"Tried and True" Beats Out "New Economy" Tools by 2:1 in Bain & Company's 8th Annual 'Management Tools' Survey.Business Editors BOSTON--(BUSINESS WIRE)--June 13, 2001 Still, More Than 70% of Senior Executives Still Believe Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the is Not Fully Exploited If soft sales following a year of chaotic growth have your company whipsawing from diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. to focus, or from expansion to layoffs, you'll you'll Contraction of you will. you'll you will or you shall you'll will appreciate the insights of 245 senior North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. executives who responded to Bain n. 1. A bath; a bagnio. & Company's 8th Annual "Management Tools Survey." The survey examined the usage, satisfaction and effectiveness of 25 widely used management tools in 2000 among senior executives across more than 30 industries. This year's results revealed that executives are opting for classic, "tried-and-true" management tools to address fundamentals of cost and corporate direction over "new economy" tools by better than a 2:1 margin. The trend is accelerating as executives have defected at up to five times the mean from new economy tools like Corporate Venturing and Customer Relationship Management (CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. ), once thought to provide quick and easy paths to growth. Nearly half the executives who set up Corporate Venturing funds, for example, (often to take stakes in, or create Internet start ups) abandoned the tool, one of the highest defection rates in the survey's history. Defections from six "new economy" tools in the survey, averaged 20%, more than twice the rate of abandonment from remaining tools, which have long been part of managers' toolkits. "During a year when executives jumped on the Internet bandwagon band·wag·on n. 1. An elaborately decorated wagon used to transport musicians in a parade. 2. Informal A cause or party that attracts increasing numbers of adherents: to seek quick and easy growth, they found no new tool paved pave tr.v. paved, pav·ing, paves 1. To cover with a pavement. 2. To cover uniformly, as if with pavement. 3. To be or compose the pavement of. the road to riches," said Darrell There are many well-known people named Darrell, including: In sports:
consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , Bain & Company, and founder of the Tools Survey. The most widely used tools cited by senior managers in 2000 remain the same as in 1999. They are: - The most widely-used tools remain the same as in 1999: - Strategic Planning (80%) - Mission and Vision Statements (76%) - Benchmarking (68%) - In 2000, the tools with the highest usage and satisfaction were basic concepts that focused on the fundamentals - minimizing costs, maximizing customer value and navigating economic turbulence. - Respondents attitudes reflect their concern in regards to the changing economy: - 73% of respondents are concerned about the economic slowdown in 2001 (12 % disagree) - 65% state that financial results are the top priority - 56% believe that their managers preferred more cash compensation over stock options (21% disagree) - 53% agree that the increased pace of change has made it difficult to make long-term decisions (33% disagree) - 41% believe that their company would deliver better long-term results as a private company (23% disagree) - Firms recognize the value of tools, however, they remain skeptical of tools that over promise and under deliver. - 81% believe that most management tools promise more than they deliver. (7% disagree) - Only 27% of respondents believe that most management tools they've used have not been very successful. (34% disagree). - Despite the economic downtown, most firms still believe in the value of e-commerce - 77% of respondents believe that one of their major challenges is getting their managers to adapt to new ways of doing business (11% disagree) - 70% agree that their company is not taking full advantage of the Internet (16% disagree) - 51% say that they are aggressively expanding their e-commerce capabilities (24% disagree) - Only 11% believe that their company has spent too much on e-commerce initiatives (69% disagree) And among the top 10 tools, cost management techniques like outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. moved up in usage. However, all of the top 10 tools have extensive endorsements: they have been used by, at minimum, nearly half of the corporate population in each of the eight years Bain has captured data on their usage. "The data shows that when times gets tough, we trust the familiar: managers fall back on widely understood tools that have been successful for them in the past," said Rigby. "You have to recognize that tools are just tools, but they do have an impact when they are used as part of a major corporate effort." Hunger for E-Commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. Soars The survey finds that the Web is far from dead in the corporate world. Seven out of ten executives said