When Dallas Mayor Mike Rawlings was sworn in on a hot summer day in June 2011, he echoed the views expressed by respondents to our annual SMU Cox CEO Sentiment Survey. In his address, Rawlings spoke of the immense opportunities that our area provides, which propelled him from a newcomer to the city with just $200 in his pocket to CEO of a major U.S. corporation—and, now, mayor of one of the country’s largest cities. It is this overpowering sense of possibility and optimism in the Dallas-Fort Worth area that has shone through in our analyses even through the darkest period of the great recession.

More recently, the Texas economy has been under a microscope, ever since Gov. Rick Perry entered the presidential race touting the “Texas Miracle.” USA Today featured a cover story that proclaimed, “Need a Job? Move to Texas.” In fact, during the two-year recession, the state added 262,00 jobs, or half the nation’s 524,000 payroll gains. The DFW area continues to be a large contributor to this growth. During the last decade, the population has increased dramatically. The headquarters of 24 Fortune 500 companies in the area, and multiple new corporate relocations, have strengthened the economic development outlook. DFW is ranked fourth nationally for adding jobs in the past year. What’s more, Dallas is ranked fifth out of 65 metro areas for the best place for young adults to start a career.

This juxtaposition of a relatively strong local economy within a faltering national or even global economy was our inspiration for the title, “An Island of Optimism,” which we used to sum up the results of our survey a couple of years back. However, last year we wondered if the light at the end of the tunnel we had detected in the previous year’s survey was really a fast-approaching train. With another year to evaluate the strength of the recovery, we were eager to see how this year’s respondents felt about the economy, their businesses, and the challenges they faced leading small and large companies through the current climate of uncertainty.

We developed the SMU Cox CEO Sentiment Survey to put our finger on the pulse of our area’s business leaders in order to gauge their outlook over the coming 12 months. This time around we also decided to ask our respondents how their businesses fared last year. What we found was that, in spite of a very difficult business environment, 37 percent of CEOs reported meeting their business objectives, while another 30.2 percent exceeded them. This included meeting or exceeding their objectives in terms of profitability (61.9 percent), growth (63.8 percent), and revenue (67.5 percent). These results are a testament to the resilience and dynamism of our region’s economy, as well as the dedication and skill of the leaders and employees of the organizations in our sample of respondents.



With all the bad news coming out of the euro zone, it is not surprising that our CEOs were pretty pessimistic about the prospects for the world economy. In fact, our results revealed the worst outlook we have ever recorded, with 59.5 percent of respondents expecting a decline in the world economy over the next 12 months (compared with 31.3 percent a year ago), 29 percent expecting no change, and only 7.6 percent believing that things will improve (a year ago, 29.6 percent expected an improvement). Of course, a slowdown in the world economy will dampen growth here at home through a decline in our exports.

The outlook for the U.S .economy was a little better, but still at record low levels. Of our respondents, a record 40 percent of DFW-area CEOs expect the U.S. economy to decline next year (compared to 31 percent last year). This number is higher than what we recorded during the depths of the recession in 2008. Only 13.6 percent expect economic conditions to improve in the U.S., a record low and well below the 33 percent who expected improvement last year. The only consolation was that a plurality of respondents, 44.8 percent, expect the U.S. economy to remain the same over the next 12 months. Of course, the same is not exactly good, given the high level of unemployment and anemic levels of growth we have seen over the past couple of years.

Our previous surveys have always revealed a more upbeat outlook for the economy in the DFW area among CEOs when compared to the world or the U.S., and that was the case again this year. Of our respondents, 42 percent expect our region’s economy to improve (the lowest level we have recorded and down from 57.3 percent last year), a plurality or 46.9 percent expect conditions to remain the same, and only 9.5 percent expect a deterioration.

In all, this year’s respondents see dark clouds gathering over the economic landscape. If one looks at the results of our survey since we began collecting data in 2007, one can’t help but feeling like we are riding a roller coaster. Unfortunately, we are currently on the steepest downward trajectory after experiencing a slight upturn following the plunge in 2008. We all better hang on tightly for the ride.


Given the relatively gloomy outlook for the economy, one would think that CEOs would expect their businesses to suffer. While it is true that 67 percent of our respondents see their costs going up over the next 12 months, a vast majority (62.3 percent) also expects their revenue to increase. This is a higher percentage than last year (57.5 percent) and substantially higher than the low recorded in 2009 when only 46.4 percent expected their revenues to go up. The net result is that 49.9 percent of respondents anticipate increases in overall profitability. This represents an improvement from last year’s 47.6 percent, but is still short of our all-time high of 62 percent recorded in 2007. It must be said, however, that a substantial number (27.2 percent) expect their profits to decrease over the coming year. 

