Fourth Annual SMU Cox CEO Sentiment Survey™ Results Unveiled
“Is the light at the end of the tunnel an oncoming train?”
Dallas (SMU) – This year, SMU Cox School of Business and D CEO magazine set out to uncover the impact of the economic downturn on our region’s business leaders and their companies through the annual SMU Cox CEO Sentiment Survey™. Invitations to participate in the survey were sent to a comprehensive list of DFW-area CEOs and presidents, with 359 respondents completing the survey.
This year’s results demonstrated the usual Texas “can-do” spirit. Despite the economic downturn, the general business mood throughout DFW has improved, with more than half (57 percent) of this year’s respondents expecting business in North Texas to improve next year. However, this news is in sharp contrast to their outlook on the world economy, with only 30 percent expecting an improvement.
For the fourth straight year, Texas has maintained its position as the state with the largest population gain. Texas entered the recession later than the rest of the nation, and we outperformed the rest of the country in 2010. Halfway into 2010, we regained half the jobs that were lost in 2009.
Education is a critical issue that could derail our region’s growth and prosperity, with release of the movie Waiting for Superman generating heightened attention to the epidemic. Companies considering relocating to Texas must be convinced that region’s educational system will produce a quality work force.
The survey was compiled and conducted by Miguel Quiñones, professor of management and organizations at SMU Cox, and Robert Rasberry, assistant professor of management and organizations. It covers a range of topics: from the state of the economy to the quality of the DFW labor force, from leadership attributes most critical to success to the top competitive challenges CEOs face, including the personal impact of the downturn.
“Consistent with what we discovered last year, local businesses have weathered the economic storm better than the rest of the nation,” said Quiñones. “This year’s survey indicates an optimistic light at the end of the tunnel of recovery for DFW. Unfortunately the light in the tunnel to the rest of the world appears much more ominous.”
Select findings, at a glance, are below.
IMPACT OF ECONOMIC DOWNTURN
When asked how the downturn had impacted them personally, 68 percent reported that they had been affected negatively or very negatively (compared to 70 percent in 2009), reinforcing the fact that very few escaped unscathed. Seventy-eight percent reported a negative or very negative impact on their organizations – a three percent increase. Respondents indicated that their organizations have undergone minor (26 percent), moderate (34 percent) or significant (31 percent) as a result of the downturn. Forty-seven percent indicated that the continued recession is one of their top challenges for 2011.
ECONOMIC AND BUSINESS OUTLOOK
While 57 percent of CEOs expect the local economy to improve in 2011, optimism took a slight dip from 2009’s response. This information suggests that the current economic recovery is still fragile. However, the outlook for DFW, the U.S. and the world has improved from the 2008 report.
OUTLOOK FOR THEIR BUSINESSES
The number of CEOs expecting an increase in revenue over the next 12 months has increased as compared to last year (58 percent in 2010 versus 46 percent in 2009), indicating a trend in the direction towards recovery. However, a higher percentage also expect that costs will increase over the next 12 months (58 percent this year versus 46 percent in 2009). The net effect is a slight uptick in the percentage of CEOs who expect to see increases in profits in the year ahead (47 percent this year versus 44 percent in 2009).
LEADING THROUGH TOUGH TIMES
When asked to identify the top three attributes or skills that most contribute to a CEO or presidents success, respondents listed the following: sound decision-making (64 percent), strategic thinking (49 percent), and strong ethics (44 percent). They also cited being a good judge of people (28 percent) and having good interpersonal skills (27 percent), negotiation skills (18 percent) and courage (16 percent) as important.
RATING THE DFW AREA
More than 55 percent indicated that DFW represents the best growth opportunity for their company in 2011. CEOs were also asked to rate factors they felt contributed to our area’s quality of life. Cost of living (60 percent), quality of the travel and transportation infrastructure (13 percent), weather (8 percent) and entertainment opportunities (5 percent) were the key factors cited by this year’s respondents. However, 31 percent believed the public school system needed improvement.
ETHICS AND SOCIAL RESPONSIBILITY
Despite the erosion of trust in government and big business, only 49 percent of respondents have a formal ethics program. However, 54 percent of respondents have incorporated one aspect of social responsibility and/or sustainability into their formal business plan.
Gary Kelly, Chairman, President and CEO of Southwest Airlines Named "CEO of the Year"
As part of the survey, participants were asked to nominate their choice for "CEO of the Year" - the top CEO/president currently serving in DFW, based on organizational and DFW community impact. Gary Kelly, chairman, president and CEO of Southwest Airlines was named CEO of the Year for the second year in a row.
"Southwest Airlines continues to serve as a prime example of how companies can succeed despite the current downturn," said Rasberry. "The company has remained focused on customer service, low prices and convenience. It takes a strong leader like Gary Kelly to generate profits and growth in the midst of a very challenging time for the airline industry."
The “CEO of the Year” and survey results were unveiled November 16 during a reception at the Cox School of Business, sponsored by Infiniti, Godwin Ronquillo, A Professional Corporation, and Tony Jeary International, The Results Guy™. Comprehensive survey results can be viewed at www.coxceosurvey.org. The results will also be featured in the December issue of DCEO.
About SMU Cox
SMU’s Cox School of Business offers a full range of business education programs, including BBA, full-time MBA, Professional MBA (PMBA), Executive MBA , Master of Science in Accounting, Master of Science in Management (MSM) and Executive Education. The school also offers a number of unique resources and activities for students, ranging from its Business Leadership Center (BLC), Caruth Institute for Entrepreneurship, Maguire Energy Institute and American Airlines Global Leadership Program (AAGLP) to its Associate Board executive mentoring program and an international alumni network with chapters in more than 20 countries. SMU Cox is ranked among the top business schools nationally and internationally by major publications, including Bloomberg Businessweek, The Economist, Financial Times, Forbes and U.S. News & World Report.