During the next week, Vistage member CEOs will do as they have done every quarter since 2003. They will answer specific questions that reflect their level of confidence in the overall U.S. economy and in their own businesses. The Vistage CEO Confidence Index has not only become a foremost barometer of how our nation’s small business leaders feel about the economy, but the results have also been recognized as a reliable two-quarter predictor of the trend in our nation’s gross domestic product (GDP). So for example, if Vistage CEO Confidence increases, then it harbingers an increase in the GDP two quarters later. University of Michigan’s Dr. Richard Curtin has analyzed the data and substantiated its predictive qualities, which of course further enhances the value of the Vistage Confidence survey. Dr. Curtin, whose Consumer Sentiment Surveys are an official component of the Index of Leading Economic Indicators, has directed the Vistage CEO Confidence Index since its inception.
That said, it’s hard for me to recall a period when uncertainty about so much was so high. From my personal perspective, it isn’t about uncertainty; it’s about uncertainties. Uncertainty about overall economic growth; uncertainty about taxes; and uncertainty about who will prevail in the mid-term elections and how the results will impact our country’s direction starting in January.
Most of us would rather receive either good news or bad news, than be left to wonder. The uncertainty triad (economy, taxes, and elections) has left us, both as individuals and as leaders, in a bit of a holding pattern. Policy differences and politics aside, it’s no wonder we have an anemic economy and a cautious business environment. Unfortunately, that impedes risk-taking, innovation and, ultimately, growth.
Professor David Garvin says Harvard Business School works to provide its graduates with the courage to act in times of uncertainty. This is precisely what Vistage members will tell you that they develop through their engagement with fellow members, Vistage Chairs, and other components of the Vistage experience. With this in mind, I admire and applaud the Vistage member CEOs who have done more with less (less capital, fewer employees, less consumer spending) and who have prepared their companies to innovate and grow in the months and years ahead, despite the uncertainties. Though they have confidence in their own businesses and in the things they can control, it will be interesting to learn and share how these uncertainties will influence their outlooks and preferences.
One thing is certain: We’ll find out exactly how they feel when we release the third quarter Vistage CEO Confidence Index results on Monday, October 4th.