Name: PwC Global Chairman: Why CEOs are Pessimistic About 2020 Business Outlook
Uploaded: 2020-01-07
Duration: 5 min 54 s
Description: Uncertainty about China trade, Brexit, and who wins the U.S. presidential race has made CEOs less confident about their business decisions.

[ MUSIC ] Bob, you talk to CEOs who run four to five companies all the time. Well, after all they are your PWC clients. When it comes to the economy, what are they telling you about how they see the economy doing in 2020? Are they optimistic or pessimistic? In general, I would say they are more pesimistic. They're pessimistic because of the number of issues that they've got to deal with, the number of stakeholders they've got to deal with and the trend lines that we all seek. Having said that, there's a few that are seeing lots of opportunity in that pessimism. And it's all about the execution. So a lot of CEOs are saying what do I need to do to execute better in a slowing economy? In a more difficult and challenging world. So what is like the top one or two things that make them so pessimistic? I would say you look, it's the geopolitical issue that gets you to the trade wars. So that's one element of it. And second is the totality of the uncertainty. You've got uncertainty coming out of China in terms of slowing economy plus the trade wars. You've got a Brexit issue. In terms of what's the role of the UK going forward and the EU for that matter. You've got a political issue here in the US in terms of what may happen come next November when we get through an election cycle. You've got a lot of social unrest if you look around the world. Not necessarily just Hong Kong, but even South America's a good example of that. So, all these things combined, Gives them this uncertainty when they're making decisions and that uncertainty causes them to slow and to pause and not be so confident with the decisions they're making. In terms of the overall view about the economy. We all know that consumers really propped up the US economy in 2019. Are businesses counting on a repeat that Americans are gonna continue to spend in 2020? The one thing you can say when people look at the U. S. for opportunity, the resilience of the country, the consumer confidence, and the consumer experience, as well as the willingness to actually see innovation come to life. That's a positive for CEOs in the U. S ., it's a positive for CEOs around the world that continue to wanna invest in the U. S ., and when we look at our own statistical analysis, and our own surveys for CEOs The number one destination for investment outside their home country. US, so yes, that's going to be banked again as we go forward, but it's all about how do I continue evolve and be relevant to the consumer. So it would seem that, that would do a lot to prop up a business confidence. I mean, what's your take on business confidence when it comes to things like investing in their business spending more with Willing to take more risks if it means innovations for the company .>> They're willing to do it but again, it's a little bit slower because of all that uncertainty I talked about. There's another element which is okay, how many more risks do I have to worry about before I jump in and make that decision? How big of a risk am I willing to take now because, Maybe laws will change, maybe regulation will change. What happens if we go backwards on Taxation? So a lot of those uncertainties when you combine it with politics and geopolitics, causes them to be a little bit more slower and probably a little less confident on their business, then the consumers are in their own personal agenda. Well, you brought up politics. I mean, certainly that confidence is gonna depend a lot on what happens with the presidential race. When you talk to CEOs, do they believe that the business environment would do better under President Trump or perhaps a Democrat in the White House? What are you hearing? It depends on who you talk to. It's not that simple anymore. You get a combination of let's recognize over the last couple of years, the business community. Is very positive about the changes to regulation, which is always been an overburden and taxation and simplification of that and for the US to be much more competitive, in terms of who will be better. I'm not sure people are asking that question what they're asking is, Regardless of who's in there and what gets done, how do I execute with the facts in front of me? Control what I can control, and for all I can't control, scenario plan. Let's turn and talk a little bit about leadership, because we are entering into a new decade. What will it take for a CEO to lead successfully over the next ten years? They've gotta move with speed like they've never done before, and they've got to change the organization like they've never done before. Because the world is collapsing around them. So what do they need to be successful in that environment? You better have some thick skin. The world is now judge and jury, the social media devices that everybody have, every stakeholder can take a shot at that CEO and the decisions they made. The question is, is that CEO gonna react or not react and move forward with it and be threatened by it. Second, you better make sure you've got the support of your organization because the top down concepts of a CEO and a leadership position, making the decision And assuming everybody else is gonna do it, no longer the case. Think about the activism that's coming from employees right now. That's a huge difference than where we were before. So if you're not bringing the employees along, your consumers along for that ride, you are really gonna be in harm's way. If in fact you're not communicating the narrative of what you're doing and why you're doing it. And that's the important part, not just what, but also why. You're a big believer that business leaders need to comit to a purpose that contributes to social progress in a meaningful way. What are you telling CEOs to do in that area? Look at your stakeholders and define who they are. And make sure you and the organization's engaging with them. A dialogue, not telling them one side of what I do and why I do, it's gotta be a dialogue so they feel like they're being heard. Second, you're never gonna satisfy all of them, so get ready. Make sure you have that thick scan, cuz they're not gonna be happy with you with some of the decisions that they make. Third. Have your other employees and other members of the management team tell the story. The clients, the customers, the employees telling that story in a social media tweet, and all the retweets that comes from it. That helps tell the story, because peer to peer trust now. Is much more important than what I call a cascading command and control trap of trust. And last but not least, you got to be explaining the trade offs. So you're making a decision over here. I had three other options. Let me walk you through the pros and cons of that and recognize you're never gonna win and you're always gonna be on attack. Stay certain in your objectives and plow through it. Get the execution to prove that it's working. [ BLANK_AUDIO ]

PwC Global Chairman: Why CEOs are Pessimistic About 2020 Business Outlook

Finance

Uncertainty about China, Brexit, and the presidential race.

Why CEOs are Pessimistic About 2020 Business Outlook

Uncertainty about China trade, Brexit, and who wins the U.S. presidential race has made CEOs less confident about their business decisions. 