There is also positive news when one considers other aspects of organizational health and vitality. For example, most respondents expect to either maintain (51.5 percent) or increase (25.9 percent) their training budgets. Few (16.6 percent) expect decreases in their staffing levels, while a substantial 34 percent will be adding to their payrolls. Also, in spite of national trends showing a decrease in household wages over the past 10 years, our respondents expect wages in their organizations to either remain flat (46.7 percent) or actually increase (46.7 percent) over the coming 12 months. Finally, CEOs are still reinvesting in their businesses, with 44.5 percent expecting to maintain their current levels of capital expenditures and another 30.1 percent seeking increases.

It is in our solidly thriving community that 55.5 percent of our leaders believe the best growth opportunity exists for their companies next year. In fact, 43.9 percent of our respondents indicated that more than 75 percent of their sales come from the DFW area. Yet when we ask them how they would rate the overall quality of the DFW workforce, 57.6 percent listed it as only “adequate.” When asked what local political leaders can do to improve the business environment in our region, two major factors zoomed to the top of the list: increasing financial incentives for businesses (45.6 percent), and improving public school education (24.8 percent).

Rawlings, the Dallas mayor, must have heard that same concern while campaigning. In his initial days in office he pledged to rapidly improve the new business development approval and permit process, and to create an “army of volunteers” and “private-sector donors” who will support needed changes in the Dallas Independent School District. Although both pledges can produce the desired changes, the ability to make it happen could prove difficult, since the slow economy contributes to reduced city funding and staffing. However, his work as the Dallas “Homeless Czar” showed his ability to succeed with a “can-do” attitude.Given that the DFW area is a prime location for business success, we asked the leaders what contributed most to the overall “Quality of Life” in the area. The answers paralleled those of previous years. Cost of living was at the top of the list (56.5 percent), followed by quality of travel and transportation (13.6 percent), and entertainment opportunities, along with weather and climate (7.2 percent each).  Although lack of a state income tax and cheaper real estate prices are a natural cost of living draw, the central location and ease of travel to other parts of the nation and world are prime in the business traveler’s mind. Improved international connections, and DART rail expansion to DFW and Love Field, should raise the travel percentage.


Quality entertainment was surely not missing in DFW during 2011. The World Series bid of the Texas Rangers, the Super Bowl, and the NBA Title for the Dallas Mavericks fed the avid sports enthusiast. Currently more than a dozen quality-of-life construction projects are taking place in Dallas. Among these are: downtown parks, the George W. Bush Presidential Center, the new Natural History Museum, the Trinity River Nature Center, and expansions of the Dallas Zoo and Arboretum.

As American jobs and earnings continued to decrease, and consumer spending also started to decline, mid-year issues with the country’s credit rating and debt ceiling brought the question of leadership to the forefront of the national political debate. We were interested in knowing how these issues would impact the job security of the DFW CEOs. While the nation and world are exploring a path for the difficult and uncertain times, the DFW area leaders displayed a high level of optimism and confidence. When asked how secure and satisfied they felt about their job, 75.9 percent indicated they were either somewhat or very secure. These results have stayed consistent over the list five years. Tough times and tough decisions can produce high levels of dissatisfaction in the workplace. Overall, our leaders continued to carry a high level of job satisfaction (80.1 percent), with only a drop of 5 percent off last year’s “very satisfied” numbers.


Knowing that the current hard times produce difficult challenges that our CEOs must master, we sought to identify some of those challenges, and to discern the characteristics needed to create success. We first asked our leaders to evaluate the quality of leadership that existed in their organizations. A strong 74.4 percent declared that the current leadership depth was either good or excellent.

Sampling the leadership characteristics our CEOs believe are necessary for success, we found the following attributes at the top of the answers: sound decision-making (59.2 percent), strong ethical behavior (56.4 percent), strategic thinking (43.3 percent), and being a good judge of people (29.1 percent).

Good leaders always have personal indicators that give them a reading of how successful they are in leading others. For our leaders the success of the company was the top measuring standard used by 76.6 percent, while 64 percent declared that it was perceiving one’s impact on the lives of employees and customers, and 40.4 percent believed it was revealed in the amount of time spend with those you love.

Good leaders also have confidants with whom they can be totally transparent. When asked whom they rely upon as a sounding board, we found 70 percent listed their spouse, 47.2 percent said “a friend,” and 32.8 percent went to the chief financial officer.


Finally, most leaders attribute the help of a significant person to their successful ascent. When we asked who that person was, we received the following response: parent (32.1 percent), spouse (26.8 percent), and professional mentor (16.4 percent).

Our results mirror those of the previous four annual surveys in that CEO sentiment for our region’s economy was much more positive than that of the U.S. and the world as a whole. However, one distinct difference is that the overall level of sentiment is the most negative to date. Paradoxically, most CEOs have seen their businesses meet or exceed their business objectives and are optimistic about the future profitability of their companies. Perhaps what they are telling us is that they feel good about the things they know (their businesses) but have more doubts about those they don’t. This brings us full circle back to the word “uncertainty.” The extent to which this uncertainty is real or imagined remains to be seen.