CEO Survey Finds 'Globalization' Among Top Challenges, U.S. Firms Doing Only Fair Job

While U.S. business executives believe that becoming a global company is an important trend, they also believe most U.S. companies are only doing a fair job at it, finds a survey on leadership challenges for the 21st century. The private-sector Foundation for the Malcolm Baldrige National Quality Award commissioned the survey of executives in a broad range of U.S. companies and other organizations. The results from the more than 300 CEOs who responded were tabulated and analyzed by Louis Harris & Associates, Inc.

The survey identifies major trends, such as globalization, that are affecting U.S. companies and the ability of companies to take advantage of these trends; CEO skills needed for the future; the changing importance of stakeholders; the types of companies likely to be major competitors; and the role and value of the Baldrige quality program and criteria for performance excellence in stimulating improvements in quality and competitiveness.

"Now in its 10th year, the Baldrige quality program has evolved into a standard of excellence that is accepted and emulated around the world," said Roger Ackerman, president of the Baldrige Award Foundation and chairman and chief executive officer of Corning Incorporated. "This survey will play a key role in shaping and defining the Baldrige Award criteria and program in its efforts to help U.S. companies attain or retain their competitive edge in the global marketplace," he said. Most of the CEOs surveyed said the Baldrige program was extremely or very valuable in stimulating improvements in quality (79%) and competitiveness (67%) in U.S. businesses.

In addition to becoming a global company, five other trends affecting large U.S. companies were determined to be "major" by more than 70 percent of the CEOs surveyed: improving knowledge management (88%); cost and cycle time reduction (79%); improving supply chains globally (78%); manufacturing at multiple locations in many countries (76%); and managing the use of more part-time, temporary and contract workers (71%).

While the executives believe these trends and others will change the business environment, those surveyed also believe that most major corporations are not prepared to take advantage of them. For example, 78 percent rated U.S. companies as fair or poor on becoming truly global companies, and 82 percent as fair or poor on improving knowledge management and the use of new information technology.

A wide variety of stakeholders are important to corporate leaders. More than 75 percent of the CEOs said international customers, consumers and employees are becoming more important. At the other end of the spectrum, 70 percent said labor unions are becoming less important.

In other findings, most of the executives believe:

• U.S. companies do a better job of developing corporate strategies than of implementing them;
• it is more important for major U.S. companies to expand their markets than to increase their market share; and
• the most serious competitors in the next decade will come from U.S. companies not yet in the Fortune 500 or from foreign companies.

The Baldrige Award was established by Congress in 1987 not only to recognize individual U.S. companies for their quality achievements but also to promote quality awareness and to provide information on successful quality strategies. The Commerce Department’s National Institute of Standards and Technology manages the Award program in conjunction with the private sector.

Studies have found that the benefits for companies using performance excellence models, such as the Baldrige criteria, include increased productivity, improved profitability and competitiveness, and satisfied employees and customers. For example, the fictitious "Baldrige Index," made up of publicly traded U.S. companies that have received the Baldrige Quality Award during the years 1988 to 1996, has outperformed the Standard & Poor’s 500 by almost 3 to 1.

The Foundation for the Malcolm Baldrige National Quality Award is a not-for-profit private-sector organization founded to endow the Award program. A broad section of U.S. companies contribute to the Foundation. Leaders of prominent companies serve as Foundation trustees in support of the Award program.

NOTE TO EDITORS: A copy of the survey results is available by calling the NIST Public and Business Affairs office at (301) 975-2762. It also is available on the World Wide Web at http://www.quality.nist.gov/ceo-rpt.htm. For further information regarding the Baldrige National Quality Program, contact Jan Kosko, (301) 975-2767, email: kosko [at] nist.gov (kosko[at]nist[dot]gov).

Contacts regarding the survey: Monica Ott, (607) 974-8769, for Roger Ackerman (chairman and CEO, Corning Incorporated); Nancy Ledford, (423) 229-5264, for Earnest Deavenport (chairman and CEO, Eastman Chemical Co.; past president, Baldrige Award Foundation); Chuck Roberts, (973) 209-3294, for Joel Marvil (chairman and CEO, Ames Rubber Corp. and member, Baldrige Award board of overseers); and Barry Rogstad (president, American Business Conference and chairman, Baldrige Award board of overseers), (202) 822-9300.