GLOBAL CXO OUTLOOK

Growth Strategies for 2012 and Beyond

Rajan Kohli CMO -Wipro Global IT Business

Dear friends, friends, Dear Business leadership global order is a newnew paradigm. The The challenges of the past, such as limited techBusiness leadership in in the theemerging emerging global order iswhole a whole paradigm. challenges of past, such as limited nology access and limited access to global resources (capital, talent, natural resources), have given way to a world without technology access, and limited access to global resources (capital, talent, natural resources) have given way to a world boundaries. Instead, companies operating in different geographies and industries are now confronted with a fresh set of without boundaries. Instead, companies operating in di erent geographies and industries are now confronted challenges that mainly stem from the competitive global business regime, alongside the call for sustainable development. with a fresh set of challenges that mainly stem from the competitive global business regime alongside the call for sustainable development. Building Growth Strategies for 2012 and Beyond, the theme of our first Global CXO study, is an onerous task that may be accomplished with a careful analysis of the key imperatives of global growth and development that can help organizations Building Growth Strategies for 2012 andbased Beyond, theme our rst and Global CXO study, is an onerous globally to do business better. This study, on a which survey is of the more than of 300 CEOs other C-level executives at global task that may be accomplished a careful analysis of the key imperatives of global growth and development that can enterprises, underscores three with key imperatives: strategic innovation, adoption of green practices, and a meaningful preshelp globallysuch to do better. This study, based on insights from over 300 CEOs and other C-level ence organizations in emerging markets asbusiness India and China. executives at global enterprises, underscores three key imperatives, namely, strategic innovation, adoption of green The findings this survey, conducted by Forbes Insightssuch in association with Wipro, amplify the key factors that underpin practices, and of meaningful presence in emerging markets, as, India and China. the imperatives as well their inter-connectedness. This could serve as actionable input in CXO decision-making. Let me now share my of views the three key imperatives: The ndings this on study, conducted by Wipro, in association with Forbes Insights, amplify the key factors that underpin the imperatives as well their inter-connectedness. This could serve as actionable inputs in CXO decision Strategic innovation making. Let me now share my views on the three key imperatives: Managing top- and bottom-line performance remains the top business priority of CXOs around the globe. However, in working towards this objective, business leadership would be called upon to place a premium on strategic innovation, Strategic Innovation: which will act as the true differentiator in the competitive business arena. Innovate or perish is the dictum. Managing the top and bottom line performance remains the top business priority of CXOs around the globe. However, in towards this objective, business leadership be business called upon to place premium on strategic innovation In working earlier days, R&D was among the first casualties inwould times of distress. But a with innovation acquiring a strategic which will act as the true di erentiator inthe thefocus competitive businesswhen arena. Innovate or down. perish is the dictum. focus, companies have begun to sharpen on innovation the chips are More than two thirds of the surveyed leaders said that the 2008 meltdown made innovation even more of a business imperative. In the earlier days, R&D was among the rst casualties in times of business distress. But with innovation acquiring a What is important to note is thatbegun innovation is not just process an all-encompassing approach that is More cross-cutting, strategic focus, companies have to sharpen the a focus on but innovation when the chips are down. than touching upon every vital pillar of business covering products and processes, financial and risk management, talent develtwo-thirds of the surveyed leaders said that the 2008 meltdown made innovation even more of a business imperative. opment, and branding and promotion, among others. Hence, in building growth strategies, the business leadership would need to pursue a collaborative approach wherein all key stakeholders, including customers and strategic suppliers, particiWhat is important to note is that innovation is not just a process but an all-encompassing approach that is cross-cutting, pate in the dialogue. touching upon every vital pillar of business covering products and processes, nancial and risk management, talent development, and branding and promotion, among others. Hence, in building growth strategies, the business leadership While the innovation canvas is broad, the underlying processes would necessarily have to be robust, smart, and data-rich. It would need to pursue a collaborative approach all key stakeholders including customers and strategic suppliers In is equally important that the returns are tangiblewherein and aligned with the top- and bottom-line performance of the company. participate in the dialogue. these circumstances, cost becomes an important consideration, more so in developing markets that take time to warm up to innovative products, processes, and practices. Nearly 80% of the CXO respondents to the survey echoed the view that cusWhile the innovation canvas is broad, the underlying would necessarily have to be robust, smart and data-rich. tomer willingness to pay should be a critical yardstick processes to measure the viability of an innovative product or service. It is equally important that the returns are tangible and aligned with the top and bottom line performance of the Innovation has another important cost dimension that relates to timeliness. Getting a product or service swiftly out to take market company. In these circumstances, becomes an important consideration, more so in developing markets that is a critical business tactic and part of every enterprises strategy to outwit competition. Having a faster time-to-market time to warm up to innovative products, processes and practices. Nearly 80% of the CXO respondents to the survey is an imperative both incustomer mature and developing markets, so in the supercharged business domains of ofan ICT, retail, and echoed the view that willingness to pay shouldmore be a critical yardstick to measure the viability innovative automotive. product or service.
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Innovatio n has ano ther impo is a critic rtant dim al busine ension th ss tactic and (TTM) is at relates part of ev to timelin an impera ery enterp ess. Gettin tive both retail and rises stra g a produ in mature automoti tegy to o ct or serv and deve ve. utwit com ice swiftl loping m p e y out to m ti a rk ti o e n ts . Having , more so Adoptio arket a faster ti n of gree in the sup me-to-m n e rc As I men practices: h a rg a e rket d business tioned at domains adoptipractices Adoption of green of ICT, on of gre the outset, going en pra green isfew cticesis at As I mentionedth at the outset, going green imperative companies an im s pa wan ssing. G perative, can afford to overlook today. For many years, as v iewed as ing g few reen haas a co the adoption of green practices o was viewed an obligation that the generation owed to future generations. But n obligati current s a strong on that th mpanies can a ord b Over ti u si n e to overlo e thats passing. Going green has a strong business case, provided it is underpinned by the innovation imperative. c ss case, p me, ok today rovided it urrent generation led to sig several leading co . For o is wed to fu underpin mpanies ni cant b ture gene long, the n e d h u a b si v manuleading y e how ness th d e rations. B e m facturing gain in o Over time, several companies have demonstrated innovations resulting in the adoption of green practices led novation nstrated h s and hig ut , but als imperativ ow innov her pro nvironmgains o in e. ta a ti to significant e business and higher profitability. This is the case not only in traditional sectors like mining and manbility. Th the IT ental imp o n s re sulting in domain is is the c act that ra facilitated ththe wh ase no e adenvironmental pid ex ereinstance, ufacturing, but also in b the IT domain where several players, for taken cognizance y co option o t only in of several have pansion mp lementary f gree p o tr la f a d y d a e it ta rs io , sohas c nal facilitated e fo impact that rapid expansion of data centers brought in its wake. Green IT is thus becoming the norm, ftware te nters has r sectors li byn practices in st ance, ha chnologie brought in Importan ke minin ve taken tly, server s like serv g and its wake. software technologies virtualization and cloud computing. ree ou cognizan e r G developm liketh v re t ir e o tu n f ce of th a IT is thus four surv lization & ent. Ecoe ey respo b cloud co e ciency that shou ndents sa mputing. ecoming the norm is not just said ld lu id th Importantly, three out ofre four survey respondents they believed there is a strong business case for sustainable devel, e n e te a y b gre rp o b ut carbon rises tow elieved th en bandw ards adcredits. credit ere ais gonot opment. Eco-efficiency just about carbon It can earn revenue and help reduce costs, two key drivers that n be is option o s. a It cause st c ro a n earn re ng busin f green p their cust venue an ess cathe ractices.several omepractices. should lure Interestingly, companies have jumped onto green se fo rs asked fo Nenterprises d help onetheless towards adoption of green Interest r sustaina reduce co r in it , g . ble fo ly , r se a st v bandwagon because their customers asked for it. greater n s, e to come ra tw l o c o key drive mpanies umber of down a fe rs h a v c e o w m jumped o broad basi panies to nto the ng the gre notches.. Concert repose th e e e be sufor d ir n Nonetheless, a greater number of companies to repose their faith in green practices, the underlying costs will have in economy faith in g ccessful w . While th dustry action, w reen prac ithout thConcerted it tiwill h re to come in down notches. industry action, with due government go a long way toward ces, th uenca e e due gove support, su fo p u infew p eu rt ort of loc g policy h nderlying s rnment su o f re sp changes. al and nof o n conot d p broad-basing the green economy. While three fourths respondents said that green initiatives by business could be ents have sts w port, wil ational go ill have l go a lo sa id v e th rnm at private Prwithout ng w green in en esence in ts, theevidence successful the support of local and national governments, there is ample of green initiatives influa y to it re wa ia emergin is ample tives by b This bchanges. evidence g econom usiness ca rd encing policy rings me o n f ie n private g s: to the th strengthe reen initia ot ird key ning of th ti v es imperativ e green e Afric e- presen aa conomy, nd Braz economies Presence in emerging c e il. It is m gains vita in emerg talent ava arkets lik presence l im in g markets which is central to the strengthenportance markets. This brings me il to the third imperative: emerging Innovation, ab ility e these th in , andkey . Innova in the co that more it a is t h su tio n e te p re n, whic p xt of emlike o ing of the green th economy, gains vital importance in the context of emerging markets India, China, South and that most rt and pro an three h is Africa, e rgin their stra q g central to m u lo g markets a o b rt te al com ers support in tegies fo o n f o p re Brazil. It is markets like these that and promote innovations, owing to a lower cost base and rich talent availabilv like India the anies are ations, ow spondents r today a , China, pitching ing to a indicate nd ti mes to co are South foSo lower c r reit ity, and it is here that most global companies for revenue growth. as no surprise that more than tha vecomes t investm n me. pitching d o u st base an e growth ent and e . Soto d ri it their three quarters of respondents indicated that investment and expansion into emerging markets is vital xpan comestrategies sion into Str s as no su for ch ategic in e m rprise pto e u rg ts in fr today and times come. g markets om the p require to eer group is vital to constantl a s seen wit yd busy sche h this stu dule to sh rive their enterp y are ri Strategic inputs from the peer group as seen with study d are what CXOs with that unique 360-degree view a re experie to wthis in whprovide si ghtful resp ses at provid ork sm nce and a rt e CX w e o r. n is se d T they require to constantly drive their enterprises to work smarter. The CEOs and C-level responses om of ho Os witexecutives s to our q he CEOs h that un who took time off w best to and insig ueries as and C-le ue htf p v b a e u rt 360the their busy schedule to share insightful responses to our queries as part of this research, which attemptsiq to share ul co le ild grow of this re mments o viecollecw they th strateg search, w xecutives who too n th e build ie h k indust s ic tive experience and wisdom of how best to growth strategies for 2012 and beyond. We thank them for their candid ti for 2012 h attemp ry. ts to share me o their & beyon d. We th th responses and insightful comments on the industry. e collecti ank them ve Regards for their candid Regards,

