GLOBAL CXO OUTLOOK
Growth Strategies for 2012 and Beyond
Rajan Kohli
CMO -Wipro Global IT Business
Dear friends,
friends,
Dear
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technology access, and limited access to global resources (capital, talent, natural resources) have given way to a world
boundaries. Instead, companies operating in different geographies and industries are now confronted with a fresh set of
without boundaries. Instead, companies operating in different geographies and industries are now confronted
challenges that mainly stem from the competitive global business regime, alongside the call for sustainable development.
with a fresh set of challenges that mainly stem from the competitive global business regime alongside the call for
sustainable
development.
Building Growth
Strategies for 2012 and Beyond, the theme of our first Global CXO study, is an onerous task that may be
accomplished with a careful analysis of the key imperatives of global growth and development that can help organizations
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a careful analysis
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enterprises,
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ence organizations
in emerging markets
India and
China.
executives at global enterprises, underscores three key imperatives, namely, strategic innovation, adoption of green
The findings
this survey,
conducted
by Forbesmarkets,
Insightssuch
in association
withChina.
Wipro, amplify the key factors that underpin
practices,
and of
meaningful
presence
in emerging
as, India and
the imperatives as well their inter-connectedness. This could serve as actionable input in CXO decision-making. Let me
now share
my of
views
the three
key imperatives:
The
findings
this on
study,
conducted
by Wipro, in association with Forbes Insights, amplify the key factors that
underpin the imperatives as well their inter-connectedness. This could serve as actionable inputs in CXO decision
Strategic innovation
making. Let me now share my views on the three key imperatives:
Managing top- and bottom-line performance remains the top business priority of CXOs around the globe. However, in
working towards this objective, business leadership would be called upon to place a premium on strategic innovation,
Strategic
which willInnovation:
act as the true differentiator in the competitive business arena. Innovate or perish is the dictum.
Managing the top and bottom line performance remains the top business priority of CXOs around the globe. However,
in
towards
objective,
business
leadership
be business
called upon
to place
premium
on strategic
innovation
In working
earlier days,
R&Dthis
was
among the
first casualties
inwould
times of
distress.
But awith
innovation
acquiring
a strategic
which
will act as the
true
differentiator
thefocus
competitive
businesswhen
arena.the
Innovate
or down.
perish is
the dictum.
focus, companies
have
begun
to sharpeninthe
on innovation
chips are
More
than two thirds of the
surveyed leaders said that the 2008 meltdown made innovation even more of a business imperative.
In the earlier days, R&D was among the first casualties in times of business distress. But with innovation acquiring a
What is important
to note ishave
thatbegun
innovation
is not just
process
an all-encompassing
approach
that is More
cross-cutting,
strategic
focus, companies
to sharpen
the afocus
on but
innovation
when the chips
are down.
than
touching
upon
every
vital
pillar
of
business
covering
products
and
processes,
financial
and
risk
management,
talent develtwo-thirds of the surveyed leaders said that the 2008 meltdown made innovation even more of a business imperative.
opment, and branding and promotion, among others. Hence, in building growth strategies, the business leadership would
need to pursue a collaborative approach wherein all key stakeholders, including customers and strategic suppliers, particiWhat is important to note is that innovation is not just a process but an all-encompassing approach that is cross-cutting,
pate in the dialogue.
touching upon every vital pillar of business covering products and processes, financial and risk management, talent
development, and branding and promotion, among others. Hence, in building growth strategies, the business leadership
While the innovation canvas is broad, the underlying processes would necessarily have to be robust, smart, and data-rich. It
would
need
to pursue
a collaborative
approach
all key
customers
and strategic
suppliers In
is equally
important
that
the returns are
tangiblewherein
and aligned
withstakeholders
the top- andincluding
bottom-line
performance
of the company.
participate
in the dialogue.
these circumstances,
cost becomes an important consideration, more so in developing markets that take time to warm up to
innovative products, processes, and practices. Nearly 80% of the CXO respondents to the survey echoed the view that cusWhile
the innovation
canvas
is broad,
the underlying
necessarily
to be robust,
smart
and data-rich.
tomer willingness
to pay
should
be a critical
yardstick processes
to measurewould
the viability
of anhave
innovative
product
or service.
It is equally important that the returns are tangible and aligned with the top and bottom line performance of the
InnovationInhas
another
important cost
dimension
thatanrelates
to timeliness.
Getting
a product
or service swiftly
to take
market
company.
these
circumstances,
becomes
important
consideration,
more
so in developing
marketsout
that
is
a
critical
business
tactic
and
part
of
every
enterprise’s
strategy
to
outwit
competition.
Having
a
faster
time-to-market
time to warm up to innovative products, processes and practices. Nearly 80% of the CXO respondents to the survey is
an imperative
both
mature and
developing
markets,
so in the
supercharged
business
domains of
ofan
ICT,
retail, and
echoed
the view
thatincustomer
willingness
to pay
shouldmore
be a critical
yardstick
to measure
the viability
innovative
automotive.
product or service.
2
Innovatio
n has ano
ther impo
is a critic
rtant dim
al busine
ension th
ss
tactic and
(TTM) is
at relates
part of ev
to timelin
an impera
ery enterp
ess. Gettin
tive both
retail and
rise’s stra
g a produ
in mature
automoti
tegy to o
ct or serv
and deve
ve.
utwit com
ice swiftl
loping m
p
e
y out to m
ti
a
rk
ti
o
e
n
ts
. Having
, more so
Adoptio
arket
a faster ti
n of gree
in the sup
me-to-m
n
e
rc
As I men
practices:
h
a
rg
a
e
rket
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tioned at
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adoptipractices
Adoption of green
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on of gre the outset, going
en p cti is an imperative
green isfew
As I mentionedthatat’the
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s paoutset,
ssing. Ggoingragreen
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iewed as
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reen haas
a
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the adoption of green practices owas
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n obligati current
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b
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e
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rovided it urrent generation
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ow innov
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impact that rapid expansion of data centerssohas
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thus
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ftware te
nters has
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sectors li byn practices
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chnologie
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Importan
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er virtuali its wake. Green IT taken cognizance g and
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This brings me iltoabthe
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South
and
that most
rt and pro
an three
h is Africa,
e
rginIndia,
their stra
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ers support
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tegies fo
o
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o
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Brazil. It is markets
like
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and
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like India
the
anies are
ations, ow
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r today a
, China,
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mes to co aretspitching
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for
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. Soto
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s as no su for ch
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study dare
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ghtful resp seswith
at providCXOs with that unique 360-degree view
ork sm
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o
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T
they
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The
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om of ho
Os witexecutives
s to our q
he CEOCEOs
h that un who took time off
s and C-le
w best to
and insig
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p
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a
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their busy schedule
tohtf
share
responses
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our
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as
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research,
which
attemptsiqtoueshare
ul coinsightful
le
ild grow
of this re
mments o
viecollecw they
th strateg
search, w xecutives who too
n th
ie
h
k
industgrowth
s
ic
tive experience and wisdom of how best
toe build
strategies
for
2012
and
beyond.
