The challenges insurers face in identifying and then making the most of growth opportunities-this column's theme last month-are turning out to be among this year's "center-stage issues." Or, as Ginni Rometty, managing partner, IBM Business Consulting Services, declared last month when presenting BCS' Global CEO Study 2004, "Growth is back on the agenda."
The new study found that of the 450 CEOs who participated in the study (15.9 percent were from financial services), 80 percent said their primary objective has shifted from cost-cutting to revenue growth, while acknowledging that accomplishing those goals could be stymied by a lack of corporate agility. Two-thirds of the respondents expect growth to come from new products they will develop, and more than half expect to enter new markets to find growth opportunities.
For me, the study's findings raise as many questions about growth strategies as they answer. Perhaps the most perplexing has to do with the professed intention to grow via new product development. That may work for a consumer products company, but how viable is it in financial services, where most products have become commoditized and the best a CEO can hope for is to identify and target the customers who will pay for the most expensive and/or profitable products and services?
Also, while the CEOs surveyed by IBM had no doubts about their organizations' shortcomings, it doesn't appear their own capabilities as leaders were analyzed. Surely, recent history proves the competencies (or lack thereof) of a chief executive play a critical role in determining an organization's prospects for achieving growth and profitability. But statistics may not reveal something that hits so close to home.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio