How often are you surprised by the results of a survey?
It usually happens to me when the survey is about an area or topic I think (or I assume) I know something about. A case in point is one of the questions in the Inc. 500 CEO Survey.
The question is “What Could Possibly Hinder Company Growth?” The CEOs were asked to rate 8 factors on a scale of 1 to 5, with a score of 5 indicating the greatest obstacle to growth.
Before I even finished reading the question I was confident that offshore competition was going to be a major factor.
Was I ever wrong! Competition from abroad received the lowest score (1.43) i.e. it ranked 8th out of 8.
Once I saw the other factors I began to understand why it wasn’t number 1. But I didn’t expect Taxes (which scored 2.5) and Government regulations (2.4) to be considered significantly more of a hindrance to growth.
However, I’m getting ahead of myself. Let’s take it from the top.
According to the CEOs of these very successful companies, the biggest factor getting in the way of growth is finding talented workers. (It scored 3.31.)
The obvious question is why that should be the case given the current level of unemployment. And the answer is (I’m going to make another assumption here) what it has always been. There’s a mismatch between the talents that are available and the talents that are required.
Keeping up with demand (with a score of 2.67) came in second. I thought that was interesting given how weak the economic recovery is.
The companies in this year’s Inc. 500 are spread across 25 different industry sectors and so they’re not concentrated in one part of the economy. But they are, by definition, the fastest growing, privately owned companies in those sectors, outpacing the rest of the pack because, presumably, there’s great demand for their products or services.
Factor number 3 was domestic competition (2.55) which came in just ahead of Taxes (2.5). It’s interesting that local competition was also considered a significantly greater threat to growth than offshore competitors.
Steady cash flow (scoring 2.43) ranked fifth and I’ve already mentioned Government regulations (2.4), factor number 6.
The final factor was getting financing, which came in at number 7 with a score of 2.06. The explanation for that may lie in the answer to another question in the survey.
42% of the CEOs said that they had no need for outside funding. And only 4% said they had encountered difficulty in accessing capital to the extent that it had impeded their growth.
I’ve spent the last 15 years working with owner managed companies. And I spent 25 years working my way up the corporate ladder before that. The greatest lesson I’ve learned in that all of that time is that people have a greater impact on growth or success than anything else.
So, while I was surprised by the results for competition from abroad, I’m not in the least surprised that finding talented workers is the biggest factor getting in the way of growth.
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