Nearly sixty percent of executives say economic conditions are improving in their industry, but majority very concerned about meeting earnings targets in 2013, finds Bain & Company



World’s Most Comprehensive Global Study on Management Tools and Trends Completes its 20th Year, Now Includes Nearly 13,000 Respondents from More Than 70 Countries

New York, NY—April 22, 2013—Though a clear majority of international executives say economic conditions are improving in their industries, overall confidence levels have slipped over the past two years, according to the 2013 edition of Bain & Company’s biennial “Management Tools and Trends Report.” Fifty-seven percent of the 1,208 international executives surveyed agreed that economic conditions are improving in their industries, down from 75 percent who agreed in the 2011 survey. The disparity may reflect softer growth within certain BRIC economies in 2012 and increased anxieties across the Eurozone. It may also reflect a rebalanced level of “realistic optimism”, according to Bain, versus immediately following the downturn when executives may have anticipated a swifter return to steadier economic footing. Leading the optimism curve are the Manufacturing, Media and Entertainment, and Consumer Products industries, suggesting that consumer confidence is on the rebound. Conversely, executives from industries facing greater government regulations, Utilities and Energy, Pharmaceuticals, Biotech and Healthcare, report they are the least confident that conditions are improving.

“Executives around the globe are still managing through unpredictability, fierce headwinds and heavy doses of regulation,” said Darrell Rigby, senior Bain partner and founder of the report. “And while the pace of recovery has perhaps slowed, optimism still exists despite these many roadblocks—and that’s good news.”

According to the report, U.S. and European companies are feeling some of the greatest concerns. Executives in both regions feel that customers aren’t as loyal as they used to be. U.S. executives also feel that healthcare costs will have a significant impact on their number of full-time employees. Asian executives express a combination of confidence and concerns. They feel they are well positioned on several fronts, including a strong sense of confidence in their ability to adapt as a significant competitive advantage. But Asian executives still cite many challenges for the coming year. Two-thirds feel very concerned about meeting earnings targets in 2013. Latin American executives are the most optimistic about economic conditions improving in their industry, with 80 percent agreeing.

The report also sheds light on changing workplace demographics and the stranglehold of excessive complexity across a variety of industries. Roughly 70 percent of executives agree that the work preferences of younger generations are forcing corporate cultures and operating processes to change—while 60 percent claim excessive complexity in their industry is skyrocketing costs and hindering growth. Sustainability practices also remain a key focus of international executives, as 60 percent of executives said they will pursue sustainability initiatives even if it increases costs—a significant jump from 2011.

Other notable findings from the Management Tools and Trends 2013 survey:

  • Two-thirds of executives feel customers are less loyal to brands than they used to be
  • Approximately half fear of a cyber-attack greatly impacting their business
  • Nearly 60 percent say healthcare costs will significantly impact the number of full-time employees they will have over the next three years
  • Nearly 70 percent report that over the next three years, spending on IT must increase as a percentage of their revenue, with half of all respondents agreeing their current IT systems are constraining profit growth
  • Wholesalers, Distributors and Logistics firms, the Chemicals and Metals industries, and Real Estate firms are most likely to say pricing transparency has affected their pricing strategies
  • The Media and Entertainment industry, the Retail industry, the Construction & Real Estate industry, and Consumer Product firms are most likely to feel the positive impact of social media

Bain has observed a more strategic focus and use of management tools over recent years. The average number of management tools used by executives worldwide—including Employee Engagement Surveys, Benchmarking and Business Process Reengineering—dropped to 7.4 tools, continuing a six year downward trend. Large companies continue to use more tools overall.

“Executives are getting more strategic in their selection process,” said Rigby. “Our 20-year research study of management tools continues to be a valuable source for executives who seek to understand the patterns of tool usage and satisfaction. In many cases it seems to be a question for executives of return on investment and the actual value derived from these tools. These data serve as a good reminder to champion enduring strategies and not fleeting fads—and to choose the best tools for the job at hand.”

Interestingly, tool preference shifted based on geography. In North America, the number one tool used was the Employee Engagement Survey, and across EMEA, executives said the number one tool used was the Balanced Scorecard. However, firms in Latin America used a different mix of tools, including Business Process Reengineering and Big Data Analytics, which are less popular globally. Meanwhile, firms in Asia-Pacific were more likely to use Total Quality Management tools.

Concluded Rigby, “We are hearing profit concerns from executives around the world in terms of the growing investments companies need to make in information technology, healthcare, taxes, sustainability, pricing and product differentiation. That is forcing them to look for creative ways to not only grow revenues, but contain costs to meet their earnings targets. And using the right management tools, applied in strategic ways, can be very helpful in those pursuits.”

Editor’s Note: For a copy of Bain’s “Management Tools and Trends 2013” report or to schedule an interview with Darrell Rigby, please contact Dan Pinkney at or +1 646 562 8102.

About Bain & Company, Inc.

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