Anemic Economy Not Slowing Executive Strategies

ByPeter Strozniak Although executives see the weak economy as their No. 1 business issue over the next 12 months, they are forging ahead with strategies to help their companies grow, according to a survey conducted by PricewaterhouseCoopers, a New York-based management-consulting firm. The economy was cited by 24% of the 427 CEOs surveyed as their most important issue. But 19% of CEOs said marketing and sales (new product development, customer service, and advertising) would be their No. 1 priority over the next year. Lending credence to the survey findings, Sonic Solutions, a Novato, Calif.-based software manufacturer, recently introduced a new product, MyDVD, that allows consumers to transfer home videos to a DVD format. "The economy is important but it's not the biggest factor in what is going to write the story for us in 2001," says Sonic Solutions President Robert J. Doris, a former top executive of Lucasfilm Ltd., which produced the Star Wars and Indiana Jones trilogies. "If this new application area is successful it may not be as big as it would have been had the economy been vibrant, but it will be going from zero to something as opposed to just incremental growth." Richard H. Rosenbloom, president and CEO of Rochester, N.Y.-based Ameritherm Inc. says the weak economy is not slowing his marketing or product development plans. "You do what you have to do, but I wish I could say the same for other companies, particularly larger companies," says Rosenbloom. "We had a research and development contract with a major corporation and it got canned. I think the economy is seeing a lot of that where corporations are basically worried about today's earnings and are delaying programs." Ameritherm, which manufactures induction-heating equipment used in scientific and industrial applications for precision heating, is posting a good year mainly because of strong backlog orders. The survey also showed that 18% of CEOs cited managing growth as their most important issue over the next 12 months, while 15% said taking care of company financials including capital, profit margins, and wages, would be their top concern. Another 12% of CEOs said internal management (productivity, pricing, information technology, and the Internet) would be their most important issue to face over the next 12 months. Only 10% of CEOs said hiring skilled workers would be their top priority. The PricewaterhouseCoopers survey, conducted during the second quarter, was developed and compiled with BSI Global Research Inc., an opinion and economic research firm based in Norwood, N.J.