Aligning risk to performance and integrating risk at a business unit level are part of eight strategic imperatives that will play determining factors in their short- and long-term success following the economic crisis, according to a new report from PricewaterhouseCoopers LLP (PwC).
The report, titled 10Minutes on Competitive Advantage, includes information and insights from PwC's Global CEO Survey and its US-focused report, as well as interviews with thousands of PwC clients.
1. Sustain cost-reduction measures in order to improve margins with a smaller, more productive workforce and use newly freed resources for investments in the company's future.
2. Align risk to performance and create individual accountability measures by integrating risk at a business unit level and creating more personal accountability and reward structures.
3. Prepare for major regulatory changes through a cross-section of issuesinternational tax frameworks, infrastructure development, healthcare costs and environmental policies.
4. Enhance trust in your business through voluntary disclosures or independent verifications in areas such as supply chain integrity, measurement of carbon emissions and data integrity, to satisfy discerning stakeholders who now demand greater levels of transparency when making decisions about where to invest.
5. Make technology a strategic asset and competitive differentiator by increasing your investment in technology infrastructure and applications.
6. Leverage innovation to underscore differentiation, especially around hot-button global issues such as sustainability and climate change.
7. Move forward with deferred transactions and deals to help grow, protect value, and capture benefits of scale, productivity and efficiency.
8. Invest in leadership, talent development and deployment of for your employees, starting with the C-Suite.
Specifically, PwC's CEO survey found that as businesses begin to emerge from the recession, boards in the US are becoming more actively engaged in risk, performance management and strategic decision making. 71 percent said their boards are becoming more engaged with strategic risk; 58 percent reported that they are more focused on long-term key performance indicators.
US CEOs also said their greatest concern going forward is about the prospect of overregulation, followed by shifts in consumer behaviors.
Interestingly, these concerns weigh more heavily in the US than elsewhere: 71 percent of US CEOs are either somewhat or extremely concerned about overregulation compared to 60 percent of global CEOs; 62 percent of US CEOs worry about changing consumer behaviors compared to 48 percent of global CEOs.
The eight-page summary report is available here.