Rating the management toolkit

By Edward Prewitt

Balanced Scorecard, benchmarking, core competencies – companies’ use of these and many other management tools and techniques has boomed since the start of the recession in 2000, according to a survey conducted by consultancy Bain & Co.

On average, companies in the survey – which was mailed to CXOs at companies of all sizes and industries worldwide – used 16 out of 25 tools and techniques in 2002, versus 10 out of the same 25 in 2000. The top three were strategic planning, benchmarking, and mission and vision statements, all used by more than 80 per cent of the respondents.

The turn to management tools is driven by a search for profits, says Darrell Rigby, a Bain director who launched the annual “Management Tools and Trends” survey in 1993. “Now that they’re squeezed, people are using these methods in search of growth,” he says.

The two tools showing the sharpest increases in usage are of particular interest to CIOs: 78 per cent of the 708 senior execs responding to the survey said they used CRM in 2002, up from 35 per cent in 2000; and 62 per cent of respondents used applied knowledge management methods in ’02, compared with 32 per cent in 2000.

The popularity of CRM was the survey’s biggest surprise, in Rigby’s view. “Some people thought CRM would follow the route of reengineering,” he says. But CRM is proving effective at many companies, as indicated by rising satisfaction levels among survey respondents – from well below average in the 2000 survey to just about average in 2002.

Rigby attributes this increase to greater sophistication in companies’ use of CRM. He notes that many executives use a low-tech definition for CRM rather than automatically equating it with software. “CRM is almost becoming the new vocabulary for a customer-focused strategy,” he says.

The survey’s signals are mixed on knowledge management. KM registered some of the lowest satisfaction rates. “When people are measuring the net benefits, they’re saying the benefits aren’t as high as they thought they would be, and the costs are 10 times as high,” Rigby comments. Even so, the use of KM increased among survey respondents, in line with the general upswing for all methods.

Another survey finding of interest to CIOs: only 19 per cent of the executives agreed with the statement that “We have cut back too far on IT spending.” Fully 57 per cent disagreed. Is that a call for CIOs to align all IT projects with business needs, or just to rename them as management tools and techniques?