and it’s hap­pen­ing to­mor­row

Finweek English Edition - - Unittrusts -

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’

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