Sage Survey: Economic Outlook vs. Coronavirus

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Sales and profits are likely to decline, but a majority of top San Diego business leaders still plan to avoid layoffs and even increase hiring as the country struggles to contain the Coronavirus, according to a poll by San Diego-based Sage Executive Group.

As a measure of the regional outlook, three-fourths of the 45 Sage respondents, including CEOs and executives of a broad range of companies from real estate, finance and technology services to hard-hit restaurants and breweries, said they expect sales to decrease in the next six months.  About 6 out of 10 expressed little confidence in achieving profit growth.

Despite the concerns, more than half of the business leaders expect to avoid layoffs or even add workers, reflecting the diversity of the San Diego economy.  In the survey, 20 percent expected to add workers; 31 percent foresee no change; and 49 percent anticipate a decrease in their workforce.

The overall sentiment of Sage’s members in San Diego and Orange counties is “most expect results to be less than originally forecast, but most are confident of surviving this crisis,” said Sage Executive Group CEO Jerry Rollins. “They don’t know when the recovery will occur, but they want to be positioned to take advantage when it does.” He added that “amid all of the negative news, some companies are thriving and actually increasing their head counts.”

The state-mandated measures to battle the Coronavirus have affected every company, and for two out of three firms, more than 75 percent of their employees are currently working from home.

The foremost concern for more than 70 percent of the executives is how Coronavirus will affect their economic growth this year. Other challenges followed far behind as a “great concern” –  regulation, 30 percent;  political uncertainty, 27 percent; cyberattacks, 24 percent; and trade, 18 percent. Climate change followed far behind at 6 percent.

The results show just how dramatically the economic outlook has changed since the onset of the Covid-19 pandemic, which has affected more than 90 percent of the Sage businesses. Last June, two-thirds of Sage Executive Group members were highly confident of achieving profit growth and executives across the board had no plans for layoffs. A top concern was finding skilled workers for new jobs. Just two months ago, economic policymakers and business leaders made cautiously upbeat predictions for global economic growth at the World Economic Forum in Switzerland.

Sage member Damian McKinney, founder of San Diego commercial real estate firm McKinney Advisory Group and how head of the San Diego office of Toronto-based Avison Young, said that “certain industry sectors are impacted more than others in a negative way, but very few in a positive way.” He added, “If you’re a restaurateur or owner of a hotel, the glass is half empty. But if you’re an essential service provider, then your glass is half full.”

The financial landscape has changed so dramatically, he said, that business leaders and investors have “a whole new career ahead of them now,” and it will take about 90 days to sort out how the available capital will be allocated.

In the survey, three-fourths of the executives ranked the Coronavirus as their major management challenge, ahead of dealing with a skilled labor shortage and global and local competitive threats. Almost half said their most important goal for the year will be to sustain operations. And 53 percent of the company leaders said they planned to provide sick pay for an extended period to workers who come down with the virus.

The financial climate is changing rapidly, and the poll was taken just as Congress was putting together a $2 trillion economic relief package. Even before that action was taken, almost a quarter of the Sage executives said they had applied  for financial assistance. And more than two-thirds said they planned to pay workers for an extended period if they come down with the virus.

Sage Executive Group provides top executives in the San Diego and Orange County areas an opportunity to meet monthly in peer advisory groups to address and solve the most critical issues impacting their business and personal lives.

For more information, contact Sage Executive Group at (800) 648-1063 or visit www.sageexecutivegroup.com.

Fifth Year for Sage Talks

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Simon Bailey: Author, speaker, coach

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John Heffner: CEO of Drybar
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Drew Canole: Author, coach, founder of Organifi
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Gary London: Senior Principal, London Moeder Advisors
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Tony Anscombe: Cybersecurity expert

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Wagner Steve
Steve Wagner, President of Stone Brewing

Feghali Honored as Top Business Leader Under 40

Andrew Feghali, CEO of AMF Foods and a Sage Executive Group coach, has been honored as one of San Diego’s NEXT Top Business Leaders Under 40 by the San Diego Business Journal.

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Andrew Feghali, AMF Foods CEO

In its second year, the journal established the awards program to recognize the contributions of San Diego’s young business and community leaders. Judges selected 40 winners from 400 initial nominations and 127 finalists. They were selected based on their accomplishments, community involvement, and career achievements.

Feghali is the founder of AMF Foods, a restaurant holding company that operates 14 Little Caesars restaurants. It has experienced annual sales growth from $1.5 million in 2009 to projected $13 million this year. Little Caesars corporate recently awarded Feghali the 2019 Operational Excellence Award for a 10-plus restaurant domestic operator. In addition to his Little Caesars accomplishments, Feghali co-facilitates three Sage Executive Group forums and continues to work on his Ph.D. in Leadership Studies from the University of San Diego.

“It’s truly a great honor to be recognized by the San Diego Business Journal,” said Feghali. “The award is a testament to Little Caesars corporate support, my family, my advisors and mentors, and my employees—for, without them, my success would not be possible. Thank you!”

Sage Executive Group CEO Jerry Rollins, who nominated Feghali, said: “With experience and achievements beyond his years, at 33, Andrew is an outstanding young business leader…. His is an inspiring success story, one that ambitious 20 to 30-year old individuals need to hear, so they too can see it’s possible to set their sights on creating a brilliant future as a successful entrepreneur.”

In a letter of support, Thomas Deverell, CEO of Esteemed Consulting Inc. said, “Finding business leaders that live to the letter of the character, integrity, and commitment they profess is hard to find. Andrew lives his business and personal life to these standards each and every day. I am impressed by this young man! He is certainly deserving of this recognition.”