Rajan Kohli Rajan Ko hli CMO - Wipro Global IT Business CM O - Wipro Global IT Business
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Table of Contents
Key findings 5

Introduction6 Seeking the key differentiator Going green for business growth Developing opportunities in the developing world 8 15 22

Methodology27

Key Findings
Forbes Insights, in association with Wipro, conducted an exclusive survey of more than 300 CEOs and other C-level executives at global enterprises ($500M-plus in annual revenue). The key findings of this survey include: S  trategic innovation is more important than ever to driving growth. This commitment to innovation will impact how companies approach environmentally friendly, or green, business practices, as well as how they manage their expansion into global emerging markets. For example, in some cases, companies are using so-called reverse-innovation, taking innovative products and services from their emerging market efforts (such as in China) and commercializing them elsewhere in the world. C  -level executives see innovation as a way to differentiate their businesses, particularly following the 2008-09 recession. Fully two thirds of the executives said they believe that innovation is more critical than ever because of the economic downturn of 2008-09. S  peed-to-market is necessary for successful innovation. More than 80% of survey respondents agreed that getting a product or service swiftly out to market is a critical business innovation tactic. C  ost remains the biggest hurdle to fostering innovation. It topped the list of innovation barriers cited by C-level executives, followed by issues related to the regulatory environment, and finding and retaining top talent. P  aying attention to best practices is the most effective way to foster innovation. Other innovation tactics promoted by executives included technology, data-based decision making, and customer collaboration. E  xecutives see a very clear business case for using green business practices. The most important factors they cited include reducing costs, improving operational efficiency, and meeting customer demand for more environmentally friendly products. E  mbracing green business practices as part of a corporate innovation strategy is essential to their success. Overall, nearly three quarters of C-level executives indicated their companies had incorporated environmental elements into their innovation strategies. G  reen IT is a priority for more than three quarters of companies. Their strategies in this area include reducing data center footprints, greater use of server virtualization, and greater use of cloud computing. E  xecutives see investment and expansion into emerging markets as crucial to their strategies today and in the near future. More than half believe China holds the greatest opportunity, followed by India, Southeast Asia, and Eastern Europe. E  xpansion into emerging markets is being driven by lower costs and a higher rate of growth, according to executives surveyed. Potential barriers to strategic success in these areas include poor distribution channels, unstable political environments, and a shortage of skilled talent.

