and it’s happening tomorrow
THE BUSINESS LEADERS most likely to succeed are those that expect and plan towards a business environment that will be very different in two years’ time, never mind a decade or half century. This is the opinion of two of the world’s most powerful business leaders, Ellen Kullman and Dominic Barton, who shared their views on future business strategies at the Gordon Institute of Business Science (GIBS).
Barton is the global managing director of international business consulting firm McKinsey & Company, while Kullman is the CEO of multinational firm DuPont, only the 19th in the history of that 207-year-old multinational. Under her leadership, decision-making has moved closer to customers around the world, resulting in greater partnering, collaboration and solutions attuned to local needs.
Selected for their personal leadership values and vision, both leaders attained their career pinnacles only a year ago – at the height of the global financial crisis.
Reinforcing the view that predicting a future in a world that has become increasingly volatile is unpredictable, Barton confessed that despite having experienced the Asian financial crisis a decade ago and even written a book on it, he had not seen the current global financial crisis coming.
The lessons to be learned from the crisis are around discipline. “Businesses are going to have to pay more attention to risk management and not the obvious risks, but those two deviation points outside the norm.”
However, both Barton and Kullman felt the greatest risk in business today was to fail to evolve and innovate.
Kullman revealed that 2009 was the best year ever for DuPont in product innovation and said that the key to surviving financial crises is to view them as opportunities rather than the disasters that most people see.
“At DuPont, we responded by raising our level of innovation. Yes, many of these had been works in progress over many years, but our response could have been to cut costs and cancel or postpone them. Instead we accelerated them. Because the market was relatively slow, we and our various business partners had the time to reflect and track critical changes that were occurring in the world.”
Barton contends that, “ These are exciting times: We’re seeing the rise of Asia as the centre of world economic power, as well as the age of digitisation. How companies respond to this shift will determine tomorrow’s successful businesses.”
By the year 2050 there will be 50% more people living on planet Earth and these ‘new’ people will live in Asia and Africa. It is this trend that explains DuPont’s shift closer to the ground as well as its focus on innovation. Based on current experience in China, Barton said these billions of new consumers will not tamely accept any product thrust at them.
“Emerging markets are no longer just about cheap labour – because they are aware of how huge the numbers are, they are fully aware of the need to innovate at low cost. These consumers are incredibly demanding.”
Nor is ‘ innovation at low cost’ a contradiction – Kullman claimed the very purpose of innovation is to bring down costs and do things more efficiently. “ Technology is rapidly changing products and processes. For instance, because of environmental sustainability and cost issues, cars will look completely different within a decade from today’s cars.”
Another reason why today’s business must get closer to their markets, is that those markets do not abide by the same orthodoxies as developed nations.
Solutions to endemic problems around education and healthcare are being devised in India that would not be dreamed of in Europe or the US – or SA. The result is that while healthcare is becoming ever more unaffordable for the average person in developed countries and SA as they seek ‘quality’