Posted:
01/27/2013 11:42 am
Rich
Lesser
President and Chief Executive Officer of The Boston Consulting Group (BCG)
huffingtonpost
As I head
to Africa after the World Economic Forum in
Davos, like most participants I am trying to distill the core insights from the
past week. Clearly, the tone of the meeting was more optimistic than last year,
with spirits buoyed by the recent upward momentum of China
and the U.S.
and signs that the euro zone has stepped back from the brink of collapse. But
gauging the mood is one thing. Making sense of the cacophony of issues,
challenges, and opportunities is another.
In trying
to interpret this, I am reminded of a great book I read over the holidays --
The Signal and the Noise by statistician and blogger extraordinaire Nate
Silver. Nate shows just how challenging it is to separate true signals from all
the noise when trying to predict the future. He is particularly hard on
economists and the prognosticators who gain more from being blunt than right.
In that
context, I won't even try to say what 2013 will bring. But I do believe there
are strong underlying signals of fundamental changes that will shape the future
over the next decade and beyond. These changes will force business leaders to
reassess how and where they steer their organizations, while posing some
enormous challenges for public-sector leaders.
First, the
reshaping of the global economy. The emerging markets are the engines of global
growth and over time, they will control a share of the global economy we have
not seen since the industrial revolution. Companies in emerging markets are
becoming strong global challengers and increasingly, global leaders. And, most
important of all, hundreds of millions of people are being lifted from poverty
into the middle class, creating a brighter future for the next generation. On
the flip side, this growth will add to the sustainability challenge, both
locally and globally.
Second, the
ongoing revolution in computing power and connectivity. In a hyper-connected
world, everything changes -- how we form friendships, conduct our lives,
educate our children, and manage our health. We are also in the middle of
fundamental shifts in how we interact with businesses and how they interact
with one another. Many industry structures will evolve, with some parts of the
value chain fragmenting and other parts consolidating. Cyber-security, data
protection, and privacy will create ever-increasing risks and challenges. And
as any parent can attest, our children will understand this connected world
intuitively and better than most current leaders.
Third, the
twin challenges of debt and demographics in most developed economies. Stepping
back from the brink is not the same as solving the problem. Kicking the can down
the road is not a long-term solution, but it may be the only achievable option
for a while. We are not at the end of very hard choices, nor the associated
volatility as political leaders struggle to make them. In the meantime, the
aging population in most of those countries does not receive the attention it
deserves. But it is just as fundamental and will compound the debt overhang by
increasing the burden on future workers, putting more pressure on health and
retirement spending, and exacerbating talent shortages.
Finally,
the need for new leadership models. Leaders today operate in a world of
economic and political uncertainty, diverging economies, and
hyper-connectivity. They must build organizations agile enough to adapt and fit
to compete with the best in the world. They need leadership teams that bring
the talent, diversity, and collaboration to spot opportunities, and then
innovate and capitalize on them at an ever faster pace. They need to "walk
the walk" in acting responsibly and respecting the interests of different
stakeholders. And they must communicate actively and build advocacy within the
organization, as trust in peers often surpasses trust in leaders.
In
turbulent times, the glass can be seen as half full or half empty. In Davos,
you hear passionate advocacy of both. Personally, I am on the optimistic side,
despite the inevitable bumps along the way. But the rewards will not be spread
evenly and will favor the bold, the open-minded, the trusted, and the
collaborative -- those who can change the game. We must embrace the uncertainty
and try to shape the future rather than letting it shape us.
http://www.huffingtonpost.com/rich-lesser/decoding-the-signals-from_b_2561812.html
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