Man behind Davos
Accepting cultural differences is key to the modern business world, Klaus Schwab says.
David Ignatius, Washington Post columnist, hosted an online discussion with Klaus Schwab, founder and executive chairman of the World Economic Forum, which met last week in Davos, Switzerland. Q. As you talk to businesspeople around the world, do you have the sense that the global economic crisis is ending? That we’re getting better confidence and muscle tone, if you will, back in the world economy?
A. I think we have to recognize that the post-crisis world will be very different, and should be quite different, from the pre-crisis world. We have to deal with a completely new reality. We have the emergence of new powers. We have the millennial generation coming up, which will change certain social patterns.
If we really look at how to come out of this crisis, we have to take into account those new power mantles which will determine our world in the next years. Q. So you think it would be a mistake for business managers or leaders to try simply to rebuild the old world that existed? Maybe you could say what the newer goals and ideas might be.
A. We first, of course, have to sort out the consequences of the crisis, and here we have to make a difference between political leaders and business leaders.
If we look at the future for politicians, I think we have to change the pattern from a reactive to a much more proactive behavior, policy setting.
For business leaders, I think the key is what we are seeing now, it’s de-leveraging to come back to more reasonable, more sound frameworks of how we do business. And particularly to concentrate on real business and less on virtual business. Q. When you began World Economic Forum, one purpose was to expose managers in Europe to American management techniques that were advancing quickly. Describe what America was bringing to the world of business 40 years ago.
A. It was certainly efficiencies and entrepreneurship or risk-taking. And the United States still is a role model for those traits of a leader. Q. And what do American business leaders have to learn from the rest of the world today?
A. In the past, the most decisive success factor was how productive you were and which efficient way you used resources and so on. Today, the most important success factor is to recognize risks and to mitigate those risks. Let’s look at BP. It went from very solid to suddenly stumbling over a risk.
The other issue is that we have to learn from one another. We are now much more in a multicultural world. Chinese competitors will rise. Indian competitors will rise. A leader of today has to be someone who is not only very understanding about cultures and very at ease in dealing with different cultures, but is someone who accepts cultural differences as a natural way of doing business.