CEO Roundtable:
The Road to Recovery
Nine CEOs share management strategies and ideas
for becoming part of the economic solution.
Andrew French
Recent news reports suggest that many economists think the recession is behind us. But in a roundtable discussion, excerpts of which appear on these pages, nine chief executives from various industries beg to differ. In a spirited discussion, they also reveal strategies that have worked during these trying times, benefits their companies have experienced from the crisis, and the keys to — and challenges of — being a corporate leader under today’s intense scrutiny.
Roundtable Participants
(pictured above, from left)ED FRITSCH
President/CEO
Highwoods Properties Inc. (HIW)
An equity REIT in the business of acquisition, development and operation of rental real estate propertiesANUPAM NARAYAN
President/CEO
Red Lion Hotels Corp. (RLH)
A Western U.S. hospitality and leisure company primarily engaged in the ownership, management, development and franchising of upper midscale, full-service hotelsDUNCAN NIEDERAUER
CEO
NYSE Euronext (NYX)
The world’s largest and most diverse exchange group, home to more than 4,600 listed issuersCHRISTINE ROMANS
Moderator
Host of the weekend business roundtable program Your $$$$$ and a featured correspondent for American Morning, CNNDON WOOD
President/CEO
Federal Realty Investment Trust (FRT)
An equity REIT specializing in the ownership, management and redevelopment of retail and mixed-use propertiesBILL LAPERCH
President/CEO
AboveNet Inc. (ABVT)
A provider of high-bandwidth connectivity solutions, primarily to corporate enterprise clients and communications carriersRON WAINSHAL
CEO
AirCastle Ltd. (AYR)
A global company that acquires high-utility jet aircraft and leases and sells them to airlines worldwideIRV RICHTER
Chairman/CEO
Hill International Inc. (HIL)
A project management, construction management and construction claims firm with 2,300 professionals in 80 offices worldwideGREG MILZCIK
President/CEO
Barnes Group Inc. (B)
A diversified global manufacturer and logistical services company that provides component manufacturing and operating service support and solutionsANTHONY J. ORLANDO
President/CEO
Covanta Holding Corp. (CVA)
A global developer, owner and operator of infrastructure for the generation of energy from waste
Has the dust settled? Can we see a day when we’re talking recovery, or are we still playing defense?
IRV RICHTER I don’t think the dust has settled at all. I think that most of the talk you hear about the end of the recession is wishful thinking. We’re still being adversely affected, we have nearly 10 percent unemployment, and we have capital markets that are still not lending money. Anybody here who’s in the REIT business or the development business can’t get capital. And that doesn’t sound to me like the end of a recession. I think we’re at least a year away from a real recovery.
ANTHONY J. ORLANDO We’re expecting the unexpected. Whatever the predictions are, don’t take anything for granted. We went to market a few months ago to raise some capital — we’ve already found good ways to deploy it. There’s still so much distress in the market, so many people who don’t have capital, that when we see the opportunity to raise it at a reasonable cost, we take it. There’s also a lot of uncertainty about what the market will hold six months, 12 months out, even in our business.
GREG MILZCIK Most of the markets that we serve have started to show some level of stability. But you really have to look at the new normal. When you look at the demographics of Western countries and Japan, and at the personal balance sheets of individuals, there’s been a fundamental shift. With the fiscal monetary policies in the U.S., you’re inevitably going to run into inflation, either of commodities or other costs. We expect to see more of our growth prospects overseas and in dollar-denominated situations because of the potential devaluation of the dollar.
ANUPAM NARAYAN The new norm for the consumer is austerity. People are being more careful about spending, so we have to provide more value and make sure we’re delivering the services they expect. And my expectation is that this will continue. To some extent I believe we got into this recession because everybody was saying we’re in a recession and the headlines kept talking about recession, recession, recession. So I welcome people actually saying we’re at the end of the recession, because I hope we’ll talk our way out of it just as easily. And though in our business — hotels — we’re not seeing a lot of change yet, we’ve seen some glimmers of hope. We’ve seen some bookings firm up, businesses firm up, travel firm up.
RON WAINSHAL We’ve seen a lot of unbelievable volatility in our business. Fuel prices, for example, are a big input cost for our customers. Exchange rates have been extremely volatile too. So I think the recovery will be slow and uneven. One of the trends we’ve seen is that the airlines that are suffering the most are the ones that cater to the long-haul international type of high-end traveler. Economy travel is down as well, but it’s hanging in there a lot better. People still want to take their vacations; they just may not go in the same style or travel to the same places. I think it will continue to be a growth business, just in a different way.
BILL LAPERCH Even though the economy has been in chaos, bandwidth keeps growing. Every business you look at just needs more and more. But the way we keep our finger on the pulse of the economy is the way customers are buying. Three or four years ago, customers were buying to support new applications, new business ventures or new locations. Today customers have us in and say, “Take a look at this legacy network. It costs too much. It doesn’t provide enough capacity. What can you do about it?” And so CFOs are now the decisionmakers, instead of CIOs and CTOs. They want to know, “How do you affect the bottom line, given that we’re not growing as fast as we used to? Perhaps we can both save on expenses and upgrade our technology.”