that their companies have yet to fully exploit the Internet - and only 11% thought their companies had overspent on e-commerce, while 69% disagreed. Fifty-one percent said they were aggressively expanding their e-commerce offerings. Approximately only a quarter of respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. agreed it was "fun to watch the dot-coms fail," while 44% disagreed that "almost all young entrepreneurs lack the expertise necessary to build great companies," versus 30% who agreed. Three 'New Economy' Tools Are Turnoffs Meanwhile, less than a third of respondents adopted the "new economy tools" most frequently cited in the press, including: - Market Disruption Market Disruption A situation where markets cease to function in a regular manner, typically characterized by rapid and large market declines. Market disruptions can result from both physical threats to the stock exchange or a unusual trading (as in a crash). Analysis, used to identify changes in the competitive landscape, such as a new technology, that can rapidly shift customer preferences and threaten core businesses; - Corporate Venturing, used to build new businesses with venture capital disciplines, often in hopes of creating public spin-offs; - Customer Relationship Management, which aspires to turn technology toward identifying and retaining valuable customers. These three also posted the lowest satisfaction ratings and are among the highest in defections. For example, 45% of users abandoned Corporate Venturing in 2000 versus 9% for tools on average. Twenty-nine percent dropped Market Disruption Analysis and 19% of users defected from CRM. Other "new economy" tools surveyed included Knowledge Management, One-to-One Marketing and Supply Chain Integration. "We know that people are still hooked hooked adverb Addicted on growth," says Rigby, "But some of the tools and techniques that people thought were going to supply easy solutions aren't panning out, and people are saying. 'I think this is a lesson I've learned before: diversification is dangerous.'" Most Tools Face Unrealistic Expectations Despite dissatisfaction with some tools, 72% of respondents said they wanted to stay on the cutting edge of tools (the average company used 10 of the top 25 tools in 2000 alone), even though 81% feel that most management tools promise more than they deliver. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Rigby, the biggest problem with tools is most executives have unrealistic expectations of their performance, so they shift efforts from one new tool to another. The Right Tool Can Net Results Meanwhile, executives said satisfaction with tools varied with the job. Much as hammers are effective tools for driving nails, but poor at trimming hedges, different management tools proved both more and less useful at achieving different goals. Tools generating the most satisfaction for achieving financial results (the number one priority of 65% of respondents) included Cycle-Time-Reduction, Pay-for-Performance and Strategic Planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. . Tools best at growing customer equity included Customer Satisfaction Measurement, Total Quality Management, Customer Relationship Marketing and One-to-One Marketing. To improve competitive positioning, those surveyed vouched for Strategic Planning, Strategic Alliances and Customer Satisfaction Measurement. To grow long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. performance capabilities, respondents expressed highest satisfaction with Strategic Planning, Cycle-Time Reduction and Growth Strategies. And to bolster This article is about the pillow called a bolster. For other meanings of the word "bolster", see bolster (disambiguation). A bolster (etymology: Middle English, derived from Old English, and before that the Germanic word bulgstraz integration efforts across an organization, executives voted for Strategic Planning, Balanced Scorecard Balanced Scorecard A performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes. The balanced scorecard attempts to measure and provide feedback to organizations in order to assist in implementing and Mission & Vision Statements. Overall, executives are focusing on slightly fewer tools this year than last, with the average number employed down from 11.4 to 10.4. Nearly every year since Bain began the "Management Tools Survey," the actual use of tools has fallen short of the forecasted use from the previous year's study. This suggests that companies may drop a tool when it disappoints, or use repeatedly those that satisfy. Still, executives' aspirations aspirations npl → aspiraciones fpl (= ambition); ambición f aspirations npl (= hopes, ambition) → aspirations fpl for using tools remain high. And well they should. Only 22% of respondents thought today's market leaders will still be leaders five years from now. By this score, turbulence turbulence, state of violent or agitated behavior in a fluid. Turbulent behavior is characteristic of systems of large numbers of particles, and its unpredictability and randomness has