Mercuri Urval study – media background information and details

Customer orientation is the most important growth driver in Europe A comprehensive survey performed by the consulting group Mercuri Urval, which included 844 senior executives in Austria, Belgium, Denmark, France, Germany, Italy, Netherlands and Switzerland, has shown: customer orientation is the most important driver for sustainable growth in 2010. Better customer retention, more customer loyalty and a high quality of service were named as the key tasks for the future. 4 February 2010 – The effects of the financial crisis are clearly visible in all companies, regardless of

their location or sector. Managers have therefore implemented measures for reducing costs or improving returns. According to the survey results, the ongoing action plans have five key areas. The task of acquiring new clients was mentioned most frequently, with 85% of those surveyed mentioning this, followed by the objectives of increasing profitability (79%), improving the quality of service (79%), strengthening customer retention / loyalty (73%) and increasing innovation frequency (71%). Although these key topics were mentioned in all of the countries, with one or two different levels of emphasis, the results have shown some country-specific differences. In Belgium and the Netherlands, the identification of new business areas and the strengthening of intellectual / human capital were also mentioned to the same degree. In contrast, stronger focus is placed on profitability and, above all, the acquisition of new clients in Germany. Companies in Denmark also take measures for improving organic growth into consideration, while the Italians focus on the financial health of clients.

Companies under the influence of the crisis

Seven out of ten companies said they are very much (37%) or rather affected (36%) by the current economic developments. Only 26% of the companies said they are rather unaffected or completely unaffected (1%) by the economic and financial crisis. The effects of the crisis are disproportionately evident in Belgium, Denmark and Italy, whereas the effects on the economy in France and Switzerland are relatively moderate, with 41% of those surveyed in each country stating the effects of the crisis were minimal or not being felt at all.

Service providers and large companies more strongly affected

In Europe, more companies have been affected in the service provider sector than in the industrial sector. 74% of the service providers stated that they were affected to a great or very great degree, whereas only 69% of the companies in the industrial sector said they were affected to such a degree. European companies with more than 1000 employees are being affected more strongly by the challenges resulting from the crisis (78%) than medium-sized companies with 51 to 1000 employees (72%) and small companies (71%).

Cautious optimism

When asked for their opinions regarding future development, those surveyed were generally optimistic. 22% and 39% are of the opinion that the economic situation will be better or slightly better over the next 12 months. 24% said the situation would be neither better nor worse. The

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opinions of industrial (62% clearly better or slightly better) and service provider companies (56%) are relatively balanced. The managers in Denmark (78% clearly better or slightly better) and Italy (71%) are clearly more optimistic, whereas the managers in France (49%) and the Netherlands are less optimistic (54%). However, industrial companies in France (50%) are clearly more optimistic than those in the service provider sector (33%).

Clear success factors

When asked about the key success factors for development after the current economic crisis is over, all European managers agree that client / market orientation is the success factor that will increase in importance the most (76%). This is followed by core competencies (63%), the internal management (42%) and management and financial management (33%). This weighting is the same in all countries surveyed, whereby client / market orientation and core competencies have a much higher weighting in Belgium, Denmark, Germany and Switzerland than the internal management or financial management.

Importance of the key success factors for growth per country

Diverse potential for improvement

When asked which key success factors need to be improved upon with reference to client and market orientation for future growth, managers of companies in Europe agreed that acquiring new clients (71%) was the most important area, followed by client retention / loyalty (55%) and customer service (45%). In Belgium and Holland, identifying new expectations came in third. When the focus switches to key success factors with reference to the core competencies of the company as a source of future growth, innovation frequency (63%) emerges ahead of quality of service (54%) and intellectual / human capital (49%) in Europe as a whole. However, results vary considerably with regard to core competencies: organic growth is mentioned particularly frequently in Denmark and Germany, yet this aspect has hardly any bearing in Italy. On the other hand, Belgium, Holland and Italy place strong emphasis on intellectual / human capital, whilst this aspect is weighted under average in Denmark, France and Switzerland.

