CEO survey 2012


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CEO survey 2012

  1. 1. CEO Survey 2012 Searching for
  2. 2. General OverviewWe are proud to announce that our CEO Survey has this year its fifth anniversary, so that we can nowtalk about a nice tradition. We also use this opportunity to thank everybody who participated in itover the years and contributed to its success. We are especially happy to see that the number ofparticipants has constantly been growing and that this year all the records have been broken: over70% addresses filled in the questionnaire. It is possible that due to the complexity of the situation alarger number of General Managers and CEOs felt the need to comment on current circumstances,and maybe somewhat different questions played a role in it: this year we have tried to direct thequestions more to searching for concrete solutions and ideas, and our participants reacted eagerly.Besides suggested responses, we asked for further clarifications and got very interesting comments.Like every year, we had both Serbian and foreign CEOs participating in the Survey, thus showing thereal picture in our market.The most of the CEOs have been in the leading position for over 5 years and the majority of themcome from Professional Services, Consumer Products and Financial Services.Almost one half of the participants believe that Sector of Food Production and Processing has thebest prospects for growth, while one fourth claims the same for the Agriculture. Only 10 percent ofthe CEOs in Serbia think that Industry has a growth perspective, and each of the remaining sectorsgot a negligible number of votes.Finding a strategic partner is absolutely the most efficient method of financing which could inducethe development of companies in Serbia. Since more than one answer was possible, all other answersgot between 20 and 30 percent, except financing from foreign exchange reserves, which is obviouslyregarded as the worst solution. In connection with this is the result that EU countries, with over 80percent, are far the most desirable partner, while Russia and the ex-Yugoslav countries share thesecond position with slightly over 20 percent. It is interesting that BRIC countries got only 8 percent,and some of the participants named ex-Soviet republics, such as Kazakhstan and Azerbaijan.As regards the business in Serbia in the previous year, the impression is that nothing importanthappened. Firstly, there were no significant investments, except a few exceptions such as Fiat inKragujevac or NIS in Pancevo Refinery. Also, CEOs find that running a business in Serbia did not at allbecome easier in the previous year.The situation is somewhat better when it comes to running the business in their own companies,because over 60 percent of the participants claimed they managed to have rationalization of business.It is very encouraging that one third of CEOs declared business volume increase, and one fourthinvested into employee development. In Tune with the Local Connected to the World
  3. 3. The solution for getting out of the crisis within their own companies our participants see in internalrestructuring of the management team, giving chance to younger managers and in change of thestrategy. There were a lot of concrete suggestions: Focus on core business ore flexible business by rationalization of work process and introducing inovations (products, M services) Vocational and functional training of employees Complete reorganization of business Defining clear long-term strategy of development in SerbiaAlthough a vast majority of CEOs find that the professionalization of management in state-ownedcompanies is a must, almost half of them would not accept the offer to lead such a company. Thosewho would accept insist on the flexibility in choosing their team, on variable remuneration dependingon results and on flexible strategy.Some of the typical comments: The risk of accepting the job and responsibilities for professional managers is extremely big, while on the other hand there is no guarantee that the business environment will be fair. Although state-owned companies do present a great challenge and possibility for highly qualified professionals. Provided that I launch my strategy, choose the team, run independent policy, and have full freedom in running business, I would be prepared to guarantee with personal bill on my entire property.Last year almost 80% of the participants said that the perspective of Serbia is in agriculture. However,it seems that the census of agriculture households was the only significant activity realized in theprevious year, along with state subventions for certain agriculture sectors (e.g. wine production, cattlebreeding…).Most of the CEOs agree that the banking sector could help Serbian economy to a large extent by reducinginterest rates and by debt restructuring. As regards companies’ solvency, it could be improved first of allby more efficient debt repayment by state companies/institutions to private sector, but also byintroducing the regulation on paying the VAT after the realization, and by restructuring debts with banks.It is interesting that the coaching for top management, along with executive search, is the servicewhich CEOs recognize as the most needed in their companies.Another turbulent year is ahead of us. We would like to see it as an opportunity for new creativity,brave actions and moves, about which we are hopefully going to read in our CEO Survey next year.Until then we wish you a lot of success in finding innovative solutions.
