The insider view: New York
Confidence is returning to North America, with M&A and IPO activity, house prices and consumer spending all on the increase, reports Tom Morris FCMA, CGMA, finance vice-president at Morgan Stanley.
The first quarter produced some disappointing economic data owing to the exceptionally cold winter in the US, says Morris, a British expat based in New York. But this is likely to be a temporary blip and the Federal Reserve’s stimulus package is expected to continue. “The US is a good place to be doing business,” he stresses.
James Goad ACMA, CGMA, associate vice-president and CFO of distribution, global employee benefits, at insurer Met Life, is another émigré from the UK. He observes that the US is faring well compared with most economies in the EU, but adds that New York City is outperforming most of the country.
“Much like any other major financial centre, it is often the quickest place to bounce back, especially given the type of industries that call New York City their home, such as financial services, media, marketing and high-end retail, which have recovered better than other sectors,” Goad says. “If you go outside the city, you can still see struggling retailers and manufacturers – and unemployment in certain US states is certainly still high, although not as bad as it is in Spain or Greece, for example.”
“New Yorkers have a reputation for being demanding and sometimes abrupt, but I find that isn’t particularly true in my workplace – although the experience is quite different for those who work on the front line in catering or hospitality here,” Goad says.
Morris thinks that New York City is an “incredible” place to work. “Our corporate headquarters is on Times Square, which is always bustling with business professionals and tourists – everyone is in a rush. Those who work here often learn that you need to make an impact in order to be noticed. As an outsider, I have found that you don’t necessarily have to compete with this sensory onslaught. Those who are good listeners and make insightful recommendations at the right moment can stand out from the crowd.”
He continues: “Having also worked in Europe, I’ve noticed a propensity for talented individuals to be promoted rapidly here, whereas some EU-based firms are more focused on length of service. It is important to reward both ability and loyalty, but the former has more effect on a business’s performance.”
Goad notes that “for city dwellers there tends to be a longer-hours culture and a lot of socialising after work, but there are certainly many commuters who start work earlier and leave earlier, since their journeys to the central business district on Manhattan Island can last up to two hours. Most people here work in long lines of 6ft-square cubicles. Particularly in the insurance industry, an office equals status, even if it’s only small.”
Given the tendency for US organisations to focus on quarterly earnings, the expectation on people to deliver quick results is perhaps greater here than it is anywhere else, he adds. “I quickly realised that you need to be seen to be making progress – achieving incremental gains and delivering some tactical results on longer-term projects – rather than just issuing status reports.”
Goad observes that “as a Brit in the US (with an American wife), you soon learn that our two nations are still divided by a common language. US English is the way to go here, of course. Using spellings such as ‘organized’, ‘labor’ and ‘center’ is essential when you’re writing reports. You need to learn the true meaning of expressions such as ‘lucked out’ – and you have to think twice when someone refers to your ‘pants’.
“In my sector, and in most financial service industries in general, there remains a huge pressure from regulation,” Goad says. “The regulatory burden on many organisations is massive, influencing much of their strategic planning, investment and behaviour. You see this being played out in the political world, with large lobbying efforts by industries to guide the regulatory environment into a sensible, yet business-friendly, place. This also manifests itself in very stringent requirements covering ethical behaviour. In most firms there are strong rules about declaring entertainment and gifts received and given in the course of one’s work.”
In banking there is clearly a great preoccupation with regulatory issues and what they mean for the viability of certain businesses, says Morris, who adds that the ability to predict changes in the constraints governing areas such as liquidity and risk is the key to forming “a long-term strategic vision. Management accountants have an ever-expanding role in this environment, as we help business leaders to understand the impacts of changes in these constraints and develop powerful analytics. The importance of the information we produce and its communication has never been greater.”
The US by numbers
GDP in 2013 (purchasing-power parity): $16.72trn
The US is the world’s #1 economy by size
GDP growth in 2013: 1.6%
CPI inflation in 2013: 1.5%
Unemployment in 2013: 7.3%
Population: 319 million
Source: CIA World Factbook