CEOs’ Top 4 Concerns for the Future

1. SEARCHING FOR NORMALCY AND GROWTH

CEOs wonder if either will ever come back, given uncertainties that confound business around the world.

ROGERS “The uncertainty around taxes, healthcare and regulation means that there’s an economy of 2% to 4% more growth that sits on the sidelines that wants to get into the game, but some of this uncertainty is keeping them from doing it.”

KLOCK “Growth is slowing down, so that has me a little concerned. And productivity is down. The general flow of goods is slowing, maybe signaling that it’s going to be a softer year next year.”

DOUGHTIE “CEOs are conveying to me that they’re concerned about macro issues,” such as lackluster business investment and shaky consumers, “but they feel well-positioned over the next 12 to 18 months. But there’s more uncertainty about getting to growth at the same levels as the last few years.”

MONSON “The U.S. economy will continue at this lackluster, tepid kind of pace. We’ll probably come in at about a 2 percent increase in GDP next year. Economists keep revising their forecasts downward.”

KELSEY “The overall economic environment in the U.S. looks quite good, the confidence is good, and the metrics are good. Especially if you look at the U.S. from a European perspective.”

FIBIG “We aren’t just dealing with election results in the United States. They are also in France and Germany” in 2017. “There are [vacillating] raw material prices.”

JONES “The world’s not becoming a safer place.” Threats of terrorism “are a topic with our customers every day. And it’s getting more expensive to try to guard against them.”


2. GOVERNING AFTER THE ELECTIONS

CEOs are concerned about the nation’s hangover from the 2016 campaigns, as well as the state of regulation.

KLOCK “The elections were really about attacking, not ultimately about agendas that will truly be relative to business. So as people are unsure of the broad impact of this election, [CEOs] will go into a hold mode until we get a sense of where we’re headed.”

MURPHY “There’s more government and global uncertainty, which will increase potential regulation—and that will be bad for business.”

MONSON “The single biggest concern I have about my company and my business and franchising in general is government over-reach.”

POLK “The government could do its part to create incentives for companies to invest. But we’re not counting on material changes there in 2017.”

MIKE MURPHY “I’m concerned about uncertainty that was created by the elections, not only for president but also the House and the Senate, and continued uncertainty related to the Affordable Care Act.”

ROGERS “I’m not sure we put our finger up in the air and say that one political thing or another is going to dramatically change the environment we work in.”


3. GRASPING FOR GOOD LEVERS

Whether it’s capital spending, digital innovation or talent recruitment, business leaders are seeking new paths to growth.

PENSKE “We’re investing $200 million this year in capital expenditures throughout the world, and that’s twice our depreciation.”

DOUGHTIE “There’s never been a time when investing in the business has been more important. The topic that comes up most within our own organization and in talking with clients is the need to continue to innovate, to deal with new technologies to improve their business models.”

RIZAI “Innovation is going to be better for business as they optimize technology. When the tide rises, all boats rise with it.”

CLARKE MURPHY “We find that corporate boardrooms are confident in investing in people and in their businesses; our pipeline is the best it’s ever been in the U.S. But everyone is cautious.”

JONES “Higher wages we pay are driving our customers to look at using more technology to try to find ways to offset labor costs,” such as doing more remote monitoring and hiring fewer patrol personnel.

BLACK “Mobile will continue to be a huge growth driver.”

SHAWE “The gig economy is powering our growth as we work with 20,000 contractors as part of our own ecosystem, increasingly linking them together through training and the use of technology.”


4. GAUGING THE GLOBAL ECONOMY

Brexit’s mainly a yawn, but CEOs aren’t counting on overseas to bail their companies out of slow-growth mode.

KELSEY “China is not as strong as it was. And with Brexit, there are too many people with no clue about it. There’s some uncertainty, but it’s settling down now.”

RODRIGUEZ “Regardless of world occurrences—whether it’s Zika or terrorist activity—the luxury sector feels that it’s still their right to travel. And so we’re bullish on them for 2017.”

SHAWE “I’m not concerned about Brexit: Switzerland has never been in the EU, and not every company is going to move its offices to Amsterdam. The UK already had its own immigration policies and currency.”

RIZAI “Europe is going to do well, and the UK will do well in the long term,” after Brexit.

FIBIG “China’s GDP is still growing 6 to 6.5 percent a year, which is still more than Europe and the U.S. And a hot area for us is Africa and the Middle East, with good double-digit growth rates despite all the political turmoil.”

POLK “You have to be prepared to ride the rollercoaster if you want to access double-digit growth, like the Brazil experience, Venezuela now, Turkey in 2005 or Argentina in 2002. You have to absorb those hits.”

ROGERS “I don’t think we’ll see one particular region breaking out dramatically disproportionate to anywhere else, like we saw in the past with Brazil and China. We’ll see more of a reversion to mean, and the mean being a little bit lower.”


Feature: CEO Outlook 2017
Sidebar: Roster of CEOs

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