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Corporate executives are largely in agreement with regard to internal management: the focus is on improving the level of motivation of employees (60%), followed by skills / profiles management (48%) and improving middle management’s level of motivation (44%). When questioned about key topics in the area of finance and management in relation to future development, managers placed profitability (66%) some way ahead of the financial health of clients (45%) and cash flow (35%). When all key success factors are considered, the following ranking emerges according to corporate executives: acquiring new clients (71%) lies ahead of profitability (66%) and innovation frequency (63%).

Top 3 of the key success factors for growth

Clear priorities

Corporate executives in Europe cite strengthening human capital (79%) ahead of the development of service quality (73%) and improving ability to listen to the client (72%) as sources of sustainable growth. With the exception of Denmark and France, strengthening human capital is ranked in first place in all nations included in the survey. It is striking that managers in France generally give a higher weighting to all areas of potential. Improving ability to listen to the client alone lies at 90%, followed by service quality (88%) and strengthening human capital (84%).

Clients as central stakeholders

In future, clients will have an even more central importance among the company's various stakeholders. Asked about the future role compared to the present, business leaders in Europe rated clients at the top (64%), followed by executives (50%), upper management (41%) and nonmanagement employees (37%).

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Programmes of action

Lastly, Mercuri Urval polled the 844 business leaders regarding the priority of their programmes of action. In terms of client and market orientation, four factors stood out: acquiring new clients (86%), followed by business internationalization (81%), customer service (79%) and client retention/loyalty (77%). With the exception of business internationalization, these have to do with the key factors for future growth already mentioned. In Denmark, France, Italy and Switzerland, the quality of orders portfolio was mentioned quite frequently (80% to 100%).

Action priority for the client/market orientation per country

In terms of core competencies in the programmes of action throughout Europe, service quality and organic growth came out on top with the same mentions (80%), followed by the quality of offering (79%) and innovation frequency (74%). Moreover, in Belgium and Denmark, quality of recruitment (86% and 83%, respectively) was mentioned quite frequently. In France, it was investment frequency (80%); in Germany, external growth (67%); in Italy, the staff turnover rate (100%); in the Netherlands, investment frequency and external growth (79% and 78%, respectively); and in Switzerland, the quality of recruitment (75%). Internal advancement and schedule flexibility came out even on top (59%) throughout Europe when it came to internal management with respect to the programmes of action. They were followed by skills and profiles management (55% and 54%, respectively), middle management’s motivation and employees’ level of motivation.

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Action priority for the internal management per country

For personal information, please contact:

Austria Hannah Möltner Consultant Mercuri Urval Austria Phone +43 1 50 65 50 Mobile +43 664 858 67 44 Fax

+43 1 50 65 55

[email protected]

Belgium English: Anders Berge Managing Director 0474 70 99 91 [email protected]

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French: Yannik Broquet Senior Consultant [email protected]

Flemish: Ann Boffé Senior Business Consultant Mercuri Urval Tel: 02 715 09 99 Mobile: 0476 294579 [email protected]

Danmark Direktør Christian Steen Larsen Mercuri Urval A/S Tlf.: 2533 3809 [email protected]

France Nathalie Steinberg Directrice Général Mercuri Urval Developpement Mercuri Urval France

Phone +33 (0) 1 58 37 09 99 Direct +33 (0) 1 58 37 09 46 Mobile +33 (0) 6 32 87 09 46 Fax

+33 (0) 1 58 37 09 98

[email protected]

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Germany Andreas Scheuermann 0177 – 50 57 300 [email protected]

oder Dr. Cora Steigenberger 040 – 85 17 16 - 0

Italy Antonio Tubiolo COO Mercuri Urval Italy Phone +393483009225 [email protected]

Netherlands Wilma Buis Algemeen Directeur van Mercuri Urval b.v. Tel: 033 450 1400 of 06 5025 3038 [email protected]

Switzerland German/English: Christian Lerche CEO Mercuri Urval Schweiz Phone +41 44 396 11 42 Mobile +41 76 353 50 00 [email protected]

French/Italian: Dimitri Djordjèvic Director Mercuri Urval Nyon Phone +41 22 365 72 23 Mobile +41 76 353 50 49 [email protected] 7