Feghali’s 15-plus years of food industry experience dates to his years as one of the youngest District Managers for PepsiCo – Frito Lay, Inc. Southern California. At 21 he oversaw 20 route sales reps as direct reports and 150 accounts with more than $9 million in annual sales. He led the district to three record-breaking quarters in 2008 during the height of the Great Recession.

Feghali received his bachelor’s degree in Business Administration and Management from California State University, Fullerton in 2007

HM Electronics Wins Manufacturing Award

Carlsbad-based HM Electronics, a global leader in specialized communications, has received the 2019 AME Excellence Award presented by the Association for Manufacturing Excellence.

The award recognizes continuous improvement, best practices, creativity and innovation.

Founded in 1971, HME is a diverse group of companies that design, manufacture, sell and service communications, audio and software solutions for niche markets in over 140 countries worldwide

Company CEO Chuck Miyahira is a member of Sage Executive Group, a San Diego-based peer advisory organization for top business leaders.

The AME award highlighted HME’s employee engagement in creating a lean culture, facility design, employee training resources and topics, systems for scheduling and managing workflow, and strong cross-functional collaboration. “At HME, we saw well-integrated, high-functioning teams that produced among the best cross-functional processes, culture, and results we have seen anywhere,” said the AME assessment team.

McKinney Advisory Group Acquired


McKinney Capital & Advisory, founded by long-time Sage Executive Group member Damian McKinney, has been acquired by commercial real estate services firm Avison Young of Toronto.

The purchase represents Avison Young’s first acquisition in San Diego and expands the company’s full-service platform across Southern California.

Founded in 2010, McKinney Capital & Advisory is one of San Diego’s best-known real estate brokerage and property management firms. Since its inception, the company has represented a variety of local, national and international organizations, ranging from entrepreneurs to Fortune 500 firms.

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McKinney Capital & Advisory, founded by long-time Sage Executive Group member Damian McKinney, has been acquired by commercial real estate services firm Avison Young of Toronto.

The company is rebranded as Avison Young, and McKinney becomes a Principal of Avison Young and Managing Director of the company’s San Diego office, according to an Oct. 7 news release from Avison Young .

“The opportunity to join a privately held, principal-led company that offers local decision-making autonomy – versus a publicly traded firm with many decision-making layers – was a key motivation in our decision to join Avison Young,” says McKinney. “Avison Young’s resources and international capabilities will allow us to grow our business and serve our clients more effectively and with a greater reach in the industry. Essentially, we keep the same collaborative  family and servant-leadership culture and local independence, but have access to a plethora of resources spanning not just Southern California, but the rest of the U.S. and the globe.”

Mark E. Rose, Chair and CEO of Avison Young, said: “We’re thrilled that Damian and his highly regarded team have chosen to join the Avison Young family in our rapidly growing San Diego market. Damian is well-respected in the Southern California and national real estate communities, and this team brings to Avison Young and to our clients a robust and best-in-class platform. Our depth in the market has just significantly increased.”

Avison Young entered the San Diego market in 2013 through the opening of a newly formed office. The McKinney team members will relocate to Avison Young’s existing San Diego office at 4655 Executive Drive. Avison Young has six offices throughout Southern California.

Terms of the acquisition were not disclosed.

Sage CEOs Predict Profit/Job Growth for 2019

Confidence in reaching profit growth this year is so high for top San Diego-area executives that no layoffs are planned, most plan to hire and their biggest concern is recruiting and retaining talent. At the same time, they express little concern about the controversial immigration and tariff policies of the Trump presidency.

These are key findings of a comprehensive survey of 67 Chief Executive Officers whose companies in San Diego and Orange counties employ more than 8,000 workers and generate more than $5 billion in annual revenue. The survey, which is a key barometer of the health of the Southern California economy, was commissioned by Sage Executive Group, a peer advisory organization for business leaders. The CEOs, who are Sage members, run a wide swath of businesses in technology, real estate, insurance, law, wealth management and hospitality.

“I am pleased to note that Sage member CEOs are focused on profitability as compared to revenue growth, said Sage Executive Group CEO Jerry Rollins. “Too many companies these days think top-line growth is the most important factor, but Thomas J Watson, the founder of IBM, stated, “business is built on net income” and those principles are true nearly 100 years later.

The survey found that two-thirds of the CEOs polled are highly confident of achieving profit growth this year, and the remainder are moderately confident. For eight out of 10, “creating a success-driven company culture” is a top priority, but only half express confidence in being able to achieve this goal.

Ninety percent of the CEOs indicated that increasing profitable sales is still their most important challenge and fewer than half were confident they could achieve profit expectations. They said their major obstacles are recruiting, cultivating, and retaining leadership talent and raising the capital needed for expansion.

Only 12 percent of those polled said the last year’s federal tax overhaul was “extremely” beneficial to their business and a large majority, 70 percent, rated it as “moderately” beneficial.

Two of the least important issues were immigration and new tariffs. Almost three-quarters of the CEOs consider “navigating new immigration regulations” as their least important concern, and almost that many rate “navigating increases in tariffs” as a less-important concern.

Sage Executive Group provides top executives in the San Diego and Orange County areas an opportunity to meet monthly in peer advisory groups to address and solve the most critical issues impacting their business and personal lives.

For more information, contact Sage Executive Group at (800) 648-1063 or visit www.sageexecutivegroup.com.