We
thank
them
for
their
candid
ti
for 2012
h attemp
ry.
ts to share me off their
& beyon
d. We th
th
responses and insightful comments on the industry.
e collecti
ank them
ve
Regards
for their
candid
Regards,
Rajan Kohli
Rajan Ko
hli
CMO - Wipro
Global IT Business
CM
O - Wipro
Global IT
Business
3
Table of Contents
Key findings
5
Introduction6
Seeking the key differentiator
8
Going green for business growth
15
Developing opportunities in the developing world
22
Methodology27
4
Key Findings
Forbes Insights, in association with Wipro, conducted an exclusive survey of more than 300 CEOs and other C-level executives at
global enterprises ($500M-plus in annual revenue). The key findings of this survey include:
• S
trategic innovation is more important than ever to driving growth. This commitment to innovation will impact how
companies approach environmentally friendly, or green, business practices, as well as how they manage their expansion into
global emerging markets. For example, in some cases, companies are using so-called reverse-innovation, taking innovative
products and services from their emerging market efforts (such as in China) and commercializing them elsewhere in the world.
• C
-level executives see innovation as a way to differentiate their businesses, particularly following the 2008-09
recession. Fully two thirds of the executives said they believe that innovation is more critical than ever because of the
economic downturn of 2008-09.
• S
peed-to-market is necessary for successful innovation. More than 80% of survey respondents agreed that getting a
product or service swiftly out to market is a critical business innovation tactic.
• C
ost remains the biggest hurdle to fostering innovation. It topped the list of innovation barriers cited by C-level
executives, followed by issues related to the regulatory environment, and finding and retaining top talent.
• P
aying attention to best practices is the most effective way to foster innovation. Other innovation tactics promoted
by executives included technology, data-based decision making, and customer collaboration.
• E
xecutives see a very clear business case for using “green” business practices. The most important factors they
cited include reducing costs, improving operational efficiency, and meeting customer demand for more environmentally
friendly products.
• E
mbracing green business practices as part of a corporate innovation strategy is essential to their success.
Overall, nearly three quarters of C-level executives indicated their companies had incorporated environmental elements into
their innovation strategies.
• G
reen IT is a priority for more than three quarters of companies. Their strategies in this area include reducing data
center footprints, greater use of server virtualization, and greater use of cloud computing.
• E
xecutives see investment and expansion into emerging markets as crucial to their strategies today and in the near
future. More than half believe China holds the greatest opportunity, followed by India, Southeast Asia, and Eastern Europe.
• E
xpansion into emerging markets is being driven by lower costs and a higher rate of growth, according to
executives surveyed. Potential barriers to strategic success in these areas include poor distribution channels, unstable
political environments, and a shortage of skilled talent.
5
introduction
Over the past decade, the art of doing business has changed. Companies are re-shaping strategies to innovate and
compete globally. New methodologies, new opportunities, new markets, new technologies, and new practices are
being brought into play with an eye on boosting profits and curbing costs.
Managing top- and bottom-line performance emerged
as the top business priority for about a third of the 308
senior executives responding to a February 2011 survey
conducted by Forbes Insights, in association with Wipro.
(Fig. 1) The survey polled 122 CEOs and 186 other C-level
executives worldwide.
What kinds of tools do these top-level executives
expect to use to shape their strategies for growth in 2012
and beyond? The survey focused on three key areas:
FIGURE 1: What are your company’s current top business priorities?
Managing top- and bottom-line performance
30
Expanding into new and emerging markets
28
Cutting costs
26
Building and maintaining our competitive position and brand
26
Strategic innovation
An overwhelming number of respondents agreed that
innovation—both related to new products and services
and to business practices—is critically important to driving growth. And more than two-thirds of the surveyed
leaders say that the 2008-09 recession made innovation even more of a business imperative. Innovation is
being driven by data-based business decisions and intelligence; collaboration with external customers and
vendors; enhanced risk management solutions; selective
outsourcing; vigilant compliance; and integrated global
communications. As they go down this road, leaders are
trying to keep an eye on costs—which they cited as the
biggest hurdle to innovation.
Developing new products and services
24
Driving innovation and research & development
22
Leveraging technology
21
Recruiting and retaining employees/talent
17
Driving environmentally conscious growth
15
Improving supply-chain effectiveness
14
Ensuring risk and regulatory compliance
Sustainable development
So-called “green” initiatives have the greatest chance for
long-term success when they make business sense. Three
out of four survey respondents indicated they believe
there is a strong business case for sustainable development. Eco-efficiency can earn revenue and help to reduce
costs, two legitimate reasons for companies to adopt such
initiatives. Another reason: more than a third of respondents said their companies were taking up green practices
because their customers were asking for it.
14
Building value through M&A
12
0%
6
50%
100%
Emerging markets
China and India are the most popular investment spots
for survey respondents, with China the clear favorite—the country’s rising purchasing power presents
opportunities for a diverse range of business. Venturing
into developing markets is not a surprising business initiative—these economies offer faster, higher growth
potential compared to more mature markets. However,
emerging economies also may present challenges: poor
distribution channels, skill shortages, volatile political
climates, and strong local and international rivals, for
example. The trick for foreign entrants may be to formulate business plans that consider the socio-economic
trends in those emerging markets, and correctly identify
the opportunities and challenges there.
All in all, the corporate mood appears buoyant heading into 2012. Chief executives and their direct reports
are confident their companies are performing well in various aspects of business. They believe their strategies of
innovation, sustainability and expansion are effective—
and this will continue in 2012 and beyond.
7
Strategic Innovation
Seeking the Key Differentiator
“Any company not thinking about innovation is not going
to have long-term sustainable success.” So said Wong Wai
Ming, senior vice-president and chief financial officer of
Lenovo, one of the world’s largest computer companies.
Without innovation, you can survive for a few years “but
then you die,” noted Jean-David Calvet, chief procurement
officer of Alacatel-Lucent, a global communications firm.
