CEO concerns over global economy deepen
18 January 2016
BSI poll reveals 59% agree economic uncertainty leads to organizational compromises
Three fifths of global CEOs believe continuing economic uncertainty will lead to compromises in the ability of their organization to maintain high standards, threatening trust in their business and the companies they supply. Independent research* commissioned by BSI, the business standards company, explores the top threats to organizational resilience** , with macroeconomic uncertainty ranked top ahead of disruptive competition and information security.
The 120 CEOs polled from around the globe, reveal how fragile modern operations with global supply chains are. Two thirds (64%) of bosses admit that the concept of organizational resilience is inconsistently understood across their business, despite 70% believing it to be vital to the long-term viability of their operation.
Encouragingly 28% of CEOs are confident they secure an advantage in the market from organizational resilience, almost half (49%) claiming it enhances their company’s reputation and 39% suggesting it has improved their organization’s competitiveness through quicker and better targeted responses to opportunities. The research also found that North American firms are more than twice as likely as European firms to have boosted the quality of their products and services through organizational resilience, something that is most commonly held back by short-term financial thinking, a lack of skills and a failure to focus on the management of resilience.
Howard Kerr, Chief Executive of BSI commented: “CEOs may become so risk averse that they’re not only missing out on opportunities, but potentially undermining the long-term resilience of their organizations. Leaders need to have confidence in the ability of their team to remain agile and adaptive, while maintaining robust processes in the face of uncertainty. Ultimately today’s challenging conditions offer an opportunity to forge stronger team dynamics and delivery.”
Product quality control scandals at more specialist organizations/suppliers have led to serious repercussions for the firms they supply. For example, Honda was recently forced to recall almost 25 million cars due to issues with faulty airbags. The BSI research reveals the consequence of such activities and shows that the majority of firms both large and small worry about compromising standards. Just a quarter (24%) of CEOs at firms with revenues under $500 million per annum are totally satisfied with their organization’s quality control processes, while this rises to only a third (31%) at larger firms.
Worldwide more than half of CEOs (52%) attributed failures in organizational resilience to a lack of skills amongst their workforce. In a signal as to the importance of the issue, more than half (57%) of CEOs take personal responsibility for driving organizational resilience across their business. Just a quarter (25%) entrusted responsibility to colleagues below C-level in their seniority.
Kerr concluded: “Change must be led from the top. Organizations can be surprisingly naive, ignoring advice and best practice until they experience a setback themselves. CEO resignations aren’t just token sacrifices; they are a symptom of a wider malaise. Adapting and coping with change is a team effort, based on a culture of excellence across people, products and processes. True leaders recognize that Organizational Resilience is a strategic imperative across the whole business.”
Notes to editors
*Organizational Resilience: Building an enduring enterprise, Economist Intelligence Unit, November 2015
**BS 65000 – Guidance on organizational resilience defines Organizational Resilience as ‘the ability of an organization to anticipate, prepare for, respond and adapt to incremental change and sudden disruptions in order to survive and thrive.’