long thwarted attempts to fully understand it, even with such powerful tools as is poised to become the steady state of business, and executives will need all the sound, navigational equipment they can muster TO MUSTER, mar. law. By this term is understood to collect together and exhibit soldiers and their arms; it also signifies to employ recruits and put their names down in a book to enroll them. . About Bain & Company, Inc. Bain & Company is one of the world's leading global business consulting firms, serving clients across six continents Six Continents is a large retail PLC in UK which split into Six Continents Retail known as Mitchells and Butlers plc. The hotels and soft drinks business of Six Continents PLC is now known as InterContinental Hotels Group PLC. . It was founded in 1973 on the principle that consultants must measure their success in terms of their clients' financial results. Bain's clients have out performed the stock market 3 to1. With headquarters in Boston and offices in all major cities throughout the world, Bain has worked with over 2,000 major multinational and other corporations from every economic sector, in every region of the world. For more information visit www.Bain.com. TOOLS 2000 SURVEY FACT SHEET Background Bain & Company launched a multi-year research project in 1993 to gather facts about management tools, and to track their use. The objective was and continues to be to provide managers with the information they need to identify, select, implement and integrate the tools that will improve bottom line results. Over the past eight years, Bain has assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. a database that now includes over 5,600 senior manager respondents from over 20 countries in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe, Asia, Africa and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. . 2000 Survey This year, Bain received 451 completed surveys from executives in 22 countries. The most significant sample of respondents came from North American, 245, and results cited above are based on that group's responses. Bain also conducted personal follow-up follow-up, n the process of monitoring the progress of a patient after a period of active treatment. follow-up subsequent. follow-up plan interviews to further probe the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or under which tools are most likely to produce desired results. The respondents represent a full range of industries, company sizes and financial returns. This year, Bain focused on 25 of the most popular tools and techniques, including the following: Activity-Based Management Balanced Scorecard Benchmarking Core Competencies Corporate Venturing * Customer Relationship Management * Customer Satisfaction Measurement Customer Segmentation Cycle Time Reduction Growth Strategies Knowledge Management Market Disruption Merger Integration Teams Mission and Vision Statements One-to-One Marketing Outsourcing Pay-for-Performance Real Options Analysis Reengineering Scenario Planning Shareholder Value Analysis Strategic Alliances Strategic Planning Supply Chain Integration Total Quality Management Results - The most widely-used tools remain the same as in 1999: - Strategic Planning (80%) - Mission and Vision Statements (76%) - Benchmarking (68%) - In 2000, the tools with the highest usage and satisfaction were basic concepts that focused on the fundamentals - minimizing costs, maximizing customer value and navigating economic turbulence. - Respondents attitudes reflect their concern in regards to the changing economy: - 73% of respondents are concerned about the economic slowdown in 2001 (12 % disagree) - 65% state that financial results are the top priority - 56% believe that their managers preferred more cash compensation over stock options (21% disagree) - 53% agree that the increased pace of change has made it difficult to make long-term decisions (33% disagree) - 41% believe that their company would deliver better long-term results as a private company (23% disagree) - Firms recognize the value of tools, however, they remain skeptical of tools that over promise and under deliver. - 81% believe that most management tools promise more than they deliver. (7% disagree) - Only 27% of respondents believe that most management tools they've used have not been very successful. (34% disagree). - Despite the economic downtown, most firms still believe in the value of e-commerce - 77% of respondents believe that one of their major challenges is getting their managers to adapt to new ways of doing business (11% disagree) - 70% agree that their company is not taking full advantage of the Internet (16% disagree) - 51% say that they are aggressively expanding their e-commerce capabilities (24% disagree) - Only 11% believe that their company has spent too much on e-commerce initiatives (69% disagree) To request a complete set of survey results or graphs please e-mail Cheryl Krauss at cheryl.krauss@bain.com or Cristina Paquette at cristina.paquette@bain.com. |
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