Their thoughts reflect those of more than 90% of
respondents to the survey who wholeheartedly agreed on
the importance to business of innovation in products and
services, and business practices. (Fig. 2)
FIGURE 2: Importance of innovation
Product/service innovation
Today
46
31
17
3 3
Two years from now
37
31
22
7
3
Business process innovation
Today
41
32
19
6
2
Two years from now
“It is critical to our customers’
success that we continue to push
the boundaries of the unknown.”
34
35
19
9
• Extremely important • Very important • Important
• Somewhat important • Not important
–Sophie Vandebroek, Xerox
FIGURE 3: Did the economic downturn of 2008-09 change your company’s
approach to innovation?
Fully two thirds of the senior executives said they
believe that innovation is more critical than ever because
of the economic downturn of 2008-09. (Fig. 3) The silver
lining is that the bad times may actually lead to good ideas.
True, recession makes jittery companies cut research budgets, lay off staff, pare operations, and freeze hiring. But
on the flip side, an economic slump forces companies to
survive, so they cut costs, shed flabby operations, and find
innovative ways to make money.
Consider the situation at Xerox, which announced
that it added 1,031 U.S. patents to its intellectual property
portfolio in 2010, an increase of 46% from 2009, ranking
it among the top 20 companies for U.S. patents in 2010.
“It is critical to our customers’ success that we continue
to push the boundaries of the unknown,” noted Sophie
Vandebroek, Xerox’s chief technology officer and president
of the Xerox Innovation Group. “We are passionate about
innovating. It is at the very core of what Xerox does. More
than 2,400 employees, past and present, have been granted
five or more patents, an extraordinary accomplishment.”
• Innovation is now
more important
than it was prior
to the recession
13%
• Innovation is less
19%
68%
important than
it was prior to
the recession
• It did not change
our approach to
innovation
8
3
Alcatel-Lucent
Innovation, innovation, innovation
Imagine no ugly cell phone tower antennae. Instead, they’re replaced by a miniature base station that can be attached
at the bottom of the tower, or on an electricity pole,or on the side of a building. Plus, this equipment can slash a
telephone company’s operating expenses and electricity consumption.
LightRadio is an innovation from global communications company Alcatel-Lucent that seems to make this imagining a
reality. Jean-David Calvet, Alcatel-Lucent’s chief procurement officer, calls the device a typical example of how different
components of the company work together to develop innovative products in partnership with key suppliers. An
internal team was set up consisting of personnel from Bell Labs, a core unit responsible for pure research, and the
products division responsible for defining new products, “to create a disruptive approach to the market,” according to
Calvet. The development was done in partnerships with Freescale and HP.
Another important element in Alcatel-Lucent’s innovation is its partnership with its customers, the telecommunications
operators. If a product is provided as part of a solution, it should be what the customer demands, noted Calvet;
through partnerships with customers, Alcatel-Lucent provides end-to-end solutions, from concept to product.
Equally fruitful are partnerships with suppliers, as seen in the development of lightRadio. Of course, some suppliers are
simply that and little more, but others are so-called preferred or strategic suppliers and are treated differently. With
these suppliers, Alcatel-Lucent has an “in-depth, common, win-win relationship, working together, especially on
innovation”, said Calvet. The criteria for selection for the strategic suppliers are different from those for “normal”
suppliers, noted Calvet, adding that the relationship with preferred suppliers is less transactional, more strategic.
9
The range of patents reflects Xerox’s focus on making business processes easier and more efficient, said
Vandebroek. For example, the 2010 patents included solutions that improve inventory management, e-mail overload
and personalized packaging. Other patents help in document management and in making sense out of large
volumes of information. Patents on printing systems using
less power are a way for Xerox also to minimize the environmental impact of its products and services.
FIGURE 4: Innovation requires getting new products and/or services to the
market swiftly
42
39
11
5 3
• Strongly Agree • Agree • Disagree • Strongly Disagree • Don’t know
sessions. An obeya group at Toyota would typically include
engineers, assembly workers, marketers, designers and suppliers; an obeya room would have whiteboards with graphics
to depict schedules, progress, warnings, and scenarios for a
product’s development. “When there’s a big problem, we
know [we] have to change, but when there isn’t a problem,
we still want to innovate. That’s where I think this culture,
this kaizen, this sharing of ideas...this obeya links, where you
try to generate ideas for something that may already be performing pretty well,” noted Bafunno. (See sidebar, page 12)
Focusing on effective innovation
The key is effective innovation. Corporate resources should
be allotted neither to too many channels (because that can
lead to a lack of focus) nor too few (because that would
stifle creativity). To drive business innovation, robust
data should underpin all decisions and competitive intelligence, according to three in four of survey respondents
worldwide. Collaboration within the company, as
well as with customers and supply chain partners,
is another effective tactic to spur innovation, three
in four of the senior executives believe. “One way
to go beyond pure technical innovation is to work
together, between research and R&D and key suppliers, to define new approaches to be the first to
market with innovative products. This is one of the
main elements of our strategy,” said Alcatel-Lucent’s
Calvet. He noted that its recent lightRadio cell
architecture is the outcome of such a collaboration. (See
sidebar, page 8)
There are other examples of internal innovation. Toyota
practices kaizen or “continuous improvement,” in which
teams get together not only to problem-solve the weak
points, but also to look at what are considered the strong
points, said Norm Bafunno, president of Toyota Motor
Manufacturing Indiana (TMMI) in the U.S.
Also applied at Toyota is obeya (which means “big
room” in Japanese), a key project-management tool used
primarily in product development to shorten the PlanDo-Check-Act or PDCA cycle, which in turn leads to a
speedier-to-market approach. Obeya is all about effective
and timely communication between upper and lower management, and across functions, who meet daily in ongoing
“When there’s a big problem, we know
[we] have to change, but when there isn’t
a problem, we still want to innovate.”
–Norm Bafunno, Toyota
Getting customer input
Listening to customers is imperative for business innovation; there is no point in having a great idea if nobody
wants to buy it. “We have to come up with products that
meet the need of customers and the ways to service that
need,” noted Lenovo’s Wong Wai Ming. Apple may have
opened up the market for tablet computers with its iPad,
but as consumer demand has risen, others, like Lenovo, are
entering the market. Lenovo unveiled its LePad in endMarch, rolling it out first in China, its home-turf. Xerox’s
newly launched Innovation Hub in India aims to understand customer needs by leveraging the experience of local
partners (See sidebar, page 11).