introduction
Over the past decade, the art of doing business has changed. Companies are re-shaping strategies to innovate and compete globally. New methodologies, new opportunities, new markets, new technologies, and new practices are being brought into play with an eye on boosting profits and curbing costs.
Managing top- and bottom-line performance emerged as the top business priority for about a third of the 308 senior executives responding to a February 2011 survey conducted by Forbes Insights, in association with Wipro. (Fig. 1) The survey polled 122 CEOs and 186 other C-level executives worldwide. What kinds of tools do these top-level executives expect to use to shape their strategies for growth in 2012 and beyond? The survey focused on three key areas: Strategic innovation An overwhelming number of respondents agreed that innovationboth related to new products and services and to business practicesis critically important to driving growth. And more than two-thirds of the surveyed leaders say that the 2008-09 recession made innovation even more of a business imperative. Innovation is being driven by data-based business decisions and intelligence; collaboration with external customers and vendors; enhanced risk management solutions; selective outsourcing; vigilant compliance; and integrated global communications. As they go down this road, leaders are trying to keep an eye on costswhich they cited as the biggest hurdle to innovation. Sustainable development So-called green initiatives have the greatest chance for long-term success when they make business sense. Three out of four survey respondents indicated they believe there is a strong business case for sustainable development. Eco-efficiency can earn revenue and help to reduce costs, two legitimate reasons for companies to adopt such initiatives. Another reason: more than a third of respondents said their companies were taking up green practices because their customers were asking for it.
FIGURE 1: What are your companys current top business priorities? Managing top- and bottom-line performance
30

Expanding into new and emerging markets

28

Cutting costs
26

Building and maintaining our competitive position and brand

26

Developing new products and services

24

Driving innovation and research & development

22

Leveraging technology
21

Recruiting and retaining employees/talent

17

Driving environmentally conscious growth

15

Improving supply-chain effectiveness

14

Ensuring risk and regulatory compliance

14

Building value through M&A

12

0%

50%

100%

Emerging markets China and India are the most popular investment spots for survey respondents, with China the clear favoritethe countrys rising purchasing power presents opportunities for a diverse range of business. Venturing into developing markets is not a surprising business initiativethese economies offer faster, higher growth potential compared to more mature markets. However, emerging economies also may present challenges: poor distribution channels, skill shortages, volatile political climates, and strong local and international rivals, for

example. The trick for foreign entrants may be to formulate business plans that consider the socio-economic trends in those emerging markets, and correctly identify the opportunities and challenges there. All in all, the corporate mood appears buoyant heading into 2012. Chief executives and their direct reports are confident their companies are performing well in various aspects of business. They believe their strategies of innovation, sustainability and expansion are effective and this will continue in 2012 and beyond.

Strategic Innovation

Seeking the Key Differentiator

Any company not thinking about innovation is not going to have long-term sustainable success. So said Wong Wai Ming, senior vice-president and chief financial officer of Lenovo, one of the worlds largest computer companies. Without innovation, you can survive for a few years but then you die, noted Jean-David Calvet, chief procurement officer of Alacatel-Lucent, a global communications firm. Their thoughts reflect those of more than 90% of respondents to the survey who wholeheartedly agreed on the importance to business of innovation in products and services, and business practices. (Fig. 2)
FIGURE 2: Importance of innovation Product/service innovation Today
46 31 17 3 3

Two years from now

37 31 22 7 3

Business process innovation Today

41 32 19 6 2

Two years from now

It is critical to our customers success that we continue to push the boundaries of the unknown.
Sophie Vandebroek, Xerox

34

35

19

Extremely important Very important Important Somewhat important Not important

FIGURE 3: Did the economic downturn of 2008-09 change your companys approach to innovation?

Fully two thirds of the senior executives said they believe that innovation is more critical than ever because of the economic downturn of 2008-09. (Fig. 3) The silver lining is that the bad times may actually lead to good ideas. True, recession makes jittery companies cut research budgets, lay off staff, pare operations, and freeze hiring. But on the flip side, an economic slump forces companies to survive, so they cut costs, shed flabby operations, and find innovative ways to make money. Consider the situation at Xerox, which announced that it added 1,031 U.S. patents to its intellectual property portfolio in 2010, an increase of 46% from 2009, ranking it among the top 20 companies for U.S. patents in 2010. It is critical to our customers success that we continue to push the boundaries of the unknown, noted Sophie Vandebroek, Xeroxs chief technology officer and president of the Xerox Innovation Group. We are passionate about innovating. It is at the very core of what Xerox does. More than 2,400 employees, past and present, have been granted five or more patents, an extraordinary accomplishment.

Innovation is now 
13%

more important than it was prior to the recession important than it was prior to the recession

Innovation is less 
19% 68%

It did not change  our approach to innovation

Alcatel-Lucent Innovation, innovation, innovation

Imagine no ugly cell phone tower antennae. Instead, theyre replaced by a miniature base station that can be attached at the bottom of the tower, or on an electricity pole,or on the side of a building. Plus, this equipment can slash a telephone companys operating expenses and electricity consumption. LightRadio is an innovation from global communications company Alcatel-Lucent that seems to make this imagining a reality. Jean-David Calvet, Alcatel-Lucents chief procurement officer, calls the device a typical example of how different components of the company work together to develop innovative products in partnership with key suppliers. An internal team was set up consisting of personnel from Bell Labs, a core unit responsible for pure research, and the products division responsible for defining new products, to create a disruptive approach to the market, according to Calvet. The development was done in partnerships with Freescale and HP. Another important element in Alcatel-Lucents innovation is its partnership with its customers, the telecommunications operators. If a product is provided as part of a solution, it should be what the customer demands, noted Calvet; through partnerships with customers, Alcatel-Lucent provides end-to-end solutions, from concept to product. Equally fruitful are partnerships with suppliers, as seen in the development of lightRadio. Of course, some suppliers are simply that and little more, but others are so-called preferred or strategic suppliers and are treated differently. With these suppliers, Alcatel-Lucent has an in-depth, common, win-win relationship, working together, especially on innovation, said Calvet. The criteria for selection for the strategic suppliers are different from those for normal suppliers, noted Calvet, adding that the relationship with preferred suppliers is less transactional, more strategic.

