C-Suite executives Looking more to the challenges of longer-term disruptions for consumers, employeesIn the new 2022 Milken Institute-Harris Poll Listening Project Survey business leaders expressed optimism in their own company’s future financial performance and in the strength of the U.S. economy.
May 02, 2022 — LOS ANGELES–(BUSINESS WIRE)–At the Milken Institute Global Conference today, the Milken Institute and The Harris Poll released findings from their third annual Listening Project, in which, despite widespread geopolitical and global market volatility, business leaders expressed optimism in their own company’s future financial performance and in the strength of the U.S. economy.
The Listening Project’s peer-to-peer survey of Milken Institute Global Conference participants, comprised of Fortune 500 executives, founders, investors, innovators, and other experts, reveals nearly two-thirds (63%) are optimistic about their company’s future financial performance. And 68% describe the U.S. economy as ‘strong,’ even as two-thirds (67%) feel the global economy is ‘weak.’
Resiliency, And The Ability To Bounce Back
“The one trait which the best leaders demonstrated most through the pandemic was resiliency, that ability to bounce back up and lead through uncertainty,” said Richard Ditizio, president of the Milken Institute. “The optimism evidenced by the global business community charts a refreshing new chapter as we climb out of the pandemic, having learned much about our workplaces, our stakeholders and ourselves. Despite navigating the current headwinds of inflation, supply chain issues, and rising interest rates, leaders are still focused on progress in their businesses and society overall.”
The surprise findings signal confidence in a resilient economy at a time when businesses worldwide continue to face supply chain constraints, labor shortages, rising consumer prices and interest rates, all of which have shaken investors and sent markets tumbling over the past quarter. Yet, the Listening Project findings suggest that while Americans overall remain worried, conference participants are already seeing past current volatility: Among the issues significantly impacting their business operations today, 43% of respondents cite inflation; however, only one in ten (11%) feel inflation will get even higher than today (v. nearly half [43%] of American consumers). Additionally, one-third (33%) believe today’s rising inflation “will taper off,” twice the level of optimism compared to the 17% of consumers.
And while the markets have reacted negatively to rising interest rates, the surveyed conference participants have a resilient mindset and faith in a swift and robust business rebound. This may be partly attributed to their trust in banks, big business, and the presidency (69%, 58%, 55%, respectively). In fact, most respondents (57%) are confident that their operations could quickly get back to ‘business as usual’ in less than three months when inflation halts (82% within six months). The same is true of labor shortages, where 45% cite near complete business recovery within three months, and 71% within six months. As such, most businesses are not over course-correcting to today’s volatility: Nearly seven-in-ten (69%) report that their companies are not adjusting their outsourcing strategy, resources, or operations in response to their current supply chain challenges.
Near Term Pain… Long Term Gain
“Business leaders see near term pain, but long-term gain. To a large extent they have already priced in a volatile economy and are moving past it to capitalize on underlying disruptive forces that they feel will have an even-greater impact on their long-term competitive advantage,” says John Gerzema, CEO of The Harris Poll. “These include changing demographic and social attitudes emerging post-COVID which add urgency to business leadership on topics ranging from climate change to hybrid-working.”
Indeed, the survey findings from The Milken Institute-Harris Poll Listening Project reveal a new strategic outlook for business where near term turbulence cannot cloud major structural forces in society that pose as both catalysts and challenges. Three major disruptors reshaping consumption, corporate and brand reputation, and the future of work cited by survey respondents were diversity and equity & inclusion (DEI); environmental, social and governance measures and investing (ESG); and changing generational values.
New Generational Values and Hybrid Working:
- Three-quarters of participants (76%) believe that changing generational values will have an impact on their business operations, with close to a third (30%) predicting it will have a lot of impact
- Close to two-thirds (63%) believe that hybrid and remote work will also impact their business operations.
- While nearly eight in ten (77%) would prefer to have their employees work in a hybrid environment (v. 15% office, 8% remote), a recent Harris Poll survey found that American workers are split in their preferences (32% hybrid, 29% office, 39% remote).
Diversity, Equity & Inclusion:
- Three-quarters of participants report their companies are prioritizing DEI progress, with both internal (75%, high priority: 50%) and external (69%, high priority: 35%) initiatives.
- Two-thirds report their organizations have implemented new DEI initiatives within the last year. Four in ten (39%) have implemented a “few” and a quarter (28%) adopted “many.”
- Additionally, while 34% have not implemented any new initiatives in the last year, 19% already had initiatives in place.
Environmental, Social & Governance Investing
- Three-quarters (74%) share that their companies are prioritizing ESG investments, with more than four in ten (43%) characterizing ESG as a high priority.
- Half of the participants surveyed report that their company has as much as a quarter of their portfolio dedicated to ESG investments (51%), while close to a fifth report that more than a quarter of their company’s portfolio are ESG investments (17%). Only a third report a lack of ESG investments entirely (32%).
- Of those with ESG investments, close to half have even created their own metrics and frameworks to evaluate the efficacy of their ESG investments (43%), a fifth utilize external measures to track efficacy (22%), and the remaining third (35%) have no formalized evaluation metrics.
Leaders surveyed are largely moving forward from today’s malaise: In fact, only 4% believed that “COVID-19 will be eventually eradicated” vs. 96% who felt that COVID is “now a part of daily life and will last in some form.” And business has the global respect to do so: Just last October, 60% of global citizens told us “Companies have been more reliable than the government in keeping my country running during COVID.”