Section 1: CEO Challenges and Issues
The first section deals with several general issues raised by CEOs during the qualitative stage of the research in 2006 which were validated by the results of the 2007 CEO survey. In the first question, respondents were asked to rate the importance of 13 issues on a seven point scale ranging from "not important" to "very important." Two new items addressing tax issues were added to the 2008 survey because of the high profile discussion of taxation in late 2007 and early 2008. Summary results are presented in Figure 1.
Note that most items receive importance ratings that are statistically equal to the ratings received in 2007. Once again, most issues are perceived to be very important, with "corporate reputation" and "customer loyalty and retention" topping the list. Two other issues see their ratings increase significantly from last year: "consistent execution of business strategy" and "sustained, steady top-line growth." These both appear to deal with stability of challenging performance issues during these times of economic uncertainty.
The next grouping contains three issues: "natural resources prices" and the two new tax issues. Somewhat surprisingly, the two tax issues did not rate especially high despite the amount of press coverage and political discussion directed to these topics. Likewise, respondents rate "natural resources prices" as being of moderate importance, perhaps reflecting the perception that these are largely outside the control of an individual organization or company.
Once again, the two global issues: "growing the business internationally" and "keeping pace with global competition" are rated as being of relatively low importance. This might also be considered a surprising result given the large and increasing coverage of global issues in national business media outlets and industry trade publications. However, closer examination of the pattern of responses to these items indicates that, as was the case last year, the distribution of ratings is definitely bimodal. This means respondents tended to rate the issues at the extremes of the scale: some CEOs think global issues are of critical importance while the remainder think such issues are not relevant to their organizations.
The second question of this section asks how likely it is that an organization will engage in one or more of several possible activities. Summary results appear in Figure 2.
As in 2007, "succession planning" and "adding jobs" are the top two activities planned for the next 18 months. However, ratings for "succession planning" are significantly higher in 2008 than they were in 2007. Surprisingly, despite the economic slowdown which was evident even in the spring of this year, ratings for "adding jobs" remain as high as they were in 2007.
The next grouping of activities, "new sources of financing," "mergers, acquisitions or alliances," "debt reduction," and "outsourcing," are all rated near the midpoint of the scale and all remain unchanged from the 2007 CEO survey. Interestingly, the rating for "alternative energy sources" increased significantly over the past year.
Those activities rated as the lowest on the likelihood scale are “reduce jobs” and “relocate outside Indiana.” Again, given the state of the economy, it is a bit surprising that job reduction is rated at about the same level as it was in 2007. Likewise, plans to relocate outside Indiana seem to be uncommon.
The third question of this section asks “how challenging” each of several issues are to executives and/or their organizations. Summary results appear in Figure 3.
"Having enough time" receives a rating of nearly six on our seven-point scale, making it the most challenging of seven issues from our respondents' perspectives. The rating of this item remains the same as last year.
The next grouping of challenges, "human resources," "rising customer expectations," "customer retention and loyalty," and "keeping up with technology," contains the same items as it did last year.
The two items receiving generally low ratings are "rising shareholder expectations" and "global business issues." Both of these items were also rated in the same relative positions in the 2007 study. However, as with the global items in question number one, there is a bimodal distribution of responses to the "global business issues" item, indicating that the issue is extremely challenging to some, while it is largely perceived as not challenging (or even relevant) to others.
We added an open-ended question (Question 4) in the 2008 survey to determine whether there are important issues on the minds of our respondents which are not reflected in the first three questions. Fifty-five, or 24%, of the respondents mentioned at least one item. There is very little overlap in the specific issues identified. However, of those responding to this question, 20% mention government and regulatory issues and 18% mention employee acquisition and/or benefits issues.
