By definition, a leader is a person who conceptualizes leads and controls the development of an organization. Today, when we speak of development, only one can be taken into consideration: sustainable development.
Stars symposium held in a picturesque Swiss village Stein am Rhein in the middle of September welcomes the leaders, both contemporary and future, and pointed out to the very essence of the challenge and the choices being offered to a leader of the next generation. Being a leader does not imply that one has to be an expert in a certain field, but a leader in conceptualization of creative responses to the challenges and obstacles in business, a visionary, good communicator and a team leader, an optimist, well informed individual aware of the challenges faced with today and in the future.
To be able to hear the challenges of leadership from the American, Asian, African and European perspective at the same place, from the leaders of organizations from all over the world, provides a handful of possibilities, knowledge and information. Even though the motto of stars symposium was „Expect the unexpected“, this motto was later supplemented by an advice „Think unthinkable“. Dr. Toni Schonenberger, Executive Chairman of stars foundation, reminded us that the world has become a more complex place. With heightened flows of finance, trade, and investment, our economies are more interconnected now than ever before. As the European Union struggles to maintain its momentum, the rise of China and the resurgence of Russian nationalism have challenged the status quo of geopolitics and international trade. The Internet has fundamentally changed the way we do commerce, spawned a host of digital technologies, and, with the advent of the industrial Internet, will see our devices, homes, and cars connected to sophisticated analytics. As emerging markets surge forward, much of humanity remains vulnerable to social and economic instability wrought by recession, lack of water and food, energy shortages, climate changes, regional conflicts and population movements. Just think of the catastrophes in the Middle East and Africa. How are we to understand our personal and professional risks and opportunities in such a world? Can we make any attempt to foresee the future? Or should we just cross our fingers and make a run for it?
Before most, a leader of the next generation has to learn how to establish a balance between three pillars of sustainable development, namely: the Planet - making decisions that protect our environment, Profit - Maximising the long-term value of our business, and People - improving the lives of people we influence.
For all mentioned reasons, the theme of this year’s symposium was „Horizon Scanning“. Horizon Scanning is the art of systematically exploring the external environment to better understand the nature and pace of change in that environment and identify potential opportunities, challenges, and likely future developments relevant to our society, companies and institutions. For sure, topics such as: China and Africa, Competing Value Systems and Supply Chain Empires, Data Crush, Regulation and Compliance, Poverty and Inequality, are so valuable for the future leaders. The next generation of the leaders will enter a sea of complexity and uncertainty. All of these challenges will force our companies, governments, academics, and NGOs to reconsider the way they think and operate. The key question is how leaders of the next generation will deal with the unexpected?
To better understand our Planet today, the leaders of the next generation must pay attention to the megatrends and new geopolitical positions in the world. According to the Dr. Markus R. Neuhaus, chairman of the PricewaterhouseCoopers Switzerland, the last analyses show five megatrends which are important for leadership: Shift in global economic power, Demographic shifts, Accelerating urbanisation, Technological breakthroughs and Climate change and resource scarcity. Today, after Go East we have a trend to Go South. Africa is the most growing market today. Just as Frank Braeken, the CIO of Amatheon Agri Holding, a Berlin based company committed to building a leading Agro Foods company operating across Africa, said Africa needs big companies.
Another aspect of better understanding of Planet’s development was offered by Prof. Dr. Parag Khanna, leading global strategist and director of Hybrid Reality Institute from Singapore. The Planet from one hundred years ago and the Planet of today are two interesting points for smarter understanding of our future.
From the Unipolar 1990s…
...to Today’s Geopolitical Marketplace
In the text of Urs Schoettli, consultant on Asian affairs, titled “A World in Turmoil” we have a chance to understand the world better. Two things have changed fundamentally since the times of the US-Soviet duopoly, he said: Firstly, a major new pillar of world politics has been added with the return of China to its age-old position as a major world power; secondly, the world has moved away from a Eurocentric position. For the first time since the beginning of the 19th century, the global focus is not on European thought and civilization anymore. During the past two centuries, the world did not manage to adapt to the emergence of new big powers without descending into war and chaos. This was the case with Napoleon’s empire, with the German Reich of Bismarck, with the “third Reich” of Hitler and with Japanese imperialism. Today the world is challenged by the return of China to the position of a world power. Beijing will soon be the only power that can challenge Washington.
The historic geopolitical changes taking place in several parts of the world make it necessary to think about a new architecture for the international order. The age of old style free trade is coming to an end and we see elements of mercantilism creeping into the international trading system. Bilateral free trade agreements replace traditional multilateral trade rounds. The Chinese have started to buy up land and resources in Africa and Latin America, other major countries will follow. In the greater European context, the future of Russia is without any doubt a major challenge. The world has easily forgotten that the break-up of the Soviet Empire happened with remarkably little upheaval, particularly in Central and East Europe. Normally such gigantic convulsions lead to war. This has not happened. For the Russian population, the sudden disappearance of the Soviet Union has been a monumental event. No doubt, many people, particularly those belonging to the established military and party elites, felt humiliated. They also remembered that the now vanished Soviet Union had made decisive contributions to defeat Hitler’s Germany. It is understandable that all the convulsions opened many wounds, even more so because traditionally, Russia has seen itself as much more than a usual European nation state. For Brussels and Washington, it is very important to understand these Russian sensitivities. Nobody can have an interest in isolating Russia, in pushing this great nation into a corner and humiliate its soul. Europe is incomplete without Russia, not only economically and politically, but also culturally. Whatever the final outcome of the Ukrainian crises will be, the West will have to work towards a Europe that is the home of all of its people, from the Atlantic up to the Urals. The Ukrainian crisis is a powerful reminder that even in Europe, which was deemed to have learnt the lessons of war, new conflicts are not impossible. It is certain that the crises in Ukraine have made the Europeans, particularly those living in the Central and East European countries, more aware of the benefits both of the EU and NATO. The world continues to face the plague of failed states. The most dangerous challenges to peace and stability emerge from these states, whether it is Syria and Iraq or Pakistan and Afghanistan.
