In a survey of 314 business executives and entrepreneurs[1], most (57 percent) believe that growth is more dependent on their decisions than external factors, 18 percent believe it’s fifty-fifty, and a quarter (26 percent) believe that external factors play a bigger role[2].
Solving for Growth:
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embedded finance, FIS
“[For banks that understand] the market is evolving, there are opportunities to not just support your core retail business, but also to find new ways to grow and delight customers.”
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Every day, business leaders make decisions about how to grow their companies, weighing risks against rewards. These decisions are not made in a vacuum. External factors like the economy, regulatory environment, or the geopolitical climate have an impact. Looking twelve months ahead, business leaders are much more confident about external factors that are closer to home, relating to their industry and company, than they are about more remote issues such as the national or global economy. One of the reasons may be that they feel more knowledgeable about and in control of these areas.
BY FASTCO WORKS
The Risk and Reward Equation
What drives growth: leaders’ decisions vs. external factors
Entrepreneurs[3], who tend to run smaller companies that may be less entangled in large business and regulatory ecosystems and thus less susceptible to external factors, believe that their decisions have a bigger impact than corporate executives do. Eighty-two percent of entrepreneurs believe that the growth of their business is dependent more or equally on their own decision making than external factors, compared to 71 percent of business executives.
Whether making decisions about a career or business, leaders are guided by financial factors. Most consider compensation when deciding about a job (46 percent) and profit when making decisions about business growth (61 percent). It’s worth noting that the incentives vary depending on the type of business leader. For corporate executives, compensation and benefits are the foremost factors driving their career decisions (51 percent), but the top factor for entrepreneurs is making a big impact on the industry (45 percent).
57%
Executive Summary
Gut versus data
Making decisions has become more complex with the emergence of data-driven algorithms whose speed and complexity go beyond the scope of a human brain. Yet, business leaders prefer to lead with their intuition in business decision making (54 percent).
High-growth business leaders[4] typically see themselves as putting more weight on intuition when making business decisions (68 percent for high-growth companies compared to 48 percent for slower- growth companies) and skewing more toward intuition than data. So do entrepreneurs: 72 percent are guided by experience or business intuition when making decisions related to business growth, compared to 49 percent of corporate executives.
High-growth business leaders say they put more weight on intuition
The line between intuition and data-driven insights can become blurry. While high-growth leaders rely more than other business leaders on intuition, most survey respondents reported being more data-focused. Business leaders clearly reinforce their intuition with data-driven insights. In their decision making, business leaders are more likely to go for sure bets (64 percent) displaying a low-risk appetite.
Making decisions is especially difficult in the areas which are simultaneously rich with opportunity and burdened with risk: technology and talent.
The toughest decision
Among all types of decisions that business leaders make, they classify digital transformation—the process of using digital technologies to innovate processes and business models to disrupt industries—as the toughest (50 percent). The importance of getting the digital transformation right cannot be overstated. Technology-driven disruption has led to the creation of new business models while revolutionizing customer expectations, and also creating cybersecurity risks that can damage a company's reputation.
The pressure on technology decisions has skyrocketed with the recent advances in technology, especially machine learning (ML) and artificial intelligence (AI). According to survey respondents, among the top technology risks are moving too slow with new technologies (49 percent) and cybersecurity risks relating to data breaches (44 percent). That’s a decision making conundrum, considering that moving faster may increase the risks relating to cybersecurity.
Entrepreneurs, who are perennial bootstrappers, face a bigger challenge with investment in technology than corporate executives. Fifty percent of entrepreneurs view an inability to show ROI on technology investment as a technology risk, compared to 28 percent of executives.
The biggest opportunity
Success depends on having the right people. The survey found that business leaders consider talent as the biggest opportunity (50 percent) for business growth. Conversely, talent is among the top risks to business growth, with the top risks in the talent category being the inability to attract the right skills (46 percent) followed by compensation trends (40 percent) and not creating the right incentives to increase performance (37 percent).
Talent: Risks and Opportunity for Business Growth
In terms of talent risk, high-growth companies are much more likely to view an inability to attract the right talent as a top risk (59 percent) compared to slower growers (42 percent). This points to an increased recognition of the importance of human potential for achieving growth among the high growers.
Entrepreneurs face the same issue with talent as they do with technology. They have a bigger financial challenge with hiring talent than corporate executives. Half of entrepreneurs in the survey stated that compensation trends are a talent risk to their growth, compared to 39 percent of executives at established companies.
What matters most among business leaders who make major growth decisions, including about talent? It’s about the big-picture approach. The top required characteristic for a business leader is having strategic vision (54 percent), followed by teamwork (49 percent), and ability to execute (49 percent).
The focus on strategy is more intense among entrepreneurs (68 percent) than corporate executives (51 percent), revealing how entrepreneurs are often more directly responsible for guiding the strategic vision of the entire business than other business leaders, who may be focused on a particular function. This focus on strategy is also bigger among high-growth companies (61 percent) than slower growers (52 percent), showing that the road to success starts with setting out the right, long-term course. For more insights and articles from this study, visit Capital One's Learn and Grow content hub.
Solving for
Business Growth:
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The Risk and Reward Equation
The
Equation
believe growth is more dependent on leaders’ decisions
18%
believe each matters equally
26%
believe growth is more dependent on external factors
49%
44%
Moving too slow with new technologies
Cybersecurity risks related to data breaches
Top Tech Risks, According to Leaders
68%
high-growth business leaders
48%
slower-growth companies
50%
Talent is the biggest business growth opportunity
46%
Inability to attract the right skills is a top risk
40%
Compensation trends are a top risk
37%
Not creating the right incentives to increase performance is a top risk
Business leaders believe:
[1] Based on a survey of 314 business leaders conducted by Inc. in the 4th quarter of 2024. The survey comprised entrepreneurs and executives from multiple industries and company sizes.
[3] 60 of the survey respondents identified themselves as entrepreneurs and 142 as corporate executives.
[4] High-growth companies had revenue growth of 10 percent or more during the last twelve months. They represented 27 percent of respondents. Slow-growth companies had falling or flat revenues (up to 10 percent growth) during the last twelve months. They represented 73 percent of respondents.
The risk and reward equation
[2] Percentages may not add up to 100% due to rounding.