But the speed-to-market approach isn’t restricted to
computers or electronics companies. Fashion houses live or
10
die by their ability to set runway trends. Carmakers worldwide increase sales by regularly launching new models which
promise better mileage, better looks, and better eco-friendliness. Retail banks hasten to be the first to offer consumers
new financial solutions or savings schemes. Getting a product or service swiftly out to market is a critical business
tactic, agreed 81% of surveyed executives. (Fig. 4)
Companies take a breather in emerging countries, however. Product and service innovation is less important in
developing markets than mature markets, according to 67%
of senior executives surveyed.
The reasons are diverse. In a less developed market,
companies may have fewer rivals, or consumers may have
fewer choices of product or service available to them, or
have lower user maturity. Or purchasing power? To be
sure, customer willingness to pay should be a critical yardstick to measure the viability of an innovative product or
service, said 79% of respondents. Spending millions of dollars on development is only worthwhile if the product or
service sells. Price is less of a concern than the willingness
of a consumer to pay.
FIGURE 5: What are the biggest barriers your company currently faces
regarding fostering innovation?
Cost
39
Talent recruiting/retention
25
Regulatory environment
25
Technology infrastructure
23
Lack of metrics to measure impact of innovation
22
Innovation is not a strategic priority
21
Lack of understanding about innovation
19
Corporate comfort with risk
19
Lack of an organizational framework for innovation
18
The litmus test of a great idea: will it sell?
CFOs are leery of pouring money into ideas that either
won’t get off the ground or will end up gathering dust.
They tend to become particularly anxious about funds for
innovation when companies have to tighten their belts. Not
surprising, then, that 39% of respondents point to cost as
the biggest hurdle to fostering innovation. (Fig. 5) It is seen
as a bigger challenge than talent recruitment and restrictive
regulatory environments.
Leadership lacks vision
17
0%
11
50%
100%
Xerox
Innovative research
The Xerox India Innovation Hub, which opened in March 2010, has a few unique characteristics. For a start, it is Xerox’s
first research center in an emerging market, and has an initial objective to develop document management solutions
for India and other markets. At the hub, Xerox is not taking the conventional “captive” route of relying on in-house
research skills and facilities, a strategy that some multinational companies have pursued in their research centers in
emerging markets.
Instead, the Xerox hub has adopted Open Innovation, working in some ways as an incubator for ideas from
entrepreneurs and entities outside the company, especially its local partners. “Our Open Innovation model is core to
how we innovate at Xerox. The best way for us to understand customer needs is to partner with local people and
leverage their experience,” said Falynne Smith, public relations manager for developing markets operations at Xerox
Corporation. “The reason we call it an Innovation Hub is because it’s a central point that brings together research from
all of our centers with the best and brightest minds in India. We’re building a strong global innovation network by
partnering and collaborating, rather than competing.”
Located in Chennai in southern India, the hub “represents innovation without borders in its truest form”, said Smith.
“We’ve leveraged our existing competencies to help solve emerging-markets business problems in India, but also to use
the talent there to address global concerns. This team is engaged in innovation-focused projects spanning a wide
range of exciting areas, including business process optimization, information and secure content management, cloud
computing and collective intelligence-based systems.
In many of these fields, Xerox is using the hub to expand partnerships with leading Indian technical and business
schools. Some examples:
• A partnership with the well-known Indian Institute of Technology Madras (IIT Madras) to use on-demand cloud
computing to improve the efficiency and economics of document-services delivery
• Another partnership with IIT Madras’s Rural Technology Business Incubator to develop innovative solutions
to improve workflow at small technology-based businesses in rural India
• A collaboration with the Indian Institute of Science on a project on machine-learning and game-theory principles to
improve the performance of online service marketplaces
• A project with the Indian Institute of Technology Bombay to develop linguistic databases to provide automated
translation of documents
• A project with the Indian Institute of Technology Kharagpur on the dynamics of mobile phone users.
The Xerox hub also can leverage the experience of a channel partner network of 500 partners, value-added resellers
and sub-distributors spread across 28 locations in India. These partners are expected to deliver appropriate solutions to
customers and, through their interaction with the latter, are well placed to provide feedback to Xerox on customer
requirements and problems.
According to Smith, in the year since the India Innovation Hub opened, it has been “flourishing with activity that is
benefiting Xerox clients all over the world.”
12
Leadership, meanwhile, must be the driver of corporate
innovation. Four out of five respondents said business innovation should be a clear priority for a company’s leadership.
Fully 77% of senior executives worldwide agree also that
the top bosses should be willing to take risks to facilitate
business innovation.
Toyota’s Bafunno agreed that risk-taking is important
for a company’s leadership, but that it should be seen in
context of a company’s culture. If a leadership team is not
in line with the right kind of environment to take risks, no
risks will be taken, he said.
FIGURE 6: How effective do you believe the following tools and tactics are
for driving business innovation?
Technology that fosters greater internal collaboration
39
40
9
8
4
Attention to industry best practices
1
38
42
11
8
Collaboration with customers
37
39
11
8
5
10
5
8
4
Collaboration with supply chain partners/vendors
37
35
13
Data-based decision making
Tools for innovation
Driving business innovation requires effective tools. Survey
respondents had clear likes and dislikes (Fig. 6):
•A
ttention to best practices is the premier technique for
fully 80% of surveyed respondents. Learning from the
success and failures of others may be a no-brainer, but the
lessons must be prudently fitted to suit each company’s
peculiar circumstances and culture.
•T
he next most-effective tool for business innovation is
technology, rated effective by 79% of respondents.
•C
losely related to technology, data-based decision-making ranks third, tied with collaboration with customers.
36
40
12
Integrated global communications
36
37
13
10
4
37
14
8
5
38
13
9
5
Data-based competitive intelligence
36
Enhanced risk management solutions
35
New organizational structures
31
43
15
7
4
Selective outsourcing
28
0%
40
16
50%
• Very effective • Effective • Ineffective • Very ineffective
• Don’t know/NA
13
12
4
100%
Toyota
Continuous improvement
Innovation isn’t about “eureka” moments. More often, it is about continuously tweaking an existing idea, and making
small changes that lead to a better, more competitive product or service. At Toyota, this is embodied in the practice of
kaizen or “continuous improvement,” and linked to the Japanese automaker’s use of obeya or “big room,’ a
management tool that encourages cross-function communication to spur the product development process. Engineers,
assembly workers, marketers, designers, suppliers and others engage in ongoing sessions to mark progress, resolve
problems and insert changes, with the aim of improving the final product.
What are the criteria for good ideas generated by the application of kaizen and obeya?
Toyota Motor Manufacturing Indiana (TMMI) tries not to limit the generation of ideas for improvement, but categorizes
and prioritizes them based on their potential impact. “We try to hit on those major categories, and within those we try
to figure what’s going to give us the best result and what we can implement,” said Norm Bafunno, TMMI’s president.
