% ranked it as high impact
54% ranked it high for investment
Research and Development
61% ranked it as high impact
28% gave it the highest ranking
Supply Chain
57% ranked it as high impact
53% ranked it high for investment
E. Reshoring
More than a third of respondents see a trend towards reshoring (moving some
manufacturing back to home-country locations).
Top three motivators for a
reshoring decision
1. Quality
2. Cost
3. Customer Responsiveness
Security, location and politics ranked 4th,
5th and 6th respectively.
4.47
Cost
4.18
Customer
Responsiveness
3.63
Security
3.15
Location
3.06
Political
Environment
2.51
2.0
2.5
3.0
3.5
4.0
4.5
5.0
SC Insights
Stanton Chase
Insights
1. FINDINGS
Challenges Challenges
In Your Global
Human
In Your
GlobalCapital
Human Capital
Lack of
Leadership /
Vision / Strategic
Thinking
0.71
Lack of
Entrepreneurship
and Creative
Thinking
0.66
Lack of
Management
Skills
0.55
People
Development
0.46
Overall
Talent
Shortage
0.39
Diversity
0.24
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
5.38
Engineering
4.93
4.62
4.01
Finance
3.20
IT
2.97
Human Resources
2.89
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
SC Insights
Stanton Chase
Insights
1. FINDINGS
47.8%
Execution &
Delivery
47.1%
Honesty &
Integrity
45.4%
People
Management
37.1%
Innovative Ideas
& Ability
33.5%
Industry
Knowledge
30.8%
Change
Management
25.7%
Functional
Capabilities
18.4%
Multicultural
Sensitivities
14.1%
10.0%
20.0%
30.0%
40.0%
50.0%
The key characteristic sought in hiring local executives is local knowledge and
contacts. The top three other desired characteristics for hiring local executives are:
Proven track record
Ability to work and communicate with headquarters
Industry knowledge
Strategies Your Company Implements
To Ensure Upward Professional Mobility
Continuous Learning
3.53
3.5
2.86
2.75
Take Risks
Engage with a Mentor
2.37
2.0
2.5
3.0
3.5
4.0
SC Insights
Stanton Chase
Insights
2. ANALYSIS
Despite intense global competition, the international industrial sector has a positive
outlook and appears to be undergoing a form of resurgence, though leadership
challenges are presenting a roadblock. The evidence for this is in four trends.
1. Focus on Organic Growth
There is a shift away from growth by acquisition, and a shift towards organic growth driven
by investments in core business and related core competencies. Firms are investing in new
markets, new products and technology financed by bank and debt financing.
2. Strategic Investments in Technology
Investments in technology are driven by goals in core competency development,
customer experience, and quality/efficiency. These include investments in CRM,
research and development, supply chain management and manufacturing robotics
and automation.
3. Reshoring
While offshoring of manufacturing is still going on, a reshoring trend has started.
Firms in developed markets see reshoring opportunities especially for sophisticated
and technology-intensive products.
4. Significant Leadership and Management Challenges
Firms acknowledge a continuing shortage of leadership talent citing deficits in
vision and strategic thinking, entrepreneurship and creative thinking, and general
management skills. Industrial firms are particularly challenged by the shortage in
engineering talent, especially with business skills. There appear to be underlying
issues in the education, preparation and development of leaders, and a heightened
interest in honesty and integrity.
10
SC Insights
Stanton Chase
Insights
2. ANALYSIS
11
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Stanton Chase
Insights
2. ANALYSIS
12
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Stanton Chase
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2. ANALYSIS
13
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Stanton Chase
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2. ANALYSIS
14
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2. ANALYSIS
15
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Stanton Chase
Insights
2. ANALYSIS
16
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Insights
3. RECOMMENDATIONS
17
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Insights
3. RECOMMENDATIONS
18
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Stanton Chase
Insights
4. Methodology
Survey Respondents
Role
50% Executive P&L Management
Operations
5.1%
Engineering
3.1%
Technology
2.2%
Sales &
Marketing
11.6%
Executive P&L
Management
(CEO, COO,
Division
President)
50.2%
Human
Resources
10.4%
Finance,
5.8%
Board Directors
11.6%
Sector
Representation Across Industry
Diversified,
11.5%
Aerospace &
Defense,
8.3%
Automotive,
13.6%
Chemicals,
9.5%
Mining,
4.1%
Industrial
Equipment and
Components
21.3%
19
Electric or
Electronic
Equipment and
Power Generation
13.3%
Engineering,
Construction and
Building Materials
23.7%
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Stanton Chase
Insights
4. Methodology
Survey Respondents
Size of Firm
33% Greater Than $1Billion
$5B+,
17.2%
Under $100M,
30.3%
$1B - $5B,
16.9%
$501M - $1B,
11.4%
$101M - $500M,
24.1%
Ownership
40 % PubliclyTraded
Private Equity or
Venture Backed,
9.9%
Publicly Traded,
38.1%
Privately Owned,
52.0%
20
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Insights
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Services
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A successful and rapid project methodology for search and recruitment
of the best leaders worldwide
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Using the latest methodology for the identification, motivation and assessment
of competencies and personality profiles
Leadership consulting for boards and C-suite
Diversity search responding to client multi-cultural needs
Stanton Chase is ranked within the
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21
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