The range of patents reflects Xeroxs focus on making business processes easier and more efficient, said Vandebroek. For example, the 2010 patents included solutions that improve inventory management, e-mail overload and personalized packaging. Other patents help in document management and in making sense out of large volumes of information. Patents on printing systems using less power are a way for Xerox also to minimize the environmental impact of its products and services. Focusing on effective innovation The key is effective innovation. Corporate resources should be allotted neither to too many channels (because that can lead to a lack of focus) nor too few (because that would stifle creativity). To drive business innovation, robust data should underpin all decisions and competitive intelligence, according to three in four of survey respondents worldwide. Collaboration within the company, as well as with customers and supply chain partners, is another effective tactic to spur innovation, three in four of the senior executives believe. One way to go beyond pure technical innovation is to work together, between research and R&D and key suppliers, to define new approaches to be the first to market with innovative products. This is one of the main elements of our strategy, said Alcatel-Lucents Calvet. He noted that its recent lightRadio cell architecture is the outcome of such a collaboration. (See sidebar, page 8) There are other examples of internal innovation. Toyota practices kaizen or continuous improvement, in which teams get together not only to problem-solve the weak points, but also to look at what are considered the strong points, said Norm Bafunno, president of Toyota Motor Manufacturing Indiana (TMMI) in the U.S. Also applied at Toyota is obeya (which means big room in Japanese), a key project-management tool used primarily in product development to shorten the PlanDo-Check-Act or PDCA cycle, which in turn leads to a speedier-to-market approach. Obeya is all about effective and timely communication between upper and lower management, and across functions, who meet daily in ongoing

FIGURE 4: Innovation requires getting new products and/or services to the market swiftly
42 39 11 5 3

Strongly Agree Agree Disagree Strongly Disagree Dont know

sessions. An obeya group at Toyota would typically include engineers, assembly workers, marketers, designers and suppliers; an obeya room would have whiteboards with graphics to depict schedules, progress, warnings, and scenarios for a products development. When theres a big problem, we know [we] have to change, but when there isnt a problem, we still want to innovate. Thats where I think this culture, this kaizen, this sharing of ideas...this obeya links, where you try to generate ideas for something that may already be performing pretty well, noted Bafunno. (See sidebar, page 12)

When theres a big problem, we know [we] have to change, but when there isnt a problem, we still want to innovate.
Norm Bafunno, Toyota

Getting customer input Listening to customers is imperative for business innovation; there is no point in having a great idea if nobody wants to buy it. We have to come up with products that meet the need of customers and the ways to service that need, noted Lenovos Wong Wai Ming. Apple may have opened up the market for tablet computers with its iPad, but as consumer demand has risen, others, like Lenovo, are entering the market. Lenovo unveiled its LePad in endMarch, rolling it out first in China, its home-turf. Xeroxs newly launched Innovation Hub in India aims to understand customer needs by leveraging the experience of local partners (See sidebar, page 11). But the speed-to-market approach isnt restricted to computers or electronics companies. Fashion houses live or

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die by their ability to set runway trends. Carmakers worldwide increase sales by regularly launching new models which promise better mileage, better looks, and better eco-friendliness. Retail banks hasten to be the first to offer consumers new financial solutions or savings schemes. Getting a product or service swiftly out to market is a critical business tactic, agreed 81% of surveyed executives. (Fig. 4) Companies take a breather in emerging countries, however. Product and service innovation is less important in developing markets than mature markets, according to 67% of senior executives surveyed. The reasons are diverse. In a less developed market, companies may have fewer rivals, or consumers may have fewer choices of product or service available to them, or have lower user maturity. Or purchasing power? To be sure, customer willingness to pay should be a critical yardstick to measure the viability of an innovative product or service, said 79% of respondents. Spending millions of dollars on development is only worthwhile if the product or service sells. Price is less of a concern than the willingness of a consumer to pay. The litmus test of a great idea: will it sell? CFOs are leery of pouring money into ideas that either wont get off the ground or will end up gathering dust. They tend to become particularly anxious about funds for innovation when companies have to tighten their belts. Not surprising, then, that 39% of respondents point to cost as the biggest hurdle to fostering innovation. (Fig. 5) It is seen as a bigger challenge than talent recruitment and restrictive regulatory environments.

FIGURE 5: What are the biggest barriers your company currently faces regarding fostering innovation? Cost
39

Talent recruiting/retention
25

Regulatory environment
25

Technology infrastructure
23

Lack of metrics to measure impact of innovation

22

Innovation is not a strategic priority

21

Lack of understanding about innovation

19

Corporate comfort with risk

19

Lack of an organizational framework for innovation

18

Leadership lacks vision

17

0%

50%

100%

11

Xerox Innovative research

The Xerox India Innovation Hub, which opened in March 2010, has a few unique characteristics. For a start, it is Xeroxs first research center in an emerging market, and has an initial objective to develop document management solutions for India and other markets. At the hub, Xerox is not taking the conventional captive route of relying on in-house research skills and facilities, a strategy that some multinational companies have pursued in their research centers in emerging markets. Instead, the Xerox hub has adopted Open Innovation, working in some ways as an incubator for ideas from entrepreneurs and entities outside the company, especially its local partners. Our Open Innovation model is core to how we innovate at Xerox. The best way for us to understand customer needs is to partner with local people and leverage their experience, said Falynne Smith, public relations manager for developing markets operations at Xerox Corporation. The reason we call it an Innovation Hub is because its a central point that brings together research from all of our centers with the best and brightest minds in India. Were building a strong global innovation network by partnering and collaborating, rather than competing. Located in Chennai in southern India, the hub represents innovation without borders in its truest form, said Smith. Weve leveraged our existing competencies to help solve emerging-markets business problems in India, but also to use the talent there to address global concerns. This team is engaged in innovation-focused projects spanning a wide range of exciting areas, including business process optimization, information and secure content management, cloud computing and collective intelligence-based systems. In many of these fields, Xerox is using the hub to expand partnerships with leading Indian technical and business schools. Some examples:  A partnership with the well-known Indian Institute of Technology Madras (IIT Madras) to use on-demand cloud computing to improve the efficiency and economics of document-services delivery  Another partnership with IIT Madrass Rural Technology Business Incubator to develop innovative solutions to improve workflow at small technology-based businesses in rural India  A collaboration with the Indian Institute of Science on a project on machine-learning and game-theory principles to improve the performance of online service marketplaces  A project with the Indian Institute of Technology Bombay to develop linguistic databases to provide automated translation of documents A project with the Indian Institute of Technology Kharagpur on the dynamics of mobile phone users. The Xerox hub also can leverage the experience of a channel partner network of 500 partners, value-added resellers and sub-distributors spread across 28 locations in India. These partners are expected to deliver appropriate solutions to customers and, through their interaction with the latter, are well placed to provide feedback to Xerox on customer requirements and problems. According to Smith, in the year since the India Innovation Hub opened, it has been flourishing with activity that is benefiting Xerox clients all over the world.

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Leadership, meanwhile, must be the driver of corporate innovation. Four out of five respondents said business innovation should be a clear priority for a companys leadership. Fully 77% of senior executives worldwide agree also that the top bosses should be willing to take risks to facilitate business innovation. Toyotas Bafunno agreed that risk-taking is important for a companys leadership, but that it should be seen in context of a companys culture. If a leadership team is not in line with the right kind of environment to take risks, no risks will be taken, he said. Tools for innovation Driving business innovation requires effective tools. Survey respondents had clear likes and dislikes (Fig. 6): A  ttention to best practices is the premier technique for fully 80% of surveyed respondents. Learning from the success and failures of others may be a no-brainer, but the lessons must be prudently fitted to suit each companys peculiar circumstances and culture. T  he next most-effective tool for business innovation is technology, rated effective by 79% of respondents. C  losely related to technology, data-based decision-making ranks third, tied with collaboration with customers.

