Recently, we queried numerous CEOs of public companies on two specific questions;
*How far into the future can you see with enough clarity to be truly confident about
making decisions today?
*What must change to provide the clarity for you to make strategic moves and
investments?
Here is what we have learned.
The vast majority of CEOs believe that they can only see a quarter ahead. And, that
limited view is affecting their willingness to commit to the future.
In our discussions, even with strong balance sheets and cash on hand positions, most
CEOs sense a risk and danger of committing resources now. In fact, most of the CEOs
felt stymied in executing growth oriented strategies, believing on balance that a safer route is to emphasize operating efficiencies. None were “all in” betting on the future. Few were considering scale oriented acquisitions.
In fact, as we suspected, it is uncertainty that is making the majority of CEOs play
prevent defense.
And that led us to ask… what would have to change?
Simply, the answers were all over the place from taking steps to resolve the debt crisis, clarity of tax policy, an effective answer to Europe’s problems (one referred to Ford’s woes, a second referred to the global slowdown and impact on repatriated earnings, and another mentioned the stability of the global financial institutions, et al.) All mentioned our November elections but most agreed that even with that “certainty” behind us, that they had little faith that was enough to move the needle to act more bodly. Sustainability via earnings prowess remains a major focus.
Yet, we held discussions with a handful of CEOs who view uncertainty differently with a
distinctive view of “enterprise opportunity” and competitive advantage. They seek to balance the realities of today, i.e. improving shareholder value with actively investigating investment alternatives.
Investment in innovation tops their list seconded by toe-‐in-‐the-water positions in emerging, i.e. positioning for the recovery, whenever it occurs, while extending global reach. For sure, these are only small steps but forward investment nonetheless. Moreover, these CEOs say that they were willing to consider a major acquisition but admitted that they reviewed few that are warranted now.
Our Observations….
As a “Sensitive Matters” search firm, we meet with leaders daily. CEOs, generally, are highly competitive and are accustomed to winning. They didn’t achieve a leadership role by being passive.
How to win is very much on their frontal lobe.
Without a doubt, regardless of scale, company size, or competitive set, the current economic and political headwinds are creating stress on leadership and in the corporate boardroom that we have rarely observed.
So what’s the answer?
Waiting is not the answer. More CEOs are sensing that the time to act, but act
carefully, is upon us!
Leadership that is forward-looking will prevail. It will take time for the innovators to be seen as having the edge. When it becomes clearer, the pack will follow. They always do!
By then, those CEOs with a vision will leave the less visionary in the rear view mirror. This has been true coming out of every period of economic malaise and there is nothing to believe that whenever this recovery picks up steam, that it will be any different. Talent linked with a carefully crafted investment strategy will prevail…time tested and proven.
The time to move forward and pivot is now.
Which leader will you be?
What will be your legacy?