Contact: Shelly Peng
Deloitte
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New York, October 20, 2003 — What’s going on here? While 79 percent of chief operating officers in the U.S. expect the country’s economy to improve over the next year, only five percent of their Japanese counterparts feel that way about their own country’s business outlook. And as Japanese COOs worry most about the economy, their German equals express most concern about their country’s political environment. Meanwhile, COOs outside the U.S. say the U.S. political environment worries them the most.
Those are some of the findings of a Deloitte global survey of more than 600 chief operating officers in 16 countries worldwide. The largest of its kind, the survey conducted by Deloitte finds a surprising degree of differences among global COOs by region on issues involving the economy, geopolitics, and their own jobs.
Deloitte also launched today its COO Confidence Index, which rates the "stress levels" of COOs. The initial composite score of 62 from a scale of 1-100 suggests "high concern" by COOs, but in Japan the index scored 72 compared to the 58 index of U.S. COOs. Elsewhere, the index scores Australia, 59; Canada, 61; United Kingdom, 65, and Germany, 67.
"The poor economic conditions in Japan and Germany have led their COOs to be the most negative about political and economic developments," says Carl Steidtmann, Deloitte’s Chief Economist. "And except for Japan, a solid majority of COOs believe their companies will post improved performance over the next year. In Japan, 45 percent anticipate improvement."
Links to more information about this survey, and a summary of key results
For the U.S. perspective on this survey and the viepoint of Deloitte's U.S. Chief Executive Officer Jim Quigley, please read the U.S. press release. Learn more from our Fact Sheet, or read the summary of key survey results in the PDF file attachment at the bottom of this page. Some of the more significant findings include:
Japanese COOs see further pricing woes ahead. Japanese COOs are most pessimistic about their pricing abilities over the next 12 months, with 38 percent anticipating they will have to lower prices, followed by 30 percent of UK execs. One in three Australian executives expect to post higher prices, as do 28 percent of their U.S. counterparts.
COOs look to current customers for revenue growth. At least 90 percent of the COOs in every country surveyed except Germany consider the retention of existing customers to be the single biggest source of revenue growth; the percentage is 70 percent in Germany. And Japanese execs particularly view the development of new products as a revenue-growth source.
Germans COOs worry about global recession, financial-market health. Of eight major issues, 42 percent of German COOs are highly concerned about a global economic recession, a sentiment shared by only 16 percent of their counterparts in the U.S., UK and Australia. Nearly one-third of Japanese and German COOs express deep worries about the health of the financial markets as opposed to only 11 percent of their U.S. equals.
Japanese are champions of outsourcing. Sixty percent of Japanese COOs expect to outsource more over the next year, while 22 percent of German executives anticipate outsourcing less.
U.S. COOs worry less about terrorism than counterparts in UK, Japan, Canada. One in four COOs in Japan and Germany is anxious about an energy crisis, while a similar percentage in the UK, Japan and Canada fear terrorist attacks. Only 11 percent of U.S. COOs express great uncertainty over terrorist attacks. One in five COOs in Japan and Germany worry deeply about armed conflict.
COOs list their chief sources of uncertainty. Of the top five sources of uncertainty, the Japanese consider global uncertainty and the environment as top concerns, while COOs in the United Kingdom and Canada rank government policies as their highest concern. More U.S. execs list the national and international economic and political situation as a key concern while their counterparts in the UK, Australia and Canada rank customers’ demands highly as a worry.
COOs differ geographically on the top issue they must cope with. Of the top five issues COOs cope with, Japanese execs most list corporate strategy, Canadians rank accounts management as the leading issue, and UK execs rate organizational and management control as top. More U.S. and German COOs list cost reductions and improvements than their counterparts, while German and Australian COOs rank “employee performance” as a higher priority than their counterparts elsewhere.
Work overload stresses out many German COOs. COOs in Germany (44 percent), the UK (34 percent) and Canada (29 percent) find work overload to be the major cause of work stress, while more U.S. COOs list "meeting deadlines" as their chief stress inducer. Twenty-two percent of Australian execs experience the most stress managing people.
Cooperation reigns among North American COOs, senior management. Four of five North American COOs describe as "cooperative" their relationship with senior management, compared with 68 percent in Europe and 63 percent in the Asian-Pacific region.
The survey respondents represent a broad range of industries, including financial services, retail, manufacturing, health care/pharmaceutical, energy/utilities and telecommunications. Thirty percent of the executives represent companies with annual revenues of more than US$1 billion. Research International conducted the survey this summer on behalf of Deloitte.
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