FIGURE 6: How effective do you believe the following tools and tactics are for driving business innovation? Technology that fosters greater internal collaboration
39 40 9 8 4 1 42 11 8

Attention to industry best practices

38

Collaboration with customers

37 39 11 8 5

Collaboration with supply chain partners/vendors

37 35 13 10 5

Data-based decision making

36 40 12 8 4

Integrated global communications

36 37 13 10 4

Data-based competitive intelligence

36 37 14 8 5

Enhanced risk management solutions

35 38 13 9 5

New organizational structures

31 43 15 7 4

Selective outsourcing
28 40 16 12 4

0%

50%

100%

Very effective Effective Ineffective Very ineffective Dont know/NA

13

Toyota Continuous improvement

Innovation isnt about eureka moments. More often, it is about continuously tweaking an existing idea, and making small changes that lead to a better, more competitive product or service. At Toyota, this is embodied in the practice of kaizen or continuous improvement, and linked to the Japanese automakers use of obeya or big room, a management tool that encourages cross-function communication to spur the product development process. Engineers, assembly workers, marketers, designers, suppliers and others engage in ongoing sessions to mark progress, resolve problems and insert changes, with the aim of improving the final product. What are the criteria for good ideas generated by the application of kaizen and obeya? Toyota Motor Manufacturing Indiana (TMMI) tries not to limit the generation of ideas for improvement, but categorizes and prioritizes them based on their potential impact. We try to hit on those major categories, and within those we try to figure whats going to give us the best result and what we can implement, said Norm Bafunno, TMMIs president. And thats a win-win for everybody. He cited an example of innovation for posture change. During assembly of a vehicle, even though the doors are off to maximize access, the center line of a vehicle is challenging to reach. So we look at other ways to place parts within that area; maybe its with a special assist arm, or how we fasten it to the floor, and things like that. Those are the kind of ideas that would occur with obeya, said Bafunno. Another example: innovation in relocating equipment. An employee asked, I have to take four steps to pick up that partwhy cant I just take two? So TMMI looked at the equipment and moved it. It may sound simple, but I tell you it isnt the result of engineers coming in and saying move that equipment closer. The team members came up with the idea and said this is going to be more efficient, said Bafunno. He sees such kinds of improvement as the core link to Toyotas overall vision, creating innovation at the plants aligned with it.

There are a lot of ways in which you can save and improve and innovate that dont cost a lot of money.
Norm Bafunno, Toyota

The TMMI president believes cost is always important in decisions on new ideas, but it isnt the biggest challenge in the automotive industry; instead, the No 1 hurdle is to design very flexible equipment that builds the cars and trucks. So innovation can occur through what I consider to be continuous improvement of the equipment that we have or the application of that equipment in a different model, he said. There are a lot of ways in which you can save and improve and innovate that dont cost a lot of money. In our industry, the point of view in assembly operation is that we dont look at that as being a major stop to innovation at all. Continuous improvement is built into the annual planning process. Each year, TMMI assigns tasks to its executives and asks for some innovative breakthrough activities. These ideas are measured and monitored throughout the year. Some turn out to be good, some do not. But their existence indicates the espousal of innovation and risk-taking at a senior level at Toyota.

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Sustainable development

Going green for business growth

A trawl through corporate websites will show that almost every large business has a sustainability initiative (some more energetic than the others), often in keeping with its social responsibility aims. Green practices are the way forward, and make a great marketing tool as they highlight the engaged side of a company. But sustainable practices are not only the right thing for companies to do, but also are critical from a business growth perspective. It is against this background that many organizations have implemented strategies to improve their environmental standing. According to the survey results, reducing costs is the most important reason for adopting green business practices given by 41% of respondents, particularly by the chief executives among them. (Fig. 7) About one in three respondents worldwide turn to eco-friendly action to improve operational efficiency, meet customer demand, and comply with regulations. Focusing on return, not cost Improbably, some companies are inhibited from participating in carbon-emission reduction because of the perceived costs involved. Can they become believers? They can, if they understand that by cutting their carbon output they are taking the waste out of their systems and are driving efficienciesefficiencies that can then be converted into cost savings better used for growth and expansion, said Justin Barrow, co-founder and chief innovation officer of China-based Climate Action, which provides carbon offsetting services to help businesses to meet their green or corporate social responsibility objectives. Mark Watson, head of environmental affairs at Cathay Pacific, one of Asias leading airlines and a Climate Action client, said there is always a cost imperative in the airline industry, which works on thin margins, and where profitability is an ongoing challenge. But while moves such as fleet modernization and innovative technologies carry significant upfront costs, these are offset in the longer term by fuel savings and efficiencies. It is a bit of a red herring to say that being greener is going to cost more money, said Watson. We have seen that companies that
FIGURE 7: Which of the following factors are most important to your companys use of green business practices? Meet internal objectives for sustainability or climate change
41

Reduce consumption of fossil fuels

37

Be a good corporate citizen

35

Comply with current or future regulation

33

Be a good corporate citizen

31

Meet customer demand for greener products

27

Reduce costs
25

0%

50%

100%

invest in small but significant environmental projects are generating cost-savings and are also getting the reputational benefits [that go] beyond the bottom-line savings.

We have seen that companies that invest in small but significant environmental projects are generating cost-savings and are also getting the reputational benefits.
Mark Watson, Cathay Pacific

To mitigate its carbon emissions, the Hong Kong-based airline has explored initiatives that include fleet modernization, innovative engine technologies, and biofuels. (See sidebar, page 18)

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CLP Holdings With power comes responsibility

Worldwide demand for electricity is expected to grow by 2.2% annually through 2035, with more than 80% of that increase coming from non-OECD countries, according to the World Energy Outlook 2010. The emerging markets of China and India lead the demand, as they ramp up their economic growth. In both countries coal-fired generation is the cheapest and most-prolific form of electricity. It is also the most polluting. This focus on coal created a dilemma for CLP Holdings when it debated its climate-change strategy, said Andrew Brandler, the companys CEO. A leading power company in Asia, Hong Kong-based CLP invests and operates in China and India, as well as Southeast Asia, Taiwan, and Australia. Rejecting coal entirely and becoming a niche player in renewable energy would have been an easy solution, said Brandler, but these emerging markets will continue to use coal for many decades.

