American and Canadian business leaders often differ in the way they perceive the state of the economy – much more so than the residents south of the 49th parallel realize or care to admit. The results from a recent Deloitte & Touche Technology Fast 500 CEO survey demonstrates this difference. Canadian Fast 500 CEOs seem to have a more optimistic outlook of the economic environment in which they work when compared to their American counterparts.
Of the 200 plus CEOs (U.S. and Canada) who responded, 32 per cent said acquiring another company is in the cards in the next 12 months while 40 per cent of the Canadian CEOs said they were looking into acquiring another company in the coming year. Since the 32 per cent includes the Canadian respondents (12 per cent of the total), the numbers for the U.S. are actually lower.
Also according to the survey results, one-third of the Canadian CEOs expect to proceed with an IPO (initial public offering) this year compared to less than ten per cent of the Americans.
Almost two-thirds of the CEOs said they plan on adding 25 to 100 employees this year as opposed to about half of the American CEOs.
The question is: why? Traditionally, Canadians are less optimistic about the economy than the go-for-broke folks to the south. Yet today things are different, especially for fast growing technology companies. Something about the higher you go the farther you fall.
“I wasn’t too surprised by [the results],” said Aris Kaplanis, survey participant and CEO of Teranet Inc. in Toronto.
“We never had the dot-com zaniness to the same degree as they had in the U.S…and as a result we didn’t have this great big spike, so our decline isn’t quite as quick, we don’t feel it as much,” he explained.
Nigel Stokes, CEO of DataMirror Corp. in Markham, Ont., agreed with Kaplanis.
“Perhaps the roller coaster wasn’t quite a steep in either direction in Canada,” he said. “We didn’t get obviously to the same high and I don’t think we have gotten to quite the same low.
“So the tech firms in Canada are a bit more resilient, they are a bit more optimistic, we can see some recovery signs where as I guess if you are very high up it is a long way to fall,” he added.
Kaplanis said the incredible size of the U.S. market may have given companies a false sense of potential. The idea was to get a large percentage of 300 million affluent U.S. consumers on board. Get enough customers and the sailing would be smooth. But alas, the numbers and business plans didn’t add to long term growth.
“[There were] a lot of false conclusions and that is evident by the dot-com bust. I mean all these guys did all of these business plans on the back of an envelop and drove these numbers based upon the multiplicative (of 300 million customers),” he said.
“[You] couldn’t possibly deliver, get the people.” Kaplanis explained.
“And the next thing you know you are all toast,” he added.
upside to a downturn
If your company is planning on growing and adding employees, and all spoken to said this was the case, having thousands of qualified employees now available can be a blessing – the silver lining to a dark cloud.
“[The downturn] has actually made a very significant difference, we are able to attract some very impressive candidates right now,” Stokes said.
He added that a lot of what he termed “long term steady employees” wouldn’t have been available earlier. “[They would] either be picked up by larger corporations or not left the company they were with,” he explained.
Ken Wawrew, president of Image Processing Systems Inc. in Markham, Ont., doesn’t quite agree.
“Typically the ones who are laid off aren’t the ones you are after,” he said.
But both agreed employees are more leery about where they go and far less na