Business leaders focus on human capital to counter global slowdown, reveals CMI study
Tom Newcombe, January 14, 2013
CEOs, presidents and chairman from the world's leading employers have identified developing and engaging human capital, achieving operational excellence and increasing innovation as the top three challenges facing them in 2013, according to research published today by business research organisation, Conference Board in partnership with the Chartered Management Institute (CMI).
The CEO Challenge 2013 report shows that business leaders in cities including London, New York and Shanghai agree that in an environment of slow economic growth, continuous improvement of internal capabilities is a prerequisite for survival.
The report asked more than 700 leaders between September and November 2012 to rank in order their top five challenges for 2013.
It found human capital was named as the number-one challenge in both Asia and Europe. The respondents also identified strategies including growing talent internally, providing employee training and development and improving employee engagement as ways of improving human capital.
Despite this strong people focus, improving leadership development programmes, which was ranked the second most important strategy for tackling human capital challenges in 2012, drops to tenth in the current survey. The CMI has warned leaders that neglecting to improve their management and leadership capacity, risks undermining one of the most powerful methods they have for meeting these challenges.
Petra Wilson, director of strategy and external affairs, CMI, said: "Faced by tough market conditions, it is encouraging to see employers focusing more on building their human capital. They are also right to seek to grow the talents of their employees at all levels in the organisation. However, the view of CEO's that leadership development is a lower priority is of significant concern.
"There is a real risk that business leaders overlook one of the most critical aspects of the strategies they are trying to implement, which is the role of their managers. For example, the line manager relationship has been identified as the single most important factor in determining levels of employee engagement.
"What's more, there is evidence that improving management and leadership can boost levels of business performance by as much as 23% (according to the CMI survey, The business benefits of management and leadership development 2012), which could make the difference between survival and failure in tough markets. Failing to see management development as a key strategy to develop and engage employees could be making a costly mistake."
The online survey of 729 global leaders (Asia - 395, Europe - 136, United States - 138, Rest of the world - 60) was conducted between September and November 2012.