This is the maiden issue of the Financial Executives Institute of the Philippines’ (FINEX) regular column; and what a more apropos time to launch this than today, April Fools’ Day, not because we will spread practical jokes and hoaxes, but because today also marks a jubilation related to the turn of the seasons, as originally celebrated in ancient cultures.
Indeed, senior business and government executives, also known collectively as the C-suite, are facing major shifts and “turns of the seasons” relating to their businesses and organizations, and the environment in which they operate. With the impending US and Philippines elections, the looming presence of China as a global force, the pressing threats on cybersecurity, the implementation of the Asean Economic Community, and the rapidly changing consumer preferences, never before has the C-suite been challenged in this magnitude in the last several years until now. In fact, a number of recent C-suite studies point to this observation.
One is PwC’s “Global CEO Survey,” published in January 2016, which polled more than 1,400 CEOs across 83 countries, showing that the confidence levels of global CEOs are at their lowest ebb than at any other time in the last three years. Moreover, it showed a noticeable decline in CEO confidence in the global economy compared with last year, a marked increase in geopolitical uncertainty, falling confidence of CEOs in their own businesses’ performance, growing concern over the availability of talent, high level of concern on exchange rate volatility and over-regulation.
The heightened pessimism among global CEOs is likew ise due to significant global events such as security concerns, conflicts in the Middle East, declining crude oil price and China’s economic shifts.
Another study is that of Deloitte’s, which surveyed CFO Sentiment in Q4 of 2015, showing a similar sobering theme, such as the slow pace of the global recovery, the future economic impact of the US presidential elections, the huge risk to the anticipated “gradual economic recovery” due to the further slowdown in the Chinese economy, and increasing government regulations.
But conversely, the same study points to the fact that many CFOs remain confident about their own companies’ prospects and future growth. Many of them expect an increase in margins, capital spending and employment. Majority of North American CFOs say investing for growth remains the top priority for the use of cash. Many European CFOs will focus on expansionary strategies this year, although productivity, efficiency, and cost-control remain high priorities. Lastly, as the study emphasized, interest rates are not on the list of concerns, which should allow CFOs continued access to capital for growth plans.
The ambivalence of the C-suite toward future prospects is but understandable in this dynamic world. Cautious optimism has remained the mantra of senior executives. That’s why they have to develop skills other than their functional ones, and keep abreast with news and developments in the business milieu.
A Harvard Business Review article entitled “The New Path to the C-Suite” points to a consistent finding that “C-level jobs have shifted toward business acumen and ‘softer’ leadership skills. Technical skills are merely a starting point… To thrive as a C-level executive, an individual needs to be a good communicator, a collaborator and a strategic thinker.”
That’s why the writers of this column endeavor to impart their knowledge and experience to the readers, who may be C-level executives, up-and-coming professionals and business owners to help them, in our own little way, in the preparation to deal with this ever-changing world.
Our roster of writers, apart from myself, includes Ms. Wilma Miranda, a veteran finance and BPO executive who is the chairperson of the Media Affairs Committee of FINEX, managing partner of Inventor, Miranda & Associates, CPAs and treasurer of KPS Outsourcing, Inc; Mr. Benel Lagua, executive vice president at the Development Bank of the Philippines and a long-time advocate of risk-based lending for SMEs; and Ronald Goseco, a veteran CFO in the Ayala Group and executive vice president of FINEX.
We all look forward to sharing our views on critical C-level issues… and hopefully making an impact.
The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of FINEX. The author may be emailed at firstname.lastname@example.org or visit his website at www.reylugtu.com.
The author is a senior executive in an information and communications technology firm. He is the chairman of the ICT Committee of FINEX. He also teaches strategy, management and marketing courses in the MBA Program of the Ramon V. del Rosario College of Business, De La Salle University.