“And that’s a win-win for everybody.”
He cited an example of innovation for posture change. During assembly of a
vehicle, even though the doors are off to maximize access, the center line of a
vehicle is challenging to reach. “So we look at other ways to place parts
within that area; maybe it’s with a special assist arm, or how we fasten it to
the floor, and things like that. Those are the kind of ideas that would occur
with obeya,” said Bafunno.
Another example: innovation in relocating equipment. An employee asked, “I
have to take four steps to pick up that part—why can’t I just take two?” So
TMMI looked at the equipment and moved it. “It may sound simple, but I tell
you it isn’t the result of engineers coming in and saying move that equipment
closer. The team members came up with the idea and said this is going to be
more efficient,” said Bafunno. He sees such kinds of improvement as the core
link to Toyota’s overall vision, creating innovation at the plants aligned with it.
“There are a lot of
ways in which you
can save and improve
and innovate that
don’t cost a lot
of money.”
–Norm Bafunno,
Toyota
The TMMI president believes cost is always important in decisions on new ideas, but it isn’t the biggest challenge in the
automotive industry; instead, the No 1 hurdle is to design very flexible equipment that builds the cars and trucks. “So
innovation can occur through what I consider to be continuous improvement of the equipment that we have or the
application of that equipment in a different model,” he said. “There are a lot of ways in which you can save and
improve and innovate that don’t cost a lot of money. In our industry, the point of view in assembly operation is that we
don’t look at that as being a major stop to innovation at all.”
Continuous improvement is built into the annual planning process. Each year, TMMI assigns tasks to its executives and
asks for some innovative breakthrough activities. These ideas are measured and monitored throughout the year. Some
turn out to be good, some do not. But their existence indicates the espousal of innovation and risk-taking at a senior
level at Toyota.
14
Sustainable development
Going green for business growth
A trawl through corporate websites will show that almost
every large business has a sustainability initiative (some
more energetic than the others), often in keeping with its
social responsibility aims. Green practices are the way forward, and make a great marketing tool as they highlight
the “engaged” side of a company. But sustainable practices
are not only the right thing for companies to do, but also
are critical from a business growth perspective.
It is against this background that many organizations
have implemented strategies to improve their environmental standing. According to the survey results, reducing
costs is the most important reason for adopting green business practices given by 41% of respondents, particularly by
the chief executives among them. (Fig. 7) About one in
three respondents worldwide turn to eco-friendly action
to improve operational efficiency, meet customer demand,
and comply with regulations.
FIGURE 7: Which of the following factors are most important to your
company’s use of green business practices?
Meet internal objectives for sustainability or climate change
41
Reduce consumption of fossil fuels
37
Be a good corporate citizen
35
Comply with current or future regulation
33
Be a good corporate citizen
31
Meet customer demand for greener products
27
Reduce costs
25
Focusing on return, not cost
Improbably, some companies are inhibited from participating in carbon-emission reduction because of the perceived
costs involved. Can they become believers? They can, if
they understand that by cutting their carbon output they
are taking the waste out of their systems and are driving
efficiencies—efficiencies that can then be converted into
cost savings better used for growth and expansion, said
Justin Barrow, co-founder and chief innovation
officer of China-based Climate Action, which provides carbon offsetting services to help businesses to
meet their green or corporate social responsibility
objectives.
Mark Watson, head of environmental affairs at
Cathay Pacific, one of Asia’s leading airlines and a
Climate Action client, said there is always a cost
imperative in the airline industry, which works
on thin margins, and where profitability is an
ongoing challenge. But while moves such as fleet
modernization and innovative technologies carry
“significant upfront costs,” these are offset in the longer
term by fuel savings and efficiencies. “It is a bit of a red
herring to say that being greener is going to cost more
money,” said Watson. “We have seen that companies that
0%
50%
100%
invest in small but significant environmental projects are
generating cost-savings and are also getting the reputational benefits [that go] beyond the bottom-line savings.”
“We have seen that companies that
invest in small but significant environmental
projects are generating cost-savings and are
also getting the reputational benefits.”
–Mark Watson, Cathay Pacific
To mitigate its carbon emissions, the Hong Kong-based
airline has explored initiatives that include fleet modernization, innovative engine technologies, and biofuels. (See
sidebar, page 18)
15
CLP Holdings
With power comes responsibility
Worldwide demand for electricity is expected to grow by 2.2% annually through 2035, with more than 80% of that
increase coming from non-OECD countries, according to the World Energy Outlook 2010. The emerging markets of
China and India lead the demand, as they ramp up their economic growth. In both countries coal-fired generation is
the cheapest and most-prolific form of electricity. It is also the most polluting.
This focus on coal created a dilemma for CLP Holdings when it debated its
climate-change strategy, said Andrew Brandler, the company’s CEO. A
leading power company in Asia, Hong Kong-based CLP invests and
operates in China and India, as well as Southeast Asia, Taiwan, and
Australia. Rejecting coal entirely and becoming a niche player in renewable
energy would have been an easy solution, said Brandler, but these
emerging markets will continue to use coal for many decades.
“We are balancing
the economic, social,
and financial goals that
sustainability
is all about.”
CLP decided instead to balance its generation portfolio, and move towards
–Andrew Brandler,
de-carbonization by offsetting the emissions from coal-fired generation in
CLP Holdings
part with non-fossil-fuel generation and renewable energy. “We are
balancing the economic, social, and financial goals that sustainability is all
about,” said Brandler. “If we ignore the benefits of power, that’s not
helping these societies. Someone else will build those coal-fired stations; if we can set an example and build them
cheaper and more effectively, with cleaner technologies, then that is contributing to the social development of these
countries.”
The company also changed its business approach to be compatible with global objectives for stabilizing greenhouse
gas emissions to limit climate change. In 2007, CLP developed Climate Vision 2050, which sets a group-wide target of
reducing carbon-emission intensity by 75%, by 2050. It continues to review its targets regularly, and has set even
stricter milestones for cutting carbon intensity, increasing renewable energy capacity, and using non-carbon-emitting
generating capacity.
Balancing the company’s generation portfolio is an imperative. As Brandler put it, “We see carbon as a threat to any
business. In 2050 if you are a carbon-intensive business, you are in big trouble; chances are you won’t be in business by
then. That’s the important part of our 2050 vision. We want to be in business in 2050, but that doesn’t mean you take
action in 2049; you have to move down this path and be ahead of the curve as the world moves down that path.”
