Leading in a Time of Uncertainty
Business leaders discuss how they’re growing their companies despite a shaky economy.
JOÃO CANZIANI
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E-mailA gathering of CEOs on the day NYSE Euronext released the findings of its seventh annual NYSE Euronext CEO Report gave leaders of companies diverse in industry, region and size an opportunity to share their ideas and strategies amid lingering uncertainties. The mix of public and private company leaders revealed optimism about growth in their businesses as they look toward innovation and embrace social media. Here are excerpts from the discussion, which was moderated by Jeffrey T. Resnick, global managing director of market research firm ORC International.
The 2011 NYSE Euronext CEO Report found business leaders to be relatively cautious, if not concerned, about the outlook for the global economy, yet more optimistic about their own businesses. How do you view your company’s growth prospects, and what does 2012 look like to you?
ROLL CALL
Roundtable participants included:
Justin A. Brownhill
Co-Founder and CEO,
The Receivables ExchangeAlexandre Douzet
Co-Founder and President, TheLadders.comDuncan L. Niederauer
CEO, NYSE Euronext
(NYSE: NYX)Nicholas T. Pinchuk
Chairman, President and CEO, Snap-on Inc. (NYSE: SNA)Carley Roney
Co-Founder and Chief Content Officer, XO Group Inc. (NYSE: XOXO)Glenn Stevens
CEO, GAIN Capital Holdings Inc. (NYSE: GCAP)N. V. “Tiger” Tyagarajan
President and CEO,
Genpact Ltd. (NYSE: G)For more detailed biographies, click here
GLENN STEVENS It may be hubris, but as a CEO you have to believe in your vision, your team and your opportunities. That said, we absolutely feel the shadow of the global malaise, so it’s hard to have general optimism. There’s so much that’s outside of our sphere of influence and opportunity to effect change.
N. V. “TIGER” TYAGARAJAN You may have gotten a slightly different answer if you asked the question later in 2011. Given the economic uncertainty, most of our clients, particularly large corporations, are saying, “I’m not going to get ahead of myself; I’m going to protect myself for the worst.”
NICHOLAS T. PINCHUK We’re investing 20 percent more than we invested last year. We’re hiring. But do we trumpet that? By nature, CEOs of public companies are conservative. You emphasize uncertainty, even when you are optimistic, as we are. Snap-on is in the repair business, so we’re a bit recession-resistant. But vis-à-vis what happened in 2008, 2009, I feel positive.
In 2009 the bad news that everybody got each morning when they turned on CNN or CNBC really affected views. Now, despite all this macroeconomic bad news, I see more resilience. People aren’t moving as quickly on this bad news for breakfast. That gives me hope for expansion.
CARLEY RONEY XO Group is also recession-resistant because our business is built on life stages that are essential. People continue to get married, continue to have babies, no matter what happens. In fact, in bad economic times, marketers turn to a sure thing.
That said, the psychology surrounding the economy affects employees, and their concerns about your company affect customers and their feelings. So on that level, you always have to keep things tempered. But we’re investing for next year and expect nice growth.
ALEXANDRE DOUZET The inklings we are getting from clients looking to hire in 2012 so far are good. Most sectors are telling us, “We need to hire, and therefore we’re looking at renewing or expanding the contract.” So I remain cautiously optimistic. A year ago at this time, we were getting similar signals. Things actually went really well through the first quarter; then clients began to rein in expenses in the second quarter, which became a deterrent for the rest of the year.
JUSTIN A. BROWNHILL It’s been a tale of two economies: Large corporate clients have amassed cash that we’re all hoping they will start spending. The small business community is under a double credit crunch. It has limited access to affordable capital, so the only guaranteed money that comes in is from their revenues. Pre-2008, revenues came in an average of 40 days after companies delivered goods or services. Today they come in 60 days later. So not only do small businesses have capital access difficulties, but they have a difficult time just collecting payables from their large customers.
“The small business community will be flat at best until large-company cash starts flowing back through the economy.”
— Justin Brownhill
We are one solution helping small businesses get access to capital. We’re also hoping that large companies start putting purchase orders out to small business suppliers again and start paying quicker. We were starting to see some positive signs in the first half of 2011. With small businesses reporting net growth both in revenues and expenses, people were starting to put their foot on the job gas pedal again. But more recently we have begun seeing stagnant growth with the EBIT level slightly down quarter over quarter. The small business community will be flat at best until large-company cash starts flowing back through the economy.
DUNCAN L. NIEDERAUER SMEs are the job-creation engine. So we’re spending a lot of time in Washington, D.C., trying to get attention paid to some of those things Justin just mentioned. It’s hard for any of us to be optimistic with the macro environment being what it is. And yet Glenn’s right: Everyone feels pretty good about their own business opportunities. Every company I talk to is leaner and more globally diversified than they were. They’re ready to be responsive, which is why you’re not sensing this panic that you had three years ago.