  4. 4. Experience as a CEOMost of the participants in the Survey have been CEOs for over five years.1. How long have you been a CEO? 13,8% 19% 67,2% 1–3 years (13,8%) 3–5 years (19%) Over 5 years (67,2%)IndustriesMost of the participants in the Survey come from the Professional Services, Consumer Productsand Financial Services.2. What industry do you work in? Consumer Products (18,6%) Technology (11,9%) Logistics and Transport (6,8%) Industry (17%) Financial Services (18,6%) Life Science and Healthcare (3,4%) Professional Services (22%) Government Institutions and Non-Profit Organizations (1,7%) In Tune with the Local Connected to the World
  5. 5. Perspectives for growth and developmentAccording to the opinion of CEOs in Serbia, Food Production and Processing, as well as Agriculturehave the best perspective for growth.3. Where do you see the perspective for Serbian economy? 6,8% 10,2% Industrial production (10,2%) 6,8% Agriculture (25,4%) 1,7% 5,1% Food production and processing (44%) 25,4% Tourism and hospitality industry (1,7%) New technologies (5,1%) 44% Renewable energy sources (6,8%) Other (6,8%)Comments:- ervice industry. S- ood production, energetics and infrastructure. F- fficient work rather than surviving of state-owned companies on public funds (financing the E losers). Serbian government should start dealing with economic problems rather than their own ambitions and petty crimes with public (borrowed) money. Most efficient financing methodsThe majority of the participants in the Survey believe that finding a strategic partner would be themost efficient financing method which could stimulate the development of companies in Serbia.4. Which financing methods would be most efficient to stimulate thedevelopment? Consortium of domestic investors (20,7%) 3,4% 20,7% Strategic partnership (56,9%) 25,9% 3,4% Financing from foreign exchange reserves (3,4%) Foreign funds (24,1%) 56,9% 24,1% Borrowing from banks under more favorable conditions (29,3%) 27,6% Further privatization (27,6%) Concessions to foreign investors (25,9%) 29,3% Other (3,4%)Comments:- tate-owned development banks, Development fund and borrowing from banks with state S guaranties (model that should be further developed).- rivatization with real payments, establishing material responsibility for top managers in public P and state-owned companies, based on submitting personal bill when appointed to the managing positions.
  6. 6. Business development in Serbia EU countries are most desirable strategic partners of Serbia. 5. Who is a strategic partner of Serbia? 25,4% EU (81,4%) Russia (25,4%) 8,5% BRIC (Brazil, Russia, India, China) (8,5%) 8,5% Middle East countries (8,5%) 81,4% 3,4% USA (3,4%) 22% Ex YU countries (22%) Other (5,1%) 5,1%Comments:- ussia and ex-Soviet republics (Kazakhstan, Azerbaijan, etc). R- arket, i.e. wholesalers choose products which they want to sell. It means that a high-quality M product adapted to client needs will find a strategic partner anywhere, whereas those of poor quality won’t find any strategic partner at all.- erbia and its economy are not a desirable partner and should try to present themselves as a S reliable partner with all potential partners. Most of the CEOs think that there were no significant investments in Serbia in the previous year. 6. Do you think that significant 6,9% investments in Serbian economy were made in the past year? Yes (6,9%) No (93,1%) 93,1% Comments: - IS, Pancevo Refinery, Zastava-FIAT Kragujevac. N - iat, Philip Morris. F - o, and that is one of the main reasons for the difficult situation of Serbian economy. N - nfortunately, with the excuse of political situation (elections) and global economic crisis a little U or almost nothing has been done. There is no clear plan in which direction Serbia should go. Industry has been totally neglected. Potentials in the region and Europe should be seriously investigated, an estimate of the investment necessary for initiating industry again, employ able management and give a chance to younger people. - nadequate business environment for foreign investment. IIn Tune with the Local Connected to the World
  7. 7. The majority of the participants in the Survey agree that running business did not become easierin Serbia in the past 12 months.7. In which way did running a business become easier in Serbia during theprevious year? 3,4% 5,2% 1,7% 1,7% Legal procedures are less complicated (5,2%) 91,4% Political situation is more stable (3,4%) Corruption is reduced (1,7%) Tax policies are simpler (0%) It did not become easier (91,4%) Other (1,7%)Comment:- ureaucracy and extremely unproductive solutions in key economic regulations have made things B even more complicated.Business results in the previous yearMost of the CEOs named the rationalization of business as the most significant achievement in theprevious year. On the other hand, neither reduction in business volume nor salary and benefit cutscould have been avoided.8. Which of the following did you achieve in the previous year? Business volume increase (33,9%) 17% Investment in employees development (25,4%) 33,9% 13,6% Rationalization of business (62,7%) 62,7% 10,2% Expansion into new markets (17%) 25,4% Introduction of new technologies (13,6%) 5,1% Finding a strategic partner (10,2%) None of the above (5,1%)Comment:- onditions for running business did not make it possible to realize any of the mentioned activities. C
