Third Annual SMU Cox CEO Sentiment Survey™ Results Unveiled

Gary Kelly, Chairman, President and CEO of Southwest Airlines Named "CEO of the Year"

Dallas (SMU) - For the third year, SMU Cox School of Business and D CEO magazine have set out to discover what is on the minds of business leadership in Dallas with its annual SMU Cox CEO Sentiment Survey™. Invitations to participate in the survey were sent to a comprehensive list of DFW-area CEOs and presidents, with 528 respondents completing the survey.

Over the past three years, the SMU Cox CEO Sentiment Survey has captured the ups and downs associated with running an organization in a volatile environment.  In 2007, economic expansion seemed unstoppable.  In 2008, the survey reflected rising pessimism, with CEOs reporting significantly lower expectations for the overall economy and for their respective businesses. This year's results reveal a level of guarded optimism amongst business leaders.  However, it is clear things are not going to return to what they were anytime soon. 

The survey was compiled and conducted by Miguel Quiñones, professor of management and organizations at SMU Cox, and Robert Rasberry, assistant professor of management and organizations. It covered a range of topics: from the state of the economy to the quality of the DFW labor force, from leadership attributes most critical to success to the top competitive challenges CEOs face.   This year's survey also sought to gauge the personal impact of the downturn, in addition to what ethics and sustainability programs companies have implemented.

As part of the survey, participants were asked to nominate their choice for "CEO of the Year" - the top CEO/president currently serving in DFW, based on organizational and DFW community impact. Gary Kelly, chairman, president and CEO of Southwest Airlines was named CEO of the Year.

"Southwest Airlines serves as a prime example how companies are struggling in this downturn," said Quiñones.  "They were negatively impacted by increased costs in a volatile commodities market, while dealing simultaneously with decreased consumption.  It takes a strong leader like Gary Kelly to successfully navigate these waters."

Select findings, at a glance, include the following:


IMPACT OF ECONOMIC DOWNTURN

When asked how the downturn had impacted them personally, 70 percent reported that they had been affected negatively or very negatively, reinforcing the fact that very few escaped unscathed.  Seventy-five percent reported a negative or very negative impact on their organizations. When asked what they thought were the top two causes of the economic meltdown, 43.4 percent of respondents blamed greed as the primary cause for the collapse, followed by poor regulatory oversight, cited by 37.3 percent of respondents. 


ECONOMIC AND BUSINESS OUTLOOK

Regarding their outlook for the world economy, 37.3 percent of respondents expect an improvement, while 26.7 expect a decline.  This exhibits an improvement over last year's results, when expectations of a decline exceeded those for improvement by a 14 percent margin.  The outlook for the U.S. is even more optimistic, with 48.9 percent expecting an improvement. As in years past, respondents were much more optimistic about the prospects for the Dallas/Fort Worth area than about the country as a whole.  An impressive 59.9 percent expect improvement for DFW, and only 14.6 percent expect a decline.

Nevertheless, only 46.4 percent of respondents expect their revenues to increase, and 44.1 percent expect an increase in profits.  Yet only 46.4 percent expect a rise in organizational costs, a decrease in expectations from 76.3 in 2007.  The question remains, what will bring revenue back?  You can't cut your way into revenue and prosperity.  The good news?  CEOs expect staffing levels to remain the same (42.6 percent) or increase (29.3 percent) over the coming year, and employees can expect relatively flat pay. 


RATING THE DALLAS/FORT WORTH AREA

The DFW Metroplex is one of the nation's hottest destinations for corporate relocation.  Survey respondents cited cost of living as the most important factor contributing to quality of life in our community, at 60.8 percent.  However, there is room for improvement by the local government to improve the business climate.  Forty-three percent of respondents cited financial incentives for businesses as their top concern.  And 32.6 percent called upon the need to improve public schools.


LEADING THROUGH TOUGH TIMES

Despite the economy, 76.4 percent of CEOs feel either somewhat or very secure in their jobs, and 87.9 percent report they are somewhat or very satisfied with their jobs.  Their biggest challenge is dealing with the current economic climate, reported at 55.7 percent, followed by domestic competition and dealing with regulation or legal issues.  CEOs cited sound decision-making as the most important attribute required in addressing these challenges, followed by strategic thinking and strong ethics.

For the third year in a row, respondents reported their spouse as their most important confidant at 71.4 percent, and parents are credited for being the biggest influence in helping respondents achieve their professional success.


ETHICS AND SOCIAL RESPONSIBILITY

Despite the erosion of trust in government and big business, only 49.2 percent of respondents have a formal ethics program.  For those companies with ethics programs, 39.2 percent include a code of ethics, 31.4 percent have a statement of values and 28.4 percent either encourage whistle blowing or have anonymous channels of reporting undesired violations. The move towards going green and sustainability has caught on in DFW, with 64 percent of respondents saying it is very important or important to their business. 

"Last year, we reported our findings at the beginning stages of the recession, hoping that the indications DFW would be insulated we received were correct," said Rasberry. "We now have confirmation that DFW has not been hit as hard as the rest of the nation, and this survey confirms that area CEOs are seeing the light at the end of the tunnel."

Comprehensive survey results can be viewed at www.coxceosurvey.org. The results will also be featured in the November/December issue of DCEO.


About SMU Cox

SMU's Cox School of Business offers a full range of business education programs, including BBA, full-time MBA, Professional MBA (PMBA), Executive MBA (EMBA), Master of Science in Management (MSM) and Executive Education. The school also offers a number of unique resources and activities for students, ranging from its Business Leadership Center (BLC), Caruth Institute for Entrepreneurship, Maguire Energy Institute and American Airlines Global Leadership Program (AAGLP) to its Associate Board executive mentoring program and an international alumni network with chapters in more than 20 countries. SMU Cox is ranked among the top business schools nationally and internationally by major publications, including BusinessWeek, The Economist, Financial Times, Forbes, The Wall Street Journal and U.S. News & World Report.