Keeping CEOs up at night
Bechek meets regularly with CEOs and chairpersons of companies around the world as part of his job. From large multinationals headquartered i n developed markets to high-growth companies in developing countries, business leaders face similar challenges. Here are three issues that are on people’s minds:
“I think number one is the ability to adapt quickly. Virtually everyone is facing new types of competitors that they haven’t seen in the past, either because in a more globalised economy there are competitors from new regions, for example China and India, that they weren’t facing before, or because of technology, which has a way of breaking down barriers between product areas. So companies that existed before but weren’t competitors are suddenly serving as substitutes. That creates a need to be able to change quickly.
At the same time, the world’s been going t hrough s everal decades of increased globalisation. Organisations are truly global even if they’re headquartered in Western Europe or North America. It is a mammoth challenge for these large organisations to try to create alignment around a shared set of values, objectives and strategy, and then to adapt quickly. There are also mammoth talent needs across organisations globally, as education is not up to the task in many of the countries that these companies serve around the world.
Secondly, deal i ng with a n increasingly digital world is both an opportunity and a threat in many different ways for these companies.
The third one I’d say is the search for additional sources of profitable growth. Risks also seem to be growing in many industries in parts of the world. Often i nvestment timeframes are getting shorter, and so there is enormous pressure on companies to find additional sources of growth and to deploy capital when it’s often challenging to do so.
We see excess capacity now in many different industries as China, i n particular, has gone through this mammoth investment boom. Demand is constrained in many countries as demographic growth moves people out of their key spending years and as we continue to deal with the aftermath of the global financial crisis, which still demands more deleveraging for households and even more so for governments. And so, many industries have a lot of supply relative to demand.
I n Africa, we have enormous i nf r astr ucture needs a nd a n exploding middle class in countries like Nigeria that wants access to services like banking and insurance and telecommunications. The shift is increasingly to take basic industries and move up the value chain; doing more processing locally rather than exporting commodities. We believe the opportunities in Africa to be enormous.