16
Heavily fuel-reliant industries such as logistics, automotive, shipping or aviation have a greater stake in
carbon-offset and energy-efficiency action. UPS began
a carbon-offset program in 2009 in response to customer
demands for environmentally responsible shipping options.
(See sidebar, page 20) Under the program, customers of
the U.S—based logistics firm can choose to pay a small
fee to calculate the carbon emissions from their shipments.
UPS collects the fee, chips in a matching amount, and uses
the money to fund environmental projects worldwide.
Elizabeth Rasberry, a spokesperson for UPS, said that the
initiative is recognition that UPS is “a critical part of our
customers’ supply chain and we have an obligation to help
them operate in a more environmentally sustainable way.”
FIGURE 8: As part of your innovation strategy, has your company embraced
“green” practices?
Total respondents
1
71
15
13
Americas
1
69
17
13
EMEA
60
21
17
2
APAC
100
• Yes • Not now, but will be adopting in the future • No • Don’t know
Green =i nnovation
Becoming part of a corporate innovation strategy gives a
boost to environmentally responsible action. Overall, 71%
of respondents said their companies had embraced green
strategies as part of their innovation strategies. (Fig. 8)
The results were most dramatic in the Asia Pacific region,
where 100% of the companies linked green practices to
innovation.
There greater enthusiasm in Asia could have several
reasons. Companies in the region are catching up with
counterparts in the West who have been practicing sustainable business longer. As environmental regulations become
stricter worldwide, vendors in Asia servicing Western companies have had to ramp up their green practices not only
to meet their customers’ requirements but also to comply
with enhanced rules at home. Governments in Asia are
introducing tighter controls on environmental degradation,
with taxes and penalties imposed on polluters.
FIGURE 9: Is green IT a priority for your company?
4%
19%
77%
Reducing IT’s carbon footprint
IT remains one of the biggest consumers of energy within
the enterprise. Global data center capacity has been rising
considerably, and with it the amount of electricity these
facilities consume, as well as the amount of greenhouse
gases they emit.
Respondents expressed concern over the impact IT has
on their energy consumption. More than three quarters
17
• Yes
• No
• Don’t know
of the C-level executives indicated using IT solutions that
consume less energy and are more environmentally friendly
is a priority for their companies. (Fig. 9)
Specifically, executives pointed to data centers as a key
energy consumer, and reducing data center footprints was
the most common element of their green IT strategies.
(Fig. 10) That was followed by two critical and complementary software technologies that are also linked to
reducing data center size: greater use of server virtualization and greater use of cloud computing.
FIGURE 10: Which of the following elements are part of your company’s
green IT strategy?
Reducing data center footprint
46
Greater use of server virtualization
42
Greater use of cloud computing
41
Shifting data center location
32
Creating an eco-friendly framework
As with innovation, companies need an organizational framework to spur green business practices. In fact, more than 80%
of executives in the survey agreed that is the case. (Fig. 11)
Asked about what it takes to drive companies to focus
on the environment, Climate Action’s Barrow indicated
that it all boils down to “strong executive leadership,”
which needs to demonstrate that it is prepared to make
decisions that stand by what the company wants to represent now and the future.
Andrew Brandler, CEO of CLP Holdings, a power generation company, agreed. “Certainly the leadership team
[has it] imbued in all their strategies that we need to decarbonize.” After laying out sustainable-development
targets in its Climate Vision 2050 strategy paper, CLP carried out an exercise to educate its 6,000 employees about
the targets.
Cathay’s Watson added that a company’s middle management also plays a part in sustainable development, and in
fact “it’s everybody’s duty to do their bit.”
Replacing older servers, computers, and peripherals
30
Assessing energy consumption of all equipment purchases
30
Greater use of outsourcing
30
Monitoring use of IT energy consumption
20
Using smart grid or other energy management technologies
20
Implementing ways to reduce, store, and dispose of e-waste
17
0%
In need of government support
Can business do it alone? Three-fourths of respondents
believe green initiatives by business cannot be successful
without the support of local and national governments. (Fig.
12) They reflect the opinion of international associations such
as the World Business Council for Sustainable Development,
a CEO-led, global association of about 200 companies. The
council believes that tackling climate challenges requires
greater collaboration across business sectors and between
business, government, academia and civil society.
18
50%
100%
Cathay Pacific Flying in greener skies
The aviation sector today accounts for 2% of the world’s carbon dioxide emissions; by 2050 this is forecast to grow to
3%. So how can the aviation industry fly greener?
To mitigate the emission of greenhouse gases, the International Air Transport Association (IATA) has set certain goals,
including improving fuel-efficiency by 1.5% annually from through 2020, and halving CO2 emissions (from 2005 levels)
by 2050. Hong Kong-based Cathay Pacific, one of the world’s largest airlines, subscribes to the IATA targets. “It’s
going to be challenging,” said Mark Watson, head of environmental affairs at Cathay Pacific, “but with new engine
technologies, development of sustainable biofuels and improvements in air traffic management, for example, those
targets are achievable.”
Along with the innovative engine technologies and biofuels that Watson mentioned, Cathay has also modernized its
fleet in a bid to lower its carbon emission. Over the past two years, 10 new Boeing 777-300s have replaced less fuelefficient passenger aircraft mainly on Cathay’s trans-Pacific routes.
Cathay also has been supporting development of sustainable biofuels as a member of the Sustainable Aviation Fuel
Users Group, an industry working group led by Boeing to examine the commercial development of sustainable aviation
fuel. Watson believes biofuels will be important in the industry, not least because prices of conventional fuel are
heading upwards.
Cathay scrutinizes real-time wind data to plan flight routes and speeds. It also works closely with governments,
particularly those in Asia-Pacific, to improve the efficiency of global air-traffic management. Delays mean more holding
time, which means more fuel burn, which means more cost to airline and more emissions. But governments, not
airlines, control air-traffic management. “What we can do is operate our aircraft in the most effective way we can, not
just in terms of fuel conservation management, but also at the maximum environmental optimum,” said Watson.
Finally, Cathay gets its customers involved. The airline’s FLY greener program offers passengers the option of offsetting
the carbon emissions from their flights with either frequent-flyer miles or cash. Similar offsets apply to staff travel
within Cathay and its parent company, Swire Group. The “offset” amount is ploughed into selected environmental
projects, including three in China. Watson is very pleased with the offset program, and said the airline is working to
increase interest and uptake, particularly among corporate clients, which are a key market and an important part of
the airline’s premium proposition.
