NEW YORK, Oct. 28, 2014 /PRNewswire/ -- America's top business leaders ("CXOs," executives currently in the C-suite, and "CXOs-in-Waiting," or "CXOWs," executives who are likely be promoted to a C-level position in the next five to 10 years) are confident in their ability to outperform the competition. However, they are not acting with confidence when it comes to making business decisions or addressing specific obstacles, according to Deloitte's inaugural Business Confidence Report 2014: The Gap Between Confidence and Action.
A majority of America's top business leaders (66 percent of CXOs and 63 percent of CXOWs) say they are very confident that their organizations will outperform the competition over the next 12 months. But when asked about their confidence in their ability to address specific obstacles to growth, nearly half had some doubts (43 percent of CXOs and 44 percent of CXOWs).
"While the U.S. economy is slowly recovering, we still see capital sitting on the sidelines due to escalating economic and political uncertainties around the world," said Jim Moffatt, CEO and chairman of Deloitte Consulting LLP. "As competition intensifies, there has never been a more crucial time for America's top business leaders to be confident and place bold bets. Yet our survey reveals a lack of investments in those areas CXOs indicate are fundamental to growth. The actions taken now will determine which businesses will thrive in 'the new abnormal,' and those that may struggle to succeed in a rapidly evolving marketplace."
The inaugural Deloitte Business Confidence Report, conducted between July 7 and Aug. 4, 2014, explores America's top leaders' confidence in the overall direction of their businesses, how they are addressing obstacles to growth, their outlook on talent and leadership, and their views on innovation.
America's top executives are not acting or investing with confidence for the long term
Nearly half of CXOs surveyed admit that they do not display confidence in high-risk (49 percent) or long-term (46 percent) business decisions.
The report shows that CXOs demonstrate a lack of focus on investment areas that are most likely to help them overcome the issues they've identified as being obstacles to growth:
- Nearly three-quarters (72 percent) of the CXOs who say "cyber risk" is an obstacle to growth do not prioritize investments in both technology and incident response.
- More than two-thirds (67 percent) of those CXOs who cite "competition from emerging markets" as an obstacle to growth do not prioritize their investments in both employees and business strategy.
- More than one-third (35 percent) of the CXOs who cite "shortage of skilled workers" as an obstacle to growth do not prioritize investments in employees, such as advanced recruiting and training programs.
America's business leaders lack confidence in future leaders
A majority of CXOs surveyed (52 percent) and CXOWs (59 percent) do not think that their direct reports have the skills to assume greater leadership roles in the organization.
When asked about the obstacles to greater leadership among employees, nearly half (44 percent) of CXOs cite lack of personal ambition and motivation, while half (50 percent) of CXOWs, who have expressed the ambition to become part of the C-suite, cite lack of access to leadership training.
"In my conversations with CEOs, growth and talent consistently come up as the top challenges facing businesses," continued Moffatt. "It's clear that today's business leaders recognize the importance of talent development, but are challenged with identifying the right investments that will make the most meaningful impact on employees. Executives need to make a bigger commitment to developing leadership at all levels of the organization to cultivate a strong talent pipeline."
America's top executives are confident in their ability to innovate, but are divided on how to drive innovation
Findings of the survey indicate that 73 percent of CXOs and 75 percent of CXOWs believe in the ability of their organization to innovate faster than the competition. Yet, they are divided as to the nature of innovation: 53 percent of CXOs and 50 percent of CXOWs say innovation is learned and repeatable, while 47 percent of CXOs and 49 percent of CXOWs say it is spontaneous and random.
When asked about how they foster innovation, CXOs have difficulty pinpointing a specific factor, as they use a variety of methods such as: allowing time for employees to innovate (45 percent), building a culture that embraces innovation (43 percent), adopting new technologies (42 percent), and encouraging team work and collaboration (42 percent). Meanwhile, some of the more structural and process-oriented methods used to drive innovation are preferred by fewer CXOs: Only 36 percent of CXOs say they are incorporating contributions to innovation in performance reviews, and 33 percent say they are applying innovation processes and practices to fuel innovation.
"America's top business leaders have the power to change the direction of the economy," said Moffatt. "In order to drive long-term business growth, leaders need to make courageous decisions and invest in areas such as innovation, R&D and talent. They must also better detect and anticipate disruptions, quickly decide which ones matter and which ones don't, and effectively prioritize investments. To do that requires confidence — not just in words, but also in actions."
About the Survey
The Deloitte Business Confidence 2014 survey was conducted among two groups: 1) 300 U.S. "CXOs," defined as U.S. adults employed full-time with C-level titles at companies with 1,000 or more employees, and 2) 300 U.S. "CXOs-in-Waiting," defined as U.S. adults ages 33-48, employed full-time, with a professional title of SVP, executive VP, or equivalent, at companies with 1,000 or more employees, who will likely be promoted to a C-level position in the next 5-10 years. All survey respondents also had a college degree or advanced degree.
The survey was fielded between July 7 and Aug. 4, 2014, using an email invitation and an online survey. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 5.7 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
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