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The momentous events of the past few months coincided with the period in which we were conducting our latest Global CEO Survey.
"We've had to go from being very growth-orientated to, in many ways, a survival mode in which we continue to pay down a debt and work the balance sheet."
Chip Hornsby
Group Chief Executive
Wolseley plc, UK
We thus opted to analyse the responses we received each week to establish how CEOs were reacting at each stage. Our findings are based on a minimum of 24 responses per week. We also cross-checked the results to ensure that they do not reflect any regional or industry-specific biases.
The story our analysis reveals is one of steadily increasing gloom. In early September, most CEOs were still relatively sanguine; only 29 percent were extremely concerned about the prospect of a downturn in the world's major economies. But with the collapse of Lehman Brothers and the sale of Merrill Lynch to Bank of America on September 15, the level of anxiety soared.
Between 46 percent and 49 percent of the CEOs we interviewed during the first three weeks of October were deeply worried about the prospect of a global recession. These fears persisted even when the G7 nations announced a five-point plan to unfreeze the credit markets on October 11. In late October, news that China's economic growth had fallen below 10 percent proved conclusively (if any doubts still remained) that the emerging markets were suffering, too.
As disquiet about the parlous state of the economy mounted, so anxiety about some of the other issues that usually featured prominently in boardroom discussions dwindled. As an example, between 21 percent and 29 percent of the CEOs we interviewed in September were extremely concerned about energy prices. Between 17 percent and 21 percent were also extremely concerned about the scarcity of natural resources.
In late November, by contrast, the percentage of CEOs worried about energy prices and natural resources had dropped to single digits, although lower commodity prices probably helped to allay their concerns.
Léo Apotheker, Co-CEO of SAP AG, speaks on adapting quickly to changing environments to take advantage of the current economic situation.
The battle for brains also slid rapidly down the corporate agenda. Forty-two percent of the CEOs we surveyed in early September were seriously concerned about the availability of key skills but, by late November, the figure had shrunk to just 11 percent.
Rising unemployment may have played a part in changing the priorities of some CEOs. In the three months to the end of November, the percentage of unemployed civilians in the US population rose from 6.2 percent to 6.8 percent. The level of unemployment is increasing elsewhere, too. The number of people out of work in the UK has soared to more than a million for the first time in seven years, while the number of jobless in China is thought to be well above the official figure of 8.3 million, following the closure of an estimated 670,000 small firms in the wake of the global financial crisis.
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