CEO Insights for What's Ahead | 8.31.22
The Conference Board Consumer Confidence Index® improved in August to 103.2 (1985=100), up from 95.3 in July. Both consumers’ view of current conditions and their 6-month expectations for business conditions, jobs, and finances improved.
Why It Matters Consumer confidence rebounded in August after three consecutive monthly declines. The Present Situation Index recorded a gain for the first time since March. The Expectations Index likewise improved from July’s 9-year low, but remains below a reading of 80, suggesting recession risks continue. Concerns about inflation continued their retreat but remained elevated. Meanwhile, purchasing intentions for homes, autos, and major appliances increased after a July pullback, and vacation intentions reached an 8-month high.
Looking ahead, August’s improvement in confidence may help support spending, but inflation and additional rate hikes still pose risks to economic growth in the short term.
A global pandemic, the collapse of global supply chains, Russia’s war on Ukraine, and a forthcoming recession. Recent years have placed extraordinary demands on business executives to lead amid vast uncertainty and disruption.
In an interview, Chris Kempczinski, President and CEO of McDonald’s, discussed the company-wide framework he implemented to provide guidance to stakeholders amid COVID-19. A key component was the commitment he made to franchisees and suppliers that the company would keep their business afloat during this turbulent time. The conversation was moderated by Dr. Lori Esposito Murray, President of the Committee for Economic Development, the public policy center of The Conference Board (CED).
Why It Matters As Kempczinski pointed out, quelling the fear that the company’s suppliers and franchisees may lose their businesses enabled stakeholders to think more rationally and constructively about the future instead of getting bogged down by the present. Additionally, Kempczinski’s doubling down on principles amid the crisis enabled McDonald’s to prioritize its biggest challenges while ensuring consistency in its approach, giving the organization clarity despite vast uncertainty.
Chris Kempczinski is a 2022 CED Distinguished Leadership Awards recipient.
A recent survey of US workers by The Conference Board Human Capital Center found that the top concerns about a looming recession vary by generation:
Making Sense of the Generational Divide “Different generations have different priorities,” said Robin Erickson, PhD, Vice President of Human Capital at The Conference Board. “As Baby Boomers near retirement, they are keeping a close eye on the stock market and their 401ks. Millennials, on the other hand, are earlier in career and thus less established, and understandably fear job loss more.”
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In trying to understand—and address—racism globally, US business leaders should be mindful that discrimination often reflects a complex set of biases based on ethnicity, nationality, religion, language, and social class, shaped by the historic interaction among different overlapping groups. US-headquartered companies typically structure their operations based on region or nation, such as EMEA (Europe, Middle East, and Africa) and Asia-Pacific.
To address racism on a global scale, however, companies will need to think more locally, understand the resistance to acknowledging various forms of racism, and recognize the historical underpinnings of the relationships between different demographic groups.
Why It Matters In 2020, many US CEOs made commitments to address racism not only in the US, but around the globe. Putting those commitments into action will require that leaders take the time to understand the multifaceted nature of discrimination and develop a shared terminology that is applicable beyond the US context.
A clear majority of US consumers see an urgent need for everyone to change their energy consumption to avert an energy crisis. Yet, about half feel underinformed as to how to save energy. Younger, non-White, and higher-income consumers are most likely to report not feeling well informed, but other demographics might also benefit from additional education.
Why It Matters Evidently, there is an important need for comprehensive energy education, including on the potential money savings associated with changes in energy consumption. This doesn’t just have to be the task of the traditional “energy educators” such as utility companies, the government, and environmental organizations. Instead, any business can serve as a role model for prudent energy use through its own behaviors and operations while educating customers and employees. Such education could not just inform how new energy habits can save people money, but also how they can save the environment.
QUOTABLE
"Corporations need to have a strategy in place that says, this is how we're going to create value. Value for the shareholders, but also value for employees or customers, as well as our community. And do it in a way that's ethical and legal within that environment. You put all those things together, then your company should perform well. You don't have to worry about activists engaging with you."
— BERNARD BAILEY, Chairman of Authentix Corporation, in a new episode of CEO Perspectives on shareholder activism.
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