19
Certainly, government support (and money) can contribute to a cleaner environment. CLP’s Brandler said
encouraging national policies assisted the company’s
accelerated foray into renewable energy in India, China,
Thailand, and Australia. China, for example, has set significant targets for low-carbon energy, energy efficiency,
and clean technology in its 12th Five-Year Plan covering
2011-15. For its part, India has boosted allocations for clean
environment schemes in the 2011-12 budget.
FIGURE 11: Companies need an organizational framework to spur green
business practices
42
41
10
4 3
• Strongly agree • Agree • Disagree • Strongly disagree • Don’t know
FIGURE 12: Green initiatives by business cannot be successful without the
support of national and local governments
“What companies have finally woken
up to is that sustainable development
is not a fad. It’s here to stay.”
29
42
20
3
6
• Strongly agree • Agree • Disagree • Strongly disagree • Don’t know
–Mark Watson, Cathay Pacific
But government involvement can also be painful for
companies. The carbon tax versus cap-and-trade debate has
passionate detractors and supporters on both sides. In the
survey, three out of four respondents were convinced carbon taxes would soon become widespread globally. (Fig. 13)
Ultimately, it all comes down to companies believing
there is a strong business case for sustainable development.
Cathay’s Watson concurred. “What companies have finally
woken up to is that sustainable development is not a fad.
It’s here to stay. If done effectively, it can help to deal with
strategy, and be an effective tool to help to create value for
the company. At the end of the day, that is what businesses
do—they are there to create shareholder value,” he said.
CLP Holdings’ Brandler refers to sustainability activity
as long-term risk management. “Doing nothing is a clear
threat, being ahead of the curve is a clear opportunity and
the challenge is getting that balance right as you move forward...Businesses that are going to be around at the end of
century will have to look at it that way,” he said. “As chief
executive, I want the business to be thriving. [Sustainable
development] is part of our core strategy otherwise we
know we are not going to be in business in the future.”
FIGURE 13: Carbon taxes will soon become widespread globally.
26
48
14
4
8
• Strongly agree • Agree • Disagree • Strongly disagree • Don’t know
20
UPS
Greening a customer’s supply chain
For logistics companies, which move millions of packages each year by land, sea and air, the conundrum is how to cut
fuel consumption and carbon emissions, cater to environmentally responsible customers, and offset unavoidable
carbon output. UPS has found a few schemes.
Since late 2009, UPS has been offering a carbon offset option to customers in which they can choose to pay a small
fee to calculate the carbon dioxide emissions from their shipments. The fee is collected by UPS, which matches the
amount and uses the money to fund environmental projects such as a 39.9-mw wind-power plant in Nicaragua, a
wastewater biogas-to-energy system in Thailand, a landfill gas scheme in China that captures methane released at the
site to generate clean electricity, and two commercial reforestation schemes in Tanzania. UPS contributes a total of up
to US$1 million annually.
For its own operations, UPS reduces fossil-fuel consumption by using alternative fuels and increasing operational
efficiency. The company has a fleet of more than 1,900 vehicles that run on alternative fuels. UPS said that so far it has
explored eight different alternative-fuel technologies, such as liquefied natural gas, compressed natural gas (CNG),
hybrid-electricity and electricity. The bulk of the “greener” fleet is deployed in the U.S., but CNG vehicles ply for UPS in
Germany, France, Chile and Brazil, and propane-powered vehicles make deliveries in Canada and Mexico.
UPS also has reduced its carbon emissions by improving the fuel efficiency of its domestic delivery fleet—by 10% in
the past decade, and by aiming for another 10% improvement over the next decade. This has been achieved by
minimizing both the number of miles driven and the number of minutes vehicles idle during delivery and pickup. Every
gallon of fuel is maximized, using proprietary software, methodologies and training programs. Telematics captures
hundreds of data elements from UPS vehicles to improve efficiency and customer service, slash energy consumption
and emissions, and make drivers safer. “Telematics also helps to reduce the amount of time spent idling by 15 minutes
per driver per day. That equates to 25 gallons of fuel per driver per year. There are definite cost savings there,” noted
Elizabeth Rasberry, a spokesperson for UPS.
21
Emerging Markets
Developing opportunities in the
developing world
Emerging markets—from the explosive markets of China
and India to developing areas such as Southeast Asia and
Eastern Europe—are critical to the growth of global enterprises. More than three quarters of respondents indicated
that investment and expansion into emerging markets is
extremely or very important to their strategies today, and
a similar number believe it will continue to be crucial two
years from now. (Fig. 14)
For companies to grow fast organically, it is necessary
to grow fast in emerging markets where the rate of growth
is quicker, noted Wong Wai Ming, senior vice-president
and CFO of Lenovo, the Chinese computer maker. While
Lenovo is based in China, it is a global brand, having purchased the personal computer business of IBM in 2005.
Unsurprisingly, China—the second largest economy in
the world—tops the list of markets that executives believe
have the greatest opportunity for growth in the next 24
months. (Fig. 15) In fact, more than half of respondents
(55%) cited China, followed by India (29%), Southeast Asia
(21%), and Eastern Europe (21%).
FIGURE 15: In which emerging markets does your company see greatest
opportunities for growth in the next two years?
China
55
India
29
Southeast Asia
21
Eastern Europe
20
Russia
15
Brazil
11
Middle East
10
South Africa
10
Turkey
8
FIGURE 14: Importance of investment/expansion into emerging markets
Mexico
7
Today
42
33
18
North Africa
3 4
7
Two years from now
39
30
17
9
Indonesia
5
6
• Extremely important • Very important • Important
• Somewhat important • Not important
0%
22
50%
100%
For many businesses, China presents multiple opportunities for growth. On the one hand, many companies have
been manufacturing in China due to lower costs and high
capacity. On the other, the emergence of the Chinese consumer over the past few years has made it a more viable
market for selling goods and services. For example, Gap,
the U.S. retailers, last year launched four flagship stores
in Shanghai and Beijing, along with an e-commerce site.
According to a Gap spokesperson, “China is the cornerstone of our global growth strategy and we entered with
a view towards setting the foundation for building a longterm brand.”
“Emerging markets are on the agenda for companies
looking for growth opportunities. Rapid economic progress in the past decade and growth potential in Brazil,
Russia, India and Mexico have established them as strategic
market priorities for Xerox,” noted Falynne Smith, public relations manager for Developing Markets Operations
at Xerox. “Emerging markets are resilient and clients in
those areas seek more value-added services and technology
to strengthen their competitive advantage. This represents
a prime opportunity for our services business – helping
improve productivity, enhance efficiency, and reduce costs
so they can focus on their core business.”
FIGURE 16: What are the key drivers for your company to target emerging
markets?
