CEOs
of Fast Growing Technology Companies Share Thoughts on What it
Takes to Succeed
By
Deloitte & Touche's Technology, Media & Telecommunications
Group
The CEO Survey,
conducted by Deloitte & Touche's Technology, Media & Telecommunications
Group, asks leaders of the fastest growing technology companies
in the greater Los Angeles area (ranked by Deloitte, based on
fiscal year revenue growth over a five-year period) to weigh in
on what factors and challenges had the greatest impact on their
success, as well as their outlook on the economy and their business.
The results are a fascinating look into the minds of some of today's
most innovative business leaders.
As the economy
starts to show signs of recovery, CEOs are returning to a level
of optimism which was last seen a few years ago. Rather than focusing
on further reductions and ways to manage their cash flow, CEOs
are turning their sights towards strategies to grow their businesses
again.
With an eye
on growth, CEOs view "growing sales" as the biggest
financial challenge to keep their companies on course, over "managing
cash" and "raising capital". CEOs are highly focused
on new product development in the existing market, entry into
new markets with new products, and increased market share - these
are considered the top three sources of growth in the future.
Growth strategies
are dependent on more than good products and a smart marketing
campaign. It also takes a talented and engaged workforce. The
appreciation for this reality can be seen in the fact that "managing
expectations" and "developing leaders" topped the
list of personal challenges faced by CEOs.
While most
CEOs attribute their personal success to "sheer determination",
they are also largely aware of the impact that "high-quality
employees" have on their company growth and success. CEOs
are focused on human capital issues and utilize benefits/healthcare,
stock options, flexible work hours, and incentive programs as
the primary means to attract and retain employees.
Not many CEOs
consider an initial public offering a likely scenario for their
company in the next twelve months, however more than half of the
respondents indicated that an IPO is realistic in "two or
more years." For now, CEOs are looking to develop strategic
partnerships. Nearly an equal amount are planning on conducting
"business as usual."
The majority
of CEOs, 64% of the respondents, are "extremely confident"
that their company will sustain its high level of growth over
the next twelve months. CEOs believe that global terrorism and
internet security are the biggest threat to economic recovery
over the next twelve months, and 33% of all CEOs surveyed would
prescribe a reduction in corporate and individual taxes as a means
to stimulate economic growth. As far as financing their own growth
in the future, more than half of the respondents indicated that
financing would be handled "internally through cash flow."
The CEOs surveyed
were recognized for their leadership which contributed to their
company's growth and its ranking by Deloitte & Touche as one
of the "fastest growing companies" in the greater Los
Angeles area. But with rapid growth comes operational challenges.
When asked about their biggest operational challenge, about 30%
said "developing a strong marketing and sales strategy"
and another 22% said "finding, hiring and retaining qualified
employees."
Although the
software market has been favored the past few years, wireless
jumped to the number one industry segment in terms of growth potential
for both the next 12 months. Life sciences maintained its number
two position.
Many CEOs
are looking at North America as a geographic market with significant
growth potential for their company in the next five years.
For more information
about Deloitte's Technology Fast 50 Program or how to submit your
nomination, please contact Tim Lovoy (email: tlovoy@deloitte.com),
audit partner with the Technology, Media & Telecommunications
Group.
Methodology:
Results based on a survey of CEOs from companies recently recognized
by Deloitte & Touche as one of the fastest growing technology
companies in the greater Los Angeles area, based on fiscal year
revenue growth from 1999-2003. The survey was conducted in the
summer of 2004. For a copy of the survey findings, please contact
Yi-Fang Kryger at (213) 553-1944. About Deloitte's Technology,
Media & Telecommunications (TMT) Group The TMT Group is composed
of service professionals who have a wealth of experience serving
technology, media and telecommunications companies throughout
the world
About Deloitte's
Technology, Media & Telecommunications (TMT) Group
The TMT Group is composed of service professionals who have a
wealth of experience serving technology, media and telecommunications
companies throughout the world in areas including cable, communications
providers, computers and peripherals, entertainment, media and
publishing, networking, semiconductors, software, wireless, and
related industries. These specialists understand the challenges
that these companies face throughout all stages of their business
growth cycle and are committed to helping them succeed. Deloitte
is a leader in providing strategic, financial and operational
assistance to its technology, media and telecommunications clients.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a
Swiss Verein, its member firms and their respective subsidiaries
and affiliates. As a Swiss Verein (association), neither Deloitte
Touche Tohmatsu nor any of its member firms has any liability
for each other's acts or omissions. Each of the member firms is
a separate and independent legal entity operating under the names
"Deloitte," "Deloitte & Touche," "Deloitte
Touche Tohmatsu," or other related names. Services are provided
by the member firms or their subsidiaries or affiliates and not
by the Deloitte Touche Tohmatsu Verein.
Deloitte &
Touche USA LLP is the U.S. member firm of Deloitte Touche Tohmatsu.
In the U.S., services are provided by the subsidiaries of Deloitte
& Touche USA LLP (Deloitte & Touche LLP, Deloitte Consulting
LLP, Deloitte Tax LLP, and their subsidiaries), and not by Deloitte
& Touche USA LLP.