CLP decided instead to balance its generation portfolio, and move towards Andrew Brandler, de-carbonization by offsetting the emissions from coal-fired generation in CLP Holdings part with non-fossil-fuel generation and renewable energy. We are balancing the economic, social, and financial goals that sustainability is all about, said Brandler. If we ignore the benefits of power, thats not helping these societies. Someone else will build those coal-fired stations; if we can set an example and build them cheaper and more effectively, with cleaner technologies, then that is contributing to the social development of these countries. The company also changed its business approach to be compatible with global objectives for stabilizing greenhouse gas emissions to limit climate change. In 2007, CLP developed Climate Vision 2050, which sets a group-wide target of reducing carbon-emission intensity by 75%, by 2050. It continues to review its targets regularly, and has set even stricter milestones for cutting carbon intensity, increasing renewable energy capacity, and using non-carbon-emitting generating capacity. Balancing the companys generation portfolio is an imperative. As Brandler put it, We see carbon as a threat to any business. In 2050 if you are a carbon-intensive business, you are in big trouble; chances are you wont be in business by then. Thats the important part of our 2050 vision. We want to be in business in 2050, but that doesnt mean you take action in 2049; you have to move down this path and be ahead of the curve as the world moves down that path.

We are balancing the economic, social, and financial goals that sustainability is all about.

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Heavily fuel-reliant industries such as logistics, automotive, shipping or aviation have a greater stake in carbon-offset and energy-efficiency action. UPS began a carbon-offset program in 2009 in response to customer demands for environmentally responsible shipping options. (See sidebar, page 20) Under the program, customers of the U.S based logistics firm can choose to pay a small fee to calculate the carbon emissions from their shipments. UPS collects the fee, chips in a matching amount, and uses the money to fund environmental projects worldwide. Elizabeth Rasberry, a spokesperson for UPS, said that the initiative is recognition that UPS is a critical part of our customers supply chain and we have an obligation to help them operate in a more environmentally sustainable way. Green=innovation Becoming part of a corporate innovation strategy gives a boost to environmentally responsible action. Overall, 71% of respondents said their companies had embraced green strategies as part of their innovation strategies. (Fig. 8) The results were most dramatic in the Asia Pacific region, where 100% of the companies linked green practices to innovation. There greater enthusiasm in Asia could have several reasons. Companies in the region are catching up with counterparts in the West who have been practicing sustainable business longer. As environmental regulations become stricter worldwide, vendors in Asia servicing Western companies have had to ramp up their green practices not only to meet their customers requirements but also to comply with enhanced rules at home. Governments in Asia are introducing tighter controls on environmental degradation, with taxes and penalties imposed on polluters. Reducing ITs carbon footprint IT remains one of the biggest consumers of energy within the enterprise. Global data center capacity has been rising considerably, and with it the amount of electricity these facilities consume, as well as the amount of greenhouse gases they emit. Respondents expressed concern over the impact IT has on their energy consumption. More than three quarters

FIGURE 8: As part of your innovation strategy, has your company embraced green practices? Total respondents
71 15 13 1 69 17 13 1

Americas EMEA
60 21 17

APAC
100

Yes Not now, but will be adopting in the future No Dont know

FIGURE 9: Is green IT a priority for your company?

4% 19%

77%

Yes No Dont know

17

of the C-level executives indicated using IT solutions that consume less energy and are more environmentally friendly is a priority for their companies. (Fig. 9) Specifically, executives pointed to data centers as a key energy consumer, and reducing data center footprints was the most common element of their green IT strategies. (Fig. 10) That was followed by two critical and complementary software technologies that are also linked to reducing data center size: greater use of server virtualization and greater use of cloud computing. Creating an eco-friendly framework As with innovation, companies need an organizational framework to spur green business practices. In fact, more than 80% of executives in the survey agreed that is the case. (Fig. 11) Asked about what it takes to drive companies to focus on the environment, Climate Actions Barrow indicated that it all boils down to strong executive leadership, which needs to demonstrate that it is prepared to make decisions that stand by what the company wants to represent now and the future. Andrew Brandler, CEO of CLP Holdings, a power generation company, agreed. Certainly the leadership team [has it] imbued in all their strategies that we need to decarbonize. After laying out sustainable-development targets in its Climate Vision 2050 strategy paper, CLP carried out an exercise to educate its 6,000 employees about the targets. Cathays Watson added that a companys middle management also plays a part in sustainable development, and in fact its everybodys duty to do their bit. In need of government support Can business do it alone? Three-fourths of respondents believe green initiatives by business cannot be successful without the support of local and national governments. (Fig. 12) They reflect the opinion of international associations such as the World Business Council for Sustainable Development, a CEO-led, global association of about 200 companies. The council believes that tackling climate challenges requires greater collaboration across business sectors and between business, government, academia and civil society.

FIGURE 10: Which of the following elements are part of your companys green IT strategy? Reducing data center footprint
46

Greater use of server virtualization

42

Greater use of cloud computing

41

Shifting data center location

32

Replacing older servers, computers, and peripherals

30

Assessing energy consumption of all equipment purchases

30

Greater use of outsourcing

30

Monitoring use of IT energy consumption

20

Using smart grid or other energy management technologies

20

Implementing ways to reduce, store, and dispose of e-waste

17

0%

50%

100%

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Cathay Pacific Flying in greener skies

The aviation sector today accounts for 2% of the worlds carbon dioxide emissions; by 2050 this is forecast to grow to 3%. So how can the aviation industry fly greener? To mitigate the emission of greenhouse gases, the International Air Transport Association (IATA) has set certain goals, including improving fuel-efficiency by 1.5% annually from through 2020, and halving CO2 emissions (from 2005 levels) by 2050. Hong Kong-based Cathay Pacific, one of the worlds largest airlines, subscribes to the IATA targets. Its going to be challenging, said Mark Watson, head of environmental affairs at Cathay Pacific, but with new engine technologies, development of sustainable biofuels and improvements in air traffic management, for example, those targets are achievable. Along with the innovative engine technologies and biofuels that Watson mentioned, Cathay has also modernized its fleet in a bid to lower its carbon emission. Over the past two years, 10 new Boeing 777-300s have replaced less fuelefficient passenger aircraft mainly on Cathays trans-Pacific routes. Cathay also has been supporting development of sustainable biofuels as a member of the Sustainable Aviation Fuel Users Group, an industry working group led by Boeing to examine the commercial development of sustainable aviation fuel. Watson believes biofuels will be important in the industry, not least because prices of conventional fuel are heading upwards. Cathay scrutinizes real-time wind data to plan flight routes and speeds. It also works closely with governments, particularly those in Asia-Pacific, to improve the efficiency of global air-traffic management. Delays mean more holding time, which means more fuel burn, which means more cost to airline and more emissions. But governments, not airlines, control air-traffic management. What we can do is operate our aircraft in the most effective way we can, not just in terms of fuel conservation management, but also at the maximum environmental optimum, said Watson. Finally, Cathay gets its customers involved. The airlines FLY greener program offers passengers the option of offsetting the carbon emissions from their flights with either frequent-flyer miles or cash. Similar offsets apply to staff travel within Cathay and its parent company, Swire Group. The offset amount is ploughed into selected environmental projects, including three in China. Watson is very pleased with the offset program, and said the airline is working to increase interest and uptake, particularly among corporate clients, which are a key market and an important part of the airlines premium proposition.