A world in turmoil obviously cannot be managed by a single super power. Although we believe that particularly in terms of naval power and strategic reach the US will remain for some time to come the sole power that can employ its military might anywhere around the globe. But in a multipolar world, it is even more important that regional powers take the responsibility in helping regional stability.
The profit is a significant result of business operations, but as Ferdinando Beccalli-Falco is President and CEO of GE Europe and North Asia, advised the companies, it is not the case if you betray yourselves and your believes. The most important dimension of profitability is not to betray oneself while on the road to make profit. On this road, the manner of accepting and recognising the essence of the social and economic development is of utter importance.
Jim Hagemann Snabe, Chairman of the Forum’s Centre for Global Industries in 2014 of the World Economic Forum Foundation Board, offered the most impressive dimension of the logic response to the 21st century challenges.
The main requirement for the leaders of the next generation is to learn how to optimize their brains not to be afraid of the influence of robotics and IT technologies in the future business process. Human race needs to continue to be active more than ever. We need active citizens and active leaders who will be ready to understand and apply the logic of digital age in the daily work. That is the only way the profit of their activities will be a sustainable one. Mr. Snabe recommended to the future leaders, as a must-read in Literature - to read the book The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, because great companies can fail - not because they do something wrong, but because they do everything right. Meeting customers' current needs leads companies to reject breakthrough innovations – “disruptive technologies” that create the products and opportunities of the future. This award-winning book shows managers the changes that may be coming - and how to respond for success.
Mona Sutphen, partner at Macro Advisory Partners, previously Managing Director at UBS AG and White House Deputy Chief of Staff for President Obama from 2009 to 2011, explained her most challenging domains of leadership: data unavailability, especially cyber-attacks, energy innovations and their impact on the environment, and trends of segmentations of capital, politics and markets.
To better understand financial dimension of successful future leadership, we need to understand why the financial and then economic crises in the world even happened. Dr. Axel A. Weber, chairman of the Board of UBS AG from Switzerland, claims that we need global financial market and global financial system. Coordination and compromises are very important for global consolidation of banks and we need to work on that challenge all together.
Interesting discussions have yielded a number of examples of good practices, but also a handful of anecdotes. Prof. Lim has explained how the profit, and everything that goes with it, is an interesting point for analysis in various cultures. One American manager who achieved excellent managerial results, moved to China to manage one of his company’s branches. When he came to China, he introduced a strict financial discipline and explicitly banned taking bribe. The corruption was the biggest challenge he had to face and he knew that. After six months, he obtained proof that the sales director, a Chinese man, has been taking bribe repeatedly. He invited the director in question to a meeting where he received the following answer: I do not understand what is disputable or bad in it. First of all, I did not take money from the company, but from the supplier; second of all, I have distributed the money equally to all the colleagues in the supply department – my only desire was to motivate them more.
Leadership makes good things happen, said Lim Siong Guan, GIC Group President from Singapore. In his book „The Leader, The Teacher and You“, Mr. Lim offers a number of useful advices to which a leader should certainly pay attention, and leads us to a fantastic conclusion that if large companies need small companies for their development and positioning, large countries also need small countries. On this Planet, we are all connected and one global leader always has to bear that in mind.
As Mr. Beccalli-Falco advised, a wise leader will ensure the balance of team work in a team consisting of experienced managers and young forces as soon as possible. He has to create his praetorians – just as was the case in the times of the Roman Empire when it was common for a military leader to have his personal guards – a modern leader has to have a team which knows him well, which creates a healthy shield around the leader. You have to learn how to delegate, how to be honest to yourselves, and you should always, at any moment during the negotiations or making deals, even more during decision-making, bear in mind your values and beliefs. The balance of interests is of utter importance. Large companies may afford themselves some big failures. Use their experience and observe what would be your greatest power compared to the large companies. That will indicate the usefulness of your small team in all of its uniqueness and the specificity of your offer.
Frank Braeken, regarding Go South trends, added an interesting note about the leaders of the next generation in Africa. He said we need new people now, the people who will possess Mendel’s 35 years look: his optimism in the eyes and his positive energy in the heart. We need new political innovations and more than ever, we need higher expectations. Low expectations have brought Africa to the low level of development we have today. Now we need young people who expect more of themselves and of the society and the State. It is interesting that this story was continued by Prof. Pang, a full Professor of international relations and founding Director of the Centre for the study of global governance, Renmin University of China, Beijing, who said that China needs new solutions and innovation in terms of political system and that the domestic challenges pertaining to the development of China should be in the centre of attention. That is how things shall remain in the future, because China needs a New Silk Road.
All of the attendees have participated in two researches conducted with the aim to point out, first of all, to the most important characteristic of a leader which leads to success, and second of all, to the characteristic which leads to defining of the biggest challenge in the next five to ten years for society. The winner in the domain of the first question was the Social Skills (56%) in comparison with Intellectual Skills (33%) and Management Skills (11%). On the other hand, the challenge number one of Society’s Development is Demographic Change, winning over Economic Inequality, Resource Scarcity and Climate Change, Individualism, Conflicts and Unemployment.
We conclude with Mr. Snabe’s formula of success for an individual, his family and society in general: the first 25 years of our lives we spend taking, the next 25 years we spend learning, and the next 25 years we spend giving. Therefore, be careful from whom you learn the knowledge and skills, and also to whom you transfer it. The future of all of us depends on our decisions. Wise decisions, I believe, because the Planet is warning us and exhorting us more and more each day.