Lower costs
35
They are growing faster than developed markets
20
Growing consumer base
19
Fewer domestic rivals
16
Good recognition of our brand
16
Pool of skilled local talent
15
They have industries that complement our own
15
Fewer international rivals
15
Investor-friendly policies of governments
14
Shrinking consumer base in our home economy
12
Similar social and business culture to home market
12
Strong IT infrastructure
12
Stable political environment
11
Transparent financial markets
10
Strong law and order system
10
Strong civil and business legal system
9
0%
23
50%
100%
Lenovo
Protect and attack
The world is awash with new tablets from the major computer-makers: Apple, Dell, Samsung, Motorola, HewlettPackard, and Toshiba. Lenovo, too, has launched its LePad and IdeaPad (a hybrid notebook-tablet), but only within
China, its strongest market. Lenovo will watch how these products perform at home before releasing them elsewhere,
a tactic also employed last year for LePhone, its first smartphone, which is selling robustly in China.
Staggered launches are part of Lenovo’s “protect and attack” strategy in
which it protects the core business in China and mature commercial
markets, and attacks in fast-growing emerging markets such as India,
Russia and Brazil. “We plan our business on a global basis but when we
launch, we identify a market that will give us the best chance of success.
Once we have that, we roll out continuously,” said Wong Wai Ming,
Lenovo’s senior vice-president and CFO. The initial focus is always on China,
a market that accounts for about 46% of its worldwide sales, and where it
has strong brand recognition.
“We plan our business
on a global basis but
when we launch, we
identify a market that
will give us the best
chance of success.”
–Wong Wai Ming,
Going forward, Lenovo is investing in its brand. The Chinese company
Lenovo
came on the global stage in 2005 by buying IBM’s PC business. From the
consumer’s perspective, acknowledged Wong, Lenovo is still not as well
known as other international brands. Despite the IBM unit acquisition,
Lenovo is still a Chinese brand, with all the less-than-positive perceptions that has for Western consumers. Even within
its stronghold of China, international rivals can turn consumers’ heads (and renminbi) towards their own strong brands.
24
Drivers and barriers
Interestingly, investor-friendly government policies and
political stability—traditionally considered attractive
incentives for investors—are not rated highly by respondents when it comes to emerging markets. Respondents
indicated their companies’ emerging market strategies were
focused mostly on costs and the overall pace of growth.
(Fig. 16)
But respondents also noted significant barriers to
strategic success in emerging markets. While no single
concern rose above others, many appeared worried about
a foundation that could support the growth they desire.
(Fig. 17) For instance, about one in five respondents (21%)
said poor distribution channels were a hindrance. A similar percentage (18%) were concerned about a shortage of
skilled talent.
Xerox’s Smith agreed that “in terms of innovation,
talent in India is an issue. We have more demand than supply.” But, she added, “at the same time there are a lot of
great minds thinking about this and how to solve this problem and build a larger pool of talent.”
FIGURE 17: What are the key barriers in your target emerging markets?
Poor distribution channels
21
Unstable political environment
19
Lack of understanding of social/business culture
18
Shortage of skilled talent
18
Strong presence of international rivals
17
Inadequate domestic partners and/or suppliers
16
Feeble law and order system
16
Corruption
15
Opaque financial markets
15
Inadequate infrastructure
15
Lack of need for our products/services
14
Constraining regulatory policies
14
Feeble legal system
13
Strong presence of domestic rivals
12
Little recognition of our brand
12
0%
25
50%
100%
Gap
Global, but with eyes for China
Gap is hoping to tempt China’s consumers to spend on its jeans and casual wear. The U.S. apparel retailer last year
opened four flagship stores in Shanghai and Beijing, two prosperous Chinese cities, along with an e-commerce site.
The investment in China came after lengthy market research and “marks the beginning of a long-term, multi-channel
strategy that will eventually result in more stores throughout the country,” said a Gap spokesperson.
Given the compulsion to save in China, and its lower purchasing power, does Gap anticipate sufficient sales to justify
the costs of a China venture? The Gap spokesperson said the company doesn’t disclose forward-looking projections
for sales or earnings, but has “great confidence that Gap will be well-received by Chinese customers and that our
target demographic will embrace the brand.” She added that Gap’s approach to pricing was to offer a range from
value to premium of “stylish, quality products at accessible prices, all tailored to the Chinese fit.”
There is less traction for Gap in India, a market that the company continues to evaluate, along with other emerging
markets. Entry into new markets worldwide is part of Gap’s global growth strategy, which includes franchise, online
and company-owned expansions.
Gap’s strategy for global growth is to leverage core brands across multiple platforms, channels and geographies. “With
regard to new countries, we take a different approach depending on the market. For instance, first we identify large
markets, like China and Italy, with significant long-term upside for our brands and decide to make the investment to
own and operate our own stores, whether it’s full-priced brands or our outlet models,” said the Gap spokesperson.
In smaller countries with projected growth and a limited risk profile like Australia and the Middle East, Gap leverages
its successful business model. In major regions where it has its own stores, the company builds dedicated e-commerce
sites, such as in Canada, Europe and China, so customers can get localized shipping and rates. In other markets, where
Gap wants to test its brand acceptance and build market share, it ships directly from the U.S. Gap’s goal is to improve
top-line revenue, and to increase the percentage of its online and international revenue to 30% of total revenue by
2014, up from 22% of total revenue in 2010.
26
Methodology
The information in this report is based on the results of a survey and one-on-one interviews conducted by Forbes Insights in
March 2011.
Forbes Insights, in association with Wipro, surveyed 308 C-level executives at large global enterprises with annual revenues
of more than US$500 million. About a third worked for companies with annual revenues of $US5 billion or more.
All respondents had C-level titles, including CEO (40%), COO (10%), CFO (13%), CIO (15%), CMO (10%), and other C-level
executives (13%). They represented a wide range of industries, including manufacturing (28%), banking/financial services
(23%), retail (10%), telecommunications (10%), insurance (7%), and energy (7%)
Geographically, 37% of respondents were located in the U.S., 6% were located elsewhere in the Americas, 39% were from
Europe/Middle East/Africa, and 18% were from Asia Pacific.
Acknowledgements
The Global CXO Outlook was produced by Forbes Insights in association with Wipro.
For Forbes Insights, Bina Jang wrote the report. Stuart Feil is the practice’s editorial director, and Christiaan Rizy is the director.
For more information about Forbes Insights, visit: www.forbes.com/forbesinsights
Forbes Insights would like to acknowledge the support and contributions of Karthik Negandra and Rahul Koul of Wipro in
helping to develop the theme of the study and refine the report.
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