bb management tools 2001 global results

7/30/2019 BB Management Tools 2001 Global Results

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M an ag e m e n t

t o o ls 2 0 0 1 g lo b al r esu l t s

Darrell K. Rigby i s a direct or o f Bain &

Com pany and foun der of Bain's

Managem ent Too ls Survey. Bain &

Com pany' s 2001 Managem ent Too ls &

Techniq ues survey pr of iles t he usage

and effectiven ess of m anagemen t

t ools among 451 com panies in 22

countries around th e world.

Ex e c u t i v e s v o t e f o r t r i e d & t r u e t o o l s t o

n a v ig a t e d o w n t u r n

If soft sales following a year of chaotic growth have your company

wh ipsawing from expansion to layoffs, you'll appreciate the insights

of 451 senior executives from around the world who responded toBain & Co mp any's 8th annual Managemen t Tools Survey. T his year,

respondents opted for tried-and-true tools to m anage the fundamentals

of cost and corporate direction. M eanwhile, executives defected

at up to four times the meanfrom new economy tools like

C or porate Ventur ing and C ustomer R elationship M anagement,

once thought to provide quick and easy paths to growth.

T he survey (See figure 1) examined t he u sage, satisfaction and

effectiveness, across more than 30 industries, of 25 management tools

widely used in 2000.

By Darrell K. Rigby

0

20

40

60

80

100%5,615 451

North

America

Europe

Asia

SouthAmerica

Other

1993-2000 2000

Figure 1: Eight years of data and 5,600 respond ents

A n n u a l su r v e y o f s e n i o r e x e c u t i v e s


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2

Sixty-on e percent of responden ts reported, wh en

they cast their votes in early 2001, that they were

concerned about an economic slowdown this year.

W ithin this con text, respon ses show executives

continue to focus on improving the financial

perform ance of their companies. But four-o ut-

of-t en com panies th at set up Corporate Venturing

fun ds, often to take stakes in, or create Intern et

startups, abandoned the tool.

The most widely used tools by senior managers

in 2000 remain the same as in 1999.

St r a t e g i c P l a n n i n g 7 6 %

M issio n & Visio n St a t e m e n t s 7 0 %

Ben ch m ar kin g 6 9%

H owever, senior execut ives widely endo rsed all of

the top 10 tools. (See figure 2)

Each of these tools has been used by nearly half the

corporate population in each of the eight years that

Bain has captured data on their use. Its clear that when

times get tou gh, we tru st th e familiar. M anagers are

falling back on widely understood tools that have

helped them in the past. And all tools fare better whenthey are part of a major corporate effort. N inet y

percent of managers agreed that tools need top-down

support to succeed.

N e w e c o n o m y t o o l s f a l t e r

Meanwhile, only a third or fewer respondents adop ted

the new economy tools mo st frequently cited in

the press, including:

Market Disruption Analysis, used to identify where

to launch new businesses to compete with startups,

Corporate Venturing, used to build those new

businesses with ventu re capital disciplines, often

in hopes of creating a public spin-off,

Customer R elationship M anagement (CR M),

which aspires to turn Internet technology toward

identifying and retaining valuable customers.

T hese three also posted the lowest satisfaction ratings

and among the h ighest defections. For example,42% of users abandon ed C or porate Ventu ring

in 2000, versus an 11% average defection rate for

all tools. T hirty-nine percent o f users dropped

M arket Disruption Analysis, and 18% defected from

C R M . Follow-up interviews with survey respondents

showed that these tools proved tricky to implement.

In the case of Corporate Venturing, respondents said

0.0 0.2 0.4 0.6 0.8

Strategic planning

Mission & vision statements

Benchmarking

Outsourcing

Customer satisfaction measures

Growth strategies

Strategic alliances

Pay-for-performance

Customer segmentation

Core competencies

Total quality managementCycle time reduction

Reengineering

Balanced scorecard

Customer relationship mgmt

Scenario planning

Shareholder value analysis

Supply chain integration

Knowledge management

Activity-based management

One-to-one marketing

Merger integration teams

Corporate venturing

Real options analysis

Market disruption analysis

Mean 41%

Out of 100%

0.76

0.08

0.09

0.14

0.26

0.28

0.31

0.32

0.32

0.32

0.33

0.35

0.36

0.38

0.390.41

0.48

0.51

0.52

0.53

0.55

0.60

0.63

0.69

0.7

Figure 2: Tool usage rates

B ai n & C o m p a n y , I n c . M a n a g e m e n t t o o l s 2 0 0 1


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3

their companies had trouble mastering the venture-

capital disciplines required to succeed, including

managing a swift exit from ventures that failed to achieve

financial targets. (See figure 3)

B u t h u n g e r f o r e - c o m m e r c e re m a in s h ig h

D espite dissatisfaction w ith tren dy too ls, 73% of

respondents said they wanted to stay on the cutting

edge of tools and techn iques, even thou gh 77% felt

mo st tools promise more than they deliver. T his

seemed particularly true in e-comm erce. Althou gh

new econ omy too ls netted low ratings, 62% of

executives said they felt their company was not

taking full advantage of the Internet. O nly 11%

agreed their company had spent too much money

on e-com merce initiatives, wh ile 69% disagreed.