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Certainly, government support (and money) can contribute to a cleaner environment. CLPs Brandler said encouraging national policies assisted the companys accelerated foray into renewable energy in India, China, Thailand, and Australia. China, for example, has set significant targets for low-carbon energy, energy efficiency, and clean technology in its 12th Five-Year Plan covering 2011-15. For its part, India has boosted allocations for clean environment schemes in the 2011-12 budget.

FIGURE 11: Companies need an organizational framework to spur green business practices
42 41 10 4 3

Strongly agree Agree Disagree Strongly disagree Dont know

What companies have finally woken up to is that sustainable development is not a fad. Its here to stay.
Mark Watson, Cathay Pacific

FIGURE 12: Green initiatives by business cannot be successful without the support of national and local governments
29 42 20 6 3

Strongly agree Agree Disagree Strongly disagree Dont know

But government involvement can also be painful for companies. The carbon tax versus cap-and-trade debate has passionate detractors and supporters on both sides. In the survey, three out of four respondents were convinced carbon taxes would soon become widespread globally. (Fig. 13) Ultimately, it all comes down to companies believing there is a strong business case for sustainable development. Cathays Watson concurred. What companies have finally woken up to is that sustainable development is not a fad. Its here to stay. If done effectively, it can help to deal with strategy, and be an effective tool to help to create value for the company. At the end of the day, that is what businesses dothey are there to create shareholder value, he said. CLP Holdings Brandler refers to sustainability activity as long-term risk management. Doing nothing is a clear threat, being ahead of the curve is a clear opportunity and the challenge is getting that balance right as you move forward...Businesses that are going to be around at the end of century will have to look at it that way, he said. As chief executive, I want the business to be thriving. [Sustainable development] is part of our core strategy otherwise we know we are not going to be in business in the future.

FIGURE 13: Carbon taxes will soon become widespread globally.

26 48 14 4 8

Strongly agree Agree Disagree Strongly disagree Dont know

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UPS Greening a customers supply chain

For logistics companies, which move millions of packages each year by land, sea and air, the conundrum is how to cut fuel consumption and carbon emissions, cater to environmentally responsible customers, and offset unavoidable carbon output. UPS has found a few schemes. Since late 2009, UPS has been offering a carbon offset option to customers in which they can choose to pay a small fee to calculate the carbon dioxide emissions from their shipments. The fee is collected by UPS, which matches the amount and uses the money to fund environmental projects such as a 39.9-mw wind-power plant in Nicaragua, a wastewater biogas-to-energy system in Thailand, a landfill gas scheme in China that captures methane released at the site to generate clean electricity, and two commercial reforestation schemes in Tanzania. UPS contributes a total of up to US$1 million annually. For its own operations, UPS reduces fossil-fuel consumption by using alternative fuels and increasing operational efficiency. The company has a fleet of more than 1,900 vehicles that run on alternative fuels. UPS said that so far it has explored eight different alternative-fuel technologies, such as liquefied natural gas, compressed natural gas (CNG), hybrid-electricity and electricity. The bulk of the greener fleet is deployed in the U.S., but CNG vehicles ply for UPS in Germany, France, Chile and Brazil, and propane-powered vehicles make deliveries in Canada and Mexico. UPS also has reduced its carbon emissions by improving the fuel efficiency of its domestic delivery fleetby 10% in the past decade, and by aiming for another 10% improvement over the next decade. This has been achieved by minimizing both the number of miles driven and the number of minutes vehicles idle during delivery and pickup. Every gallon of fuel is maximized, using proprietary software, methodologies and training programs. Telematics captures hundreds of data elements from UPS vehicles to improve efficiency and customer service, slash energy consumption and emissions, and make drivers safer. Telematics also helps to reduce the amount of time spent idling by 15 minutes per driver per day. That equates to 25 gallons of fuel per driver per year. There are definite cost savings there, noted Elizabeth Rasberry, a spokesperson for UPS.

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Emerging Markets

Developing opportunities in the developing world

Emerging marketsfrom the explosive markets of China and India to developing areas such as Southeast Asia and Eastern Europeare critical to the growth of global enterprises. More than three quarters of respondents indicated that investment and expansion into emerging markets is extremely or very important to their strategies today, and a similar number believe it will continue to be crucial two years from now. (Fig. 14) For companies to grow fast organically, it is necessary to grow fast in emerging markets where the rate of growth is quicker, noted Wong Wai Ming, senior vice-president and CFO of Lenovo, the Chinese computer maker. While Lenovo is based in China, it is a global brand, having purchased the personal computer business of IBM in 2005. Unsurprisingly, Chinathe second largest economy in the worldtops the list of markets that executives believe have the greatest opportunity for growth in the next 24 months. (Fig. 15) In fact, more than half of respondents (55%) cited China, followed by India (29%), Southeast Asia (21%), and Eastern Europe (21%).
FIGURE 15: In which emerging markets does your company see greatest opportunities for growth in the next two years? China
55

India
29

Southeast Asia
21

Eastern Europe
20

Russia
15

Brazil
11

Middle East
10

South Africa
10

Turkey FIGURE 14: Importance of investment/expansion into emerging markets Today

42 33 18 3 4 8

Mexico
7

North Africa
7

Two years from now

39 30 17 9 5

Indonesia
6

Extremely important Very important Important Somewhat important Not important

0%

50%

100%

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For many businesses, China presents multiple opportunities for growth. On the one hand, many companies have been manufacturing in China due to lower costs and high capacity. On the other, the emergence of the Chinese consumer over the past few years has made it a more viable market for selling goods and services. For example, Gap, the U.S. retailers, last year launched four flagship stores in Shanghai and Beijing, along with an e-commerce site. According to a Gap spokesperson, China is the cornerstone of our global growth strategy and we entered with a view towards setting the foundation for building a longterm brand. Emerging markets are on the agenda for companies looking for growth opportunities. Rapid economic progress in the past decade and growth potential in Brazil, Russia, India and Mexico have established them as strategic market priorities for Xerox, noted Falynne Smith, public relations manager for Developing Markets Operations at Xerox. Emerging markets are resilient and clients in those areas seek more value-added services and technology to strengthen their competitive advantage. This represents a prime opportunity for our services business helping improve productivity, enhance efficiency, and reduce costs so they can focus on their core business.