  8. 8. 9. Which of the following did you fail to avoid in the past year? 29,3% Dismissal of employees (29,3%) 15,5% Salary and benefit cuts (34,5%) 44,8% 8,6% Reduction of business volume (44,8%) Further borrowing (15,5%) 34,5% 13,8% Closing a part of the company (8,6%) Something else(13,8%) Comments: - ll the above mentioned elements, were more or less present in running the business. A - ebt collection. Long payment deadlines and impossibility of collection. D - ack of real growth. L Searching for solutions The best solutions for companies to overcome the crisis, according to our participants , are internal restructuring of the management team and giving a chance to younger managers. 10. What do you see as a solution for your company to overcome the crisis? Internal restructuring of the management team (37,5%) Giving a chance to younger managers (37,5%) External recruitment of managerial staff (16,1%) 7,1% New loans (7,1%) 37,5% 37,5% 16,1% 33,9% Change in strategy (33,9%) Comments: - ocus on core business. F - ew services and cost reduction under current circumstances. N - dditional programs in type of services. A - reating new offer to the market in line with needs. C - ore flexible business by rationalization of working process and introducing innovations M (products, services).In Tune with the Local Connected to the World
  9. 9. - usiness environment is a problem (macro factor), but the largest number of organizations B operate without clear strategies (in all dimensions) and defined leadership programs.- ocusing on market potentials. F- ocational and functional training of employees. V- omplete reorganization of business. C- y adapting to new trends in constructing industry it is necessary to restructure the current B organizational structure and redefine the existing strategy.- efining clear long-term strategy of development in Serbia. D- ocus on financing industries important for the future of Serbia and the region. F- o focus more on productivity gains/profitability rather than on market share growth. T- eek new business model. S- ew markets. NThe CEOs agree that professionalization of top management in state-owned companies isinevitable.11. Do you find that the professionalization of top management in state-ownedcompanies is inevitable? 91,5% 3,4% 5,1% Yes (91,5%) No (3,4%) I do not have opinion on this (5,1%)
  10. 10. The CEOs named the following conditions under which they would accept to take over managing a state-owned company: flexibility in creating their own team and variable remuneration depending on results. A significant part of our participants would not accept such an offer. 12. Under what conditions would you take over managing a state-owned company? 5,1% 3,4% 33,9% 13,6% 44,1% 18,7% 32,2% 45,8% Variable remuneration depending on results (33,9%) Long term contract (13,6%) Flexibility in creating your own team (44,1%) Flexibility concerning the strategy (32,2%) Creation of neutral professional committee for the control of the working process/results (18,7%) Possibility of using state subventions (3,4%) I would not take over a state-owned company (45,8%) Other (5,1%) Comments: - he Answer: “I would not accept” – is the result of the following: before introducing professional T management in state-owned companies it is necessary to perform several preparatory actions and define clearly business philosophy and values of such companies. There is no “know-how” in this part and most probably no political will. The risk of accepting the job and responsibilities for professional managers is extremely big, while on the other hand there is no guarantee that the business environment will be fair. Although state-owned companies do present a great challenge and possibility for highly qualified professionals. - rovided that I launch my strategy, choose the team, run independent policy, and have full P freedom in running business, I would be prepared to guarantee with personal bill on my entire property. - Golden parachute” – Option that in case the employer (the state) decide to terminate the working “ contract with us, I should be remunerated with one to three year gross salary.In Tune with the Local Connected to the World
  11. 11. Census of agriculture households was the most important activity related to the investments intoagriculture in the last year.13. Last year almost 80% of you claimed that the perspective of Serbia is investingin agriculture. What do you think was done in the course of the past year? Census of agriculture households (48,2%) Merging of land properties (9,3%) State subventions for certain agriculture sectors (e.g. wine production, cattle breeding…) (37%) 9,3% Development of organic food production (16,7%) 16,7% 48,2% 16,7% Other (16,7%) 37%Comments:- ot enough. N- nsufficient. I- ery little with the aim to improve production and placement of products. Not a kilometer of overgrown V irrigation channels was cleaned, and the irrigation system was not increased for even 2 km.- othing. NMajority of the participants agree that banking sector could help Serbian economy by reducinginterest rates and by restructuring existing loans.14. How can the banking sector help Serbian economy? Reducing interest rates (30,5%) Increasing grace period (11,9%) Interest rates write-off (0%) Start-up loans (10,2%) 10,2% 10,2% 10,2% Restructuring debts (27%) 30,5% 11,9% Offering finance consultancy services (10,2%) 27% Something else (10,2%)Comments:- combination of larger number of parameters is definitely necessary. Also, defining financial A market is a precondition.- nrestricted opening of financial market to foreign banks (like UAE) or nationalization of banks U (like Iceland).- ranting long-term loans (over 10 years) with lower interest rates. G- etter understanding of clients with open and good-willed two way relationship; realistic B estimation of capacities and cooperation volume.- o continue to finance the Serbian economy by supporting good projects/clients. T- ecoming a more professional and reliable partner. B
