We talked a lot about the Balanced Scorecard, Strategy Maps, and KPIs, but the toolkits of the top managers always hides some secrets. Let’s have a look in the toolkit of top managers from the international companies from both established and emerging markets to find out if there is something that one could use for his own business.
Management Tools & Trends Research
Since 1993, Bain & Company, one of the world’s leading management consulting firms, conducted “Management Tools & Trend” research. This year Darrell Rigby and Barbara Bilodeau from Bain & Company, prepared “Management Tools & Trends 2013” .
- Darell Rigby is a veteran of this survey, he has conducted Bain’s Management Tools & Trends since 1993.
In the latest survey 1,208 executives from all over the world were interviewed.
- Top managers are in the search of the business tools that will help them to meet earnings targets after the economic downturn.
This research helps to understand what is working and what is not for global executives. The research lists 25 of the most popular business tools; some tools are well-known to the general public, and some became popular recently.
The five most used tools
According to the survey, this year the five tools used most often were:
- Employee Engagement Surveys (the most popular in North America)
- Strategic Planning
- Customer Relationship Management (the most popular in the Asia-Pacific region)
- Balanced Scorecard (the most popular in EMEA countries – Europe, the Middle East and Africa)
Before we go on, I’d like to make one important note. I believe sometimes it is hard to distinguish specific tools, as specific implementation might be different. For example, we’ve discussed this question regarding the Balanced Scorecard in the article “Canonical Balanced Scorecard by Norton and Kaplan or modified one?” . Taking this into account it is hard to say how exactly which business tool was implemented in the specific company.
Employee Engagement Surveys
Global executives name the problem of employee engagement as one of the top priority issues that companies want to address. Engaged employees result not only in lower costs, but in the delivery of more loyal customers.
- We have discussed facts about employee engagement as well as the measurement and management problem.
It is known as comparing performance indicators across various businesses or industries. As was described in the Big picture of the Balanced Scorecard , benchmarking, together with strategic planning, can be a part of the Balanced Scorecard processes.
Mission and vision
Another business tool that was not in the list of the most popular, but is still a part of the Balanced Scorecard is:
- Mission and Vision Statements
Some companies prefer to put these at the top of the strategy map.
Total Quality Management is on the list as well. Those who plan to incorporate a Balanced Scorecard might be interested in having a look at this article, where 6 Sigma, TQM and BSC are compared.
New tools in the survey
One of the new business tools added to the survey this year was Big Data Analytics. In the business domain this term is populated by the producers of Business Intelligence software systems. Their promise is to extract valuable insights from the massive of data available so that top managers could make informed, data-driven decisions. Again, the implementation depends a lot on the company. As was discussed, a Balanced Scorecard can be a valuable part of the BI.
According to the survey , during the years 2008-2009 companies relied on cost-cutting tools. Most executives acknowledged their failure to cut costs by 10% (40% of executives failed according to survey) or 20% (60% of executives failed according to the survey).
As concluded by the authors of the survey, the 3 most popular cost-cutting tools “often hurt, rather than improved, stock performance”:
- Downsizing – in simple words reducing costs by reducing personal and business structures;
- Outsourcing – refers to contracting third-party contractor.
- Business Process Reengineering (the most popular in Latin America)
As long as companies understand the inefficiency of all cost-cutting tools, they adopt new ones:
- Zero-based Budgeting – The budget is not inherited from the previous year, but has to be developed from scratch.
- Complexity Reduction – Refers to finding and eliminating complexity in strategy, products, IT. Read more…
Other business tools in the survey
- Change Management Programs
- Core Competencies
- Customer Segmentation
- Decision Rights Tools
- Mergers and Acquisitions
- Open Innovation
- Price Optimization Models
- Satisfaction and Loyalty Management
- Scenario and Contingency Planning
- Social Media Programs
- Strategic Alliances
- Supply Chain Management
The main conclusion that we can draw from the research is that the Balanced Scorecard is still on the list. Moreover, it is in the top-5 most used tools. Not a surprise that some implementations of the Balanced Scorecard are growing and absorbing other business tools, such as strategic planning and benchmarking.
Finally the employee engagement topic seems to have become even more popular. In the previous article we have shared our ideas about integrating employee engagement KPIs and actions into the Balanced Scorecard.
- ^ “Management Tools & Trends 2013”, Darrell Rigby, Barbara Bilodeau, 2013, http://www.bain.com/Images/BAIN_BRIEF_Management_Tools_%26_Trends_2013.pdf
- ^ “Canonical Balanced Scorecard by Norton and Kaplan or modified one?”, 2013, Aleksey Savkin, http://www.bscdesigner.com/implement-bsc-5-steps.htm
- ^ “Get the big picture about Balanced Scorecard, its connections and roles”, 2013, Aleksey Savkin, http://www.bscdesigner.com/bsc-big-picture.htm