Navigating Global Turmoil: A CFO Perspective
If there’s one word that well describes the current state of global affairs, it is “turmoil.” Whether it stems from commodity markets, politics or sovereign debt crises, uncertainty has become a constant that affects every business decision we make.
At Pearson Partners’ Q4 2011 Spotlight Series event, our panelists discussed domestic and global uncertainty and its impact on their business strategies.
Our esteemed panel members included:
- David B. Brown, Chief Financial Officer, Dresser, Inc.
- Patrick H. Daugherty, Former Partner, Head of Distressed and Co-Head of Private Equity Group, Highland Capital Management, L.P.
- Steven J. Janusek, Executive Vice President, Chief Financial Officer and Treasurer, Reddy Ice
- James E. Shields, Executive Vice President and Chief Financial Officer, MoneyGram International, Inc.
The Big Picture
Faced with continuing uncertainty, many businesses are holding onto their cash and keeping receivables down, working capital in hand, and inventories thin. Lenders are sitting tight, waiting to see what happens next. And consumers—seeing the high unemployment figures in the news—aren’t spending either, which has a major impact on businesses, especially those that depend on consumers’ recreational and discretionary spending.
The key to economic recovery will be eliminating uncertainty. The 2012 elections will play a big role in that, affecting decisions about critical issues such as the housing market and corporate taxes. However, change won’t come quickly, and consumers and businesses may have permanently changed their mindsets and lifestyles to adapt to a new economic standard.
Changing immigration patterns, both domestically and globally, have had a big effect on many businesses. For example, MoneyGram has shifted its investments into countries where immigration is increasing, as people around the world travel to find work and send money back home. Here in America, the money transfer business is up, as many foreign workers send money home and others find it’s cheaper to use a money transfer service than to drive money across town. Immigration provides workers to replace American baby boomers aging out of the work force, but our panelists agree that the inflow of workers must be controlled to ensure that they contribute to and offset the social services they receive here in the United States.
Overseas, the European currency crisis continues to drag down the global economy, creating insecurity that has a negative effect on our economy here in America. China, however, appears to be heading for a soft landing after its crisis period, which could be beneficial to the U.S. in terms of lower commodity prices.
The Job Market
The retained search industry has always been a leading indicator of economic health, and we at Pearson have experienced a strong year in 2011. There has been consistent demand for our services both domestically and globally, across multiple industries, indicating that companies are looking for good talent to lead them through challenging times.
However, in tough times, top talent is often harder to find, as many of the best leaders have jobs and are hesitant to leave them due to uncertainty and a housing market that discourages relocation.
The plus side for those in the job market: companies facing tough challenges are looking for experienced, wise executives, which could mean more opportunity for older executives who have the drive to work hard, stay relevant, start their own consulting businesses or take temporary work. (See our related article, Tips from Leadership Coach: To Consult or Not to Consult, about navigating these choices.)
Next Spotlight Breakfast Series Event
Mark your calendars now for our next Spotlight Breakfast Series event scheduled for March 6, 2012. Look for details and invitations in February. Did you miss one of our Spotlight Breakfast Series events? Check out summaries of past events.