Forty-nine percent of respondents said they were

aggressively expanding their e-commerce offerings.

Meanwhile, only 23% of managers agreed it was fun

to watch the do t-coms fail, and 44% disagreed that

almost all young entrepreneurs lack the expertise

necessary to build great com panies, versus 34%

wh o agreed.

If this means theres still a place for young visionar ies

to create radical offerings, please no te th eyll be

wanting cold cash for their efforts:59% o f e xec u tives

said their managers want cash compensationnot

mo re stock o ptions, versus 21% wh o disagreed.

And executives wou ld like to hedge their bets, too :

39% said their company would deliver better long-

term results as a private com panyw ithout pressure

from shareholders over quarterly earnings.

0.0 0.1 0.2 0.3 0.4 0.5

Corporate venturing





Reengineering



Total quality management


Knowledge managementScenario planning


Balanced scorecard

Core competencies


Growth strategies

Strategic alliances

Cycle time reduction

Pay-for-performance

Benchmarking



Outsourcing

Strategic planning

Mean 11%

0.42

0.04

0.05

0.06

0.07

0.07

0.07

0.07

0.07

0.08

0.08

0.1

0.11

0.11

0.110.12

0.12

0.12

0.13

0.15

0.17

0.18

0.21

0.32

0.39

Out of 100%

B ai n & C o m p a n y l au n ch e d a m u l t i - yea r r e se ar ch p r o j ec t i n 1 9 9 3 t o g a t h e r f a ct s a b o u t m an a g e m e n t t o o l s,

a n d t o t r a ck t h e i r u se. Th e o b j ec t i ve w as an d co n t i n u e s t o b e t o p r o v id e m a n ag e r s w i t h t h e i n f o r m a t io n

t h e y n e e d t o i d e n t i f y, se le c t , im p l e me n t a n d i n t e g r a t e t h e t o o l s t h a t w i l l i mp r o ve b o t t o m l in e r e su lt s .

Ove r t h e p a st e i g h t ye ar s , Ba in h a s a sse mb l e d a d a t a b ase t h a t n o w i n c lu d e s o ve r 5 , 6 00 se n i o r m a n ag e r

r e sp o n d e n t s f r o m m o r e t h a n 2 0 co u n t r i e s in N o r t h A m e r i ca, Eu r o p e , A si a, Af r i ca an d So u t h A m e r i ca.

Figure 3: Tool defection rates

B ai n & C o m p a n y , I n c . M a n a g e m e n t t o o l s 2 0 0 1


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BAIN & CO MPANY, INC.

Two Copley Place

Bosto n, Massachuset t s 02116

1 (617) 572 2000

Ri g h t t o o l c a n n e t r e s u l t s

M eanwh ile, executives said satisfaction with too ls

varied with the job. M uch as hammers are good

at banging nails, but poo r at trimmin g hedges,

differen t management too ls proved mo re and less

useful at achieving different goals. Tools generating

the most satisfaction for achieving financial results

(the nu mber one goal of 64% of respon dents)

included Pay-for- Perform ance, Shareholder Value

Analysis, and Cycle T ime R eduction. Tools best

at growing customer equity included Customer

Satisfaction Measurement,Total Q uality M anagement

(TQ M ), and, despite eliciting high dissatisfaction

overall, C R M . To improve competitive positioning,

those surveyed vouched for Strategic Planning,TQ M,

and Strategic Alliances. (See figure 4)

To bolster long-term perform ance, respondents

expressed highest satisfaction with Strategic Plannin g,

Cycle-Time Reduction and TQ M. And to strengthen

integration effort s across an organization, executives

voted for Strategic Planning, T Q M and M ission

and Vision Statements.

O verall, executives are focusing on slightly fewer tools

this year than last. T he average num ber of tools

employed has decreased slightly to 10.6 from 10.9.

Still, executives aspirations for using tools remain high.

And well they shou ld. O nly 25% of responden ts

thou ght todays market leaders will still be leaders

five years from now. By this score, turbulence is

poised to beco me the steady state of business, and

executives will need all the sound , navigational

equipment they can muster.

3 3.5 4 4.5

Pay-for-performance

Strategic planning


Cycle time reduction


Balanced scorecard




Total quality management



Benchmarking


Scenario planning

Reengineering


Core competencies

Outsourcing

Growth strategies

Strategic alliances



Knowledge management

Corporate venturing

Mean 3.87

4.1

3.47

3.61

3.62

3.67

3.74

3.78

3.8

3.83

3.85

3.86

3.87

3.87

3.89

3.9

3.91

3.91

3.92

3.92

3.94

3.96

3.97

3.99

3.99

4.06

Out of 5

Figure 4: Tool satisfaction rates

Amsterdam Atlanta Beijing Boston Brussels Chicago Dallas Hong Kong Johannesburg London Los Angeles Madrid Mexico City

Milan Munich New York Paris Rome San Francisco So Paulo Seoul Singapore Stockholm Sydney Tokyo Toronto Zurich

bb management tools 2001 global results

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