FIGURE 16: What are the key drivers for your company to target emerging markets? Lower costs
35

They are growing faster than developed markets

20

Growing consumer base

19

Fewer domestic rivals

16

Good recognition of our brand

16

Pool of skilled local talent

15

They have industries that complement our own

15

Fewer international rivals

15

Investor-friendly policies of governments

14

Shrinking consumer base in our home economy

12

Similar social and business culture to home market

12

Strong IT infrastructure
12

Stable political environment

11

Transparent financial markets

10

Strong law and order system

10

Strong civil and business legal system

9

0%

50%

100%

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Lenovo Protect and attack

The world is awash with new tablets from the major computer-makers: Apple, Dell, Samsung, Motorola, HewlettPackard, and Toshiba. Lenovo, too, has launched its LePad and IdeaPad (a hybrid notebook-tablet), but only within China, its strongest market. Lenovo will watch how these products perform at home before releasing them elsewhere, a tactic also employed last year for LePhone, its first smartphone, which is selling robustly in China. Staggered launches are part of Lenovos protect and attack strategy in which it protects the core business in China and mature commercial markets, and attacks in fast-growing emerging markets such as India, Russia and Brazil. We plan our business on a global basis but when we launch, we identify a market that will give us the best chance of success. Once we have that, we roll out continuously, said Wong Wai Ming, Lenovos senior vice-president and CFO. The initial focus is always on China, a market that accounts for about 46% of its worldwide sales, and where it has strong brand recognition.

We plan our business on a global basis but when we launch, we identify a market that will give us the best chance of success.

Wong Wai Ming, Going forward, Lenovo is investing in its brand. The Chinese company Lenovo came on the global stage in 2005 by buying IBMs PC business. From the consumers perspective, acknowledged Wong, Lenovo is still not as well known as other international brands. Despite the IBM unit acquisition, Lenovo is still a Chinese brand, with all the less-than-positive perceptions that has for Western consumers. Even within its stronghold of China, international rivals can turn consumers heads (and renminbi) towards their own strong brands.

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Drivers and barriers Interestingly, investor-friendly government policies and political stabilitytraditionally considered attractive incentives for investorsare not rated highly by respondents when it comes to emerging markets. Respondents indicated their companies emerging market strategies were focused mostly on costs and the overall pace of growth. (Fig. 16) But respondents also noted significant barriers to strategic success in emerging markets. While no single concern rose above others, many appeared worried about a foundation that could support the growth they desire. (Fig. 17) For instance, about one in five respondents (21%) said poor distribution channels were a hindrance. A similar percentage (18%) were concerned about a shortage of skilled talent. Xeroxs Smith agreed that in terms of innovation, talent in India is an issue. We have more demand than supply. But, she added, at the same time there are a lot of great minds thinking about this and how to solve this problem and build a larger pool of talent.

FIGURE 17: What are the key barriers in your target emerging markets? Poor distribution channels
21

Unstable political environment

19

Lack of understanding of social/business culture

18

Shortage of skilled talent

18

Strong presence of international rivals

17

Inadequate domestic partners and/or suppliers

16

Feeble law and order system

16

Corruption
15

Opaque financial markets

15

Inadequate infrastructure
15

Lack of need for our products/services

14

Constraining regulatory policies

14

Feeble legal system

13

Strong presence of domestic rivals

12

Little recognition of our brand

12

0%

50%

100%

25

Gap Global, but with eyes for China

Gap is hoping to tempt Chinas consumers to spend on its jeans and casual wear. The U.S. apparel retailer last year opened four flagship stores in Shanghai and Beijing, two prosperous Chinese cities, along with an e-commerce site. The investment in China came after lengthy market research and marks the beginning of a long-term, multi-channel strategy that will eventually result in more stores throughout the country, said a Gap spokesperson. Given the compulsion to save in China, and its lower purchasing power, does Gap anticipate sufficient sales to justify the costs of a China venture? The Gap spokesperson said the company doesnt disclose forward-looking projections for sales or earnings, but has great confidence that Gap will be well-received by Chinese customers and that our target demographic will embrace the brand. She added that Gaps approach to pricing was to offer a range from value to premium of stylish, quality products at accessible prices, all tailored to the Chinese fit. There is less traction for Gap in India, a market that the company continues to evaluate, along with other emerging markets. Entry into new markets worldwide is part of Gaps global growth strategy, which includes franchise, online and company-owned expansions. Gaps strategy for global growth is to leverage core brands across multiple platforms, channels and geographies. With regard to new countries, we take a different approach depending on the market. For instance, first we identify large markets, like China and Italy, with significant long-term upside for our brands and decide to make the investment to own and operate our own stores, whether its full-priced brands or our outlet models, said the Gap spokesperson. In smaller countries with projected growth and a limited risk profile like Australia and the Middle East, Gap leverages its successful business model. In major regions where it has its own stores, the company builds dedicated e-commerce sites, such as in Canada, Europe and China, so customers can get localized shipping and rates. In other markets, where Gap wants to test its brand acceptance and build market share, it ships directly from the U.S. Gaps goal is to improve top-line revenue, and to increase the percentage of its online and international revenue to 30% of total revenue by 2014, up from 22% of total revenue in 2010.

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METHODOLOGY
The information in this report is based on the results of a survey and one-on-one interviews conducted by Forbes Insights in March 2011. Forbes Insights, in association with Wipro, surveyed 308 C-level executives at large global enterprises with annual revenues of more than US$500 million. About a third worked for companies with annual revenues of $US5 billion or more. All respondents had C-level titles, including CEO (40%), COO (10%), CFO (13%), CIO (15%), CMO (10%), and other C-level executives (13%). They represented a wide range of industries, including manufacturing (28%), banking/nancial services (23%), retail (10%), telecommunications (10%), insurance (7%), and energy (7%) Geographically, 37% of respondents were located in the U.S., 6% were located elsewhere in the Americas, 39% were from Europe/Middle East/Africa, and 18% were from Asia Pacic.

ACKNOWLEDGEMENTS
The Global CXO Outlook was produced by Forbes Insights in association with Wipro. For Forbes Insights, Bina Jang wrote the report. Stuart Feil is the practices editorial director, and Christiaan Rizy is the director. For more information about Forbes Insights, visit: www.forbes.com/forbesinsights Forbes Insights would like to acknowledge the support and contributions of Karthik Negandra and Rahul Koul of Wipro in helping to develop the theme of the study and rene the report.

ABOUT WIPRO
Wipro Technologies, the global IT business of Wipro Limited (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company, that delivers solutions to enable its clients do business better. Wipro Technologies delivers winning business outcomes through its deep industry experience and a 360 view of Business through Technology helping clients create successful and adaptive businesses. A company recognised globally for its comprehensive portfolio of services, a practitioners approach to delivering innovation and an organization wide commitment to sustainability, Wipro Technologies has 120,000 employees and clients across 54 countries.

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