  12. 12. Solvency of companies could be improved by more efficient debt repayment by state companies/institutions to private sector, as well as passing the Regulation on paying the VAT after the realization.15. How can the insolvency of companies improve? 6,8% 47,5% 54,2% 15,2% 35,6% 64,4% 30,5% 18,6%Comments: Debt restructuring by banks (47,5%)- ash Flow Management. C Regulation on paying the VAT after the realization (54,2%)- limination of state debts and companies debts (with E payments, of course) and more discipline in financial Payment of capital gain tax at the end markets and more efficient sanction systems for of the fiscal year (15,2%) responsible persons (ban on business activities, More efficient debt repayment by state confiscation of personal property, personal companies/institutions to private sector (64,4%) Regulation on cutting the payment due period (35,6%) bankruptcy…) through efficient work of courts.- omplete reform of tax system and easier C Development of factoring services (30,5%) procedures, as well as unique implementation of regulations by all tax offices in the territory in Serbia. Development of securities market (18,6%)- eduction up to 30 days, both companies and the R state. Other (6,8%)External recruitment of top management (executive search) and coaching for top managementare recognized as the most needed services for companies in Serbia, CEOs claim.16. Which of the following consultancy activities do you find most important foryour company? External recruitment of top management (executive search) (26,3%) Assessment of the existing management team (14%) Coaching for top management (24,6%) 8,8% Board advisory (8,8%) 7% 26,3% 24,6% 19,3% 14% Proposing the strategy for human capital development (19,3%) Something else (7%)Comments:- anagement consulting. M- inancial consulting. F- he answer “something else” was given because a compilation of all the above mentioned T activities is necessary. A single answer is impossible to give. Serbia needs a new value system and new business approach.- ompany should outsource the following activities: legal, integrity/risk check. C
  13. 13. About Stanton ChaseStanton Chase International is an internationally specialized Executive Search company, whichby using the expertise of its consultants, provides its clients with the best services of finding andassessing the top managerial staff. What makes us different is our knowledge of international,regional and local movements on the workforce market, as well as the accessibility to candidatesfrom all over the world. Stanton Chase International is a company which consists of 73 officesin 46 countries around the world. According to the most recent research in this industry, thecompany is ranked one of the top 10 leading international Executive Search consulting firms interms of size, speed of development and reputation. Among its clients the company is especiallyvalued for its exceptional quality of business, above all for its successful work assessment in thecomplicated process of finding and choosing top management staff.Stanton Chase Belgrade office was founded in 2002 and provides a full spectre of services inthe area of Human Resources (HR) based on the multifaceted approach to the human resourceneeds of our clients. Such a multifaceted approach includes not only different services, but aboveall our ability to adapt to the needs of the client. Our complete activity during the selection ofcandidates or consulting is adapted to the specific needs of every client and is based on the typeof industry that the client belongs to as well as their characteristic needs.Today Stanton Chase Belgrade is placed amongthe leading Executive Search companies in Serbia.Our team constitutes of consultants and researchers specialized for certain branches of industry.We particularly want to emphasise that our consultants have acquired their knowledge, skillsand experience in leadership positions in the industries that they are specialized in.Our specialized fieldsWe offer industry specializations in nine dynamic fields:  Industrial  Technology (IT Telecom)  Consumer Products Services  Life Sciences Healthcare  Financial Services  Professional Services  Natural Resources Energy  Logistics Transportation  Government, Education Non ProfitUsing the latest methodology for the assessment of competences and personality profiles (on-linepsychometric testing and strategic exercises in the form of business simulations) we provide asuccessful and fast assessment of the best staff relevant for project work.Additional services­­  Internal assessment  Coaching  Company restructuring Blvd. Oslobodjenja 75, 11000 Belgrade +381 11 3973676
  14. 14